Prairie Trail Logo

Views from the Prairie

July 12

A Recipe for Success?

Browsing through the stacks of business books, it is easy to see that many people think that they have found a recipe for success. Over the last few decades, we have seen business book after business book tout "Excellence", "Six Sigma", "Walking Around", and many other business ideas. But few of these books have made a significant difference in American business.

Part of the reason is that the books are based on pulling together case studies of a number of businesses, trying to see some characteristic in common, and then push that one thing. This effort has a fatal flaw: the studies do not check if the featured companies are successful because of superior capability or strategy or if they successful because they were lucky. Did the company do well because they were doing something extraordinary or if they "won the corporate equivalent of the lottery"?

In any environment, there is a wide range of results from the same level of effort. There will be people who are very lucky and those who have abysmal luck. Most people will have average luck and not see all that much results from the effort.

The problem for the rest of us is that if the business advice is based on luck, then following that advice will not make your company any better (and might make it worse if you follow advice that falls on "the wrong side of the dice" for you.)

Deloitte did a systematic study of firms to try to find out if they could isolate out the difference between outstanding performance and luck. In their database of over 21,000 firms covering the period of 1966-2006, fewer than 400 companies appeared to have behavior that was substantially different than what could be explained by luck.

In Good to Great, the author analyzed 6500 years of commercial operations. The author agrees that most successful companies were not luckier than other companies. The key is that they used their luck in a different way than their competitors. However, the list of companies that he claimed were great has shown itself to be limited. Many of the companies on that list have not survived the years since then very well.

Most of the business books out there should not be taken as recipes for success but for inspiration for continued experimentation and exploration of what might work for you. (It can be disheartening to find out that the data for the book was faked as one major book is supposed to have been.)

It is also important to know about the bad side of life. The book, "In Search of Stupidity" is a fun analysis of how badly companies can blow it.

Inspiration for the dark days in your venture is very important. When we are not seeing the luck, it is very easy to want to give up. Business books showing ways to succeed are very important at those moments.

Conflict and Confusion are Valuable

One of the interesting themes of modern education is the strong emphasis on conformity and conflict avoidance. Children who are "disruptive" are put on medication to "calm them down". Employees who challenge the system are let go. We do not want conflicting opinions in our structures. It turns out that such conformity is harmful to real learning.

This is not to disparage peaceful cooperation between parts of an organization. The issue is that confusion and conflict are normal in a dynamic environment. People learn at different rates and that causes differences to be more pronounced. Organizations undergoing rapid change without conflict either are headed for disaster (the rapid change is not taking hold), or are being run in a way that pushes the good people out. (The number of college dropouts becoming successes is an interesting trend.)

Hearing conflicting opinions is good as it helps people figure out deep issues. When people hear differing viewpoints, they think more deeply about the issue and remember it better. Thus, some researchers have concluded that most organizations actually need more conflict, not less.

Conflict is good - to a point. It is not the conflict itself that is a problem; it is how conflict is resolved. Conflict can drive us apart or pull us together. Let us work on conflict resolutions that pull us all together.

Risky World

A study from the University of California in Santa Barbara (US) concluded that among 825 examined apps for the iPhone and its operating system iOS, 21 percent forward the ID number, four percent the current position, and 0.5 percent even copy the address book.


This newsletter is posted here as well as sent via mail and email. If you wish to receive updates, please sign up above.

Prior Years

  1. 2008
  2. 2009
  3. 2010
  4. 2011