You shouldn’t read everything you believe
Some time ago my boss read Good to Great by Jim Collins. It’s one of those books written for and read by managers and it’s about how good companies become great companies. My boss already thought he had a good company, now he wanted to become great. Even though he was only bullying slightly less than twenty people around at the time, he thought it wouldn’t hurt to see how he could get elevated to the levels of Gillette, Walgreen, Philip Morris or Wells Fargo. No lack of ambition there.
Collins studied eleven out of 1435 companies from the Fortune 500-list. Those 11 companies were ‘great’ because -this is the short version- their stock market values soared like an eagle compared to the remaining 1424 ‘good’ companies. No doubt what these eleven companies did to become great, made a difference. Collins found seven characteristics that were common to all eleven. Personal humility in leadership, a disciplined workforce, a simple concept are some of those characteristics. The conclusion seems clear: adhere to those seven characteristics, and you’ll become great!
It’s flawed reasoning with a vengeance. The presence of common characteristics in a group of successful companies says exactly nothing. What if these characteristics were also present in the failing companies? Then they don’t make any difference and the eleven greatest became so simply by dumb luck. Instead, ‘dumb luck’ should have been the null-hypothesis and every characteristic found in successful companies should have been subject to rigorous statistical analysis. That Collins should have done this is now clear from the fact that some of his ‘great’ companies have now foundered. And then: woolly concepts like ‘personal humility in leadership’ and ‘a simple concept’ are hardly quantifiable…
Was I the only one who sat there stupefied at my boss’ enthusiastic presentation about what he had read? No. Others have noticed too and it’s easy to find. At amazon.com reviews are abundant. Honesty requires me to say most of those are very positive (428 five-star reviews in a total of 634), but the warnings are there. Donald Mitchell -one of Amazons top reviewers- wrote:
the study inexplicably fails to look at these same characteristics to see how often they succeed in the general population of companies. If these characteristics work 100 percent of the time, you really have something. If they work 5 percent of the time, then not too much is proven.
Bill Gossett wrote:
Collins uses a brute force data-sifting method with a team of 21 full time assistants. But since he doesn’t actually conduct any statistical analysis to determine if his observations are real instead of chance or perception, he has generated something that seems filled with classic analysis errors.
Another reviewer goes even further:
Books like Good to Great prey on the fact that you napped through statistics–if you’d been caffeinated up during those dull lectures, you’d have remembered the fallacy of composition (the coin flipper’s exercise), the distinction between random outcomes and relevant ones, and the enormous difference between what’s causal and what’s coincidental.
So I came up with my very own Management Law Number 1:
If you want to know how to be successful you shouldn’t ask successful people, you should ask losers!
But -you might argue- nobody wants to read about losers! That’s right and that’s probably why these books are written, for managers anyway. Because it’s not true that nobody wants to read about losers. Loads of people do and love doing so. Read-stuff about losers is called ‘literature’ and people love it. Moby Dick, the Unbearable Lightness of Being, Anne Franks Diaries, the Iliad, Lord of the Flies, the Little Mermaid, Romeo and Juliet, they’re all about losers. Hell, even the worlds biggest religion is based on a Loser, if you read the gospels as literature that is.
Managers should stop reading books about management. They should start reading literature.