A Well-Crafted Critique of Business "Success" Books and My Ambivalence About Good to Great

Yesterday's Boston Globe published an excellent story by Drake Bennett called "Luck Inc," about the questionable value of books about how to build great companies (the graphic is to the left). Drake provides an excellent summary of the arguments in The Halo Effect that rip apart the methods used in many such books, as well as arguments from Hard Facts, the book Jeff Pfeffer and I wrote on evidence-based management.  The story focuses most heavily on new research by Michael Raynor and his colleagues, which apparently shows that luck (i.e., randomness) provides the best explanation for which companies enjoy exceptional performance and are then celebrated as superstars in books like Good to Great and In Search of Excellence.  This point makes sense to me, and in fact, follow-up studies of Peters and Waterman's excellent companies and Collins' good to great companies are consistent with that view  -- and also consistent with an argument that -- when it comes to picking which stocks will perform best -- a "random walk" is mighty tough to beat -- that most stock pickers don't top a randomly selected stock portfolio.  

I had a pretty detailed conversation with Drake, and although most of it focused on the drawbacks of these kinds of books, he ended-up quoting me as defending these books.  I think he was completely fair, and in any case, I am on record many places raising concerns about the suspect methods used in both In Search of Excellence and Good to Great. But I have an especially ambivalent reaction to Good to Great -- let me explain why.

There are a lot of things that bother me about the book:

1. It is a very small and flawed sample.  Most notably, we have 11 companies that used the practices that Collins celebrates, but the sampling strategy made it impossible to discover how many companies used these practices yet failed to make the leap to greatness.

2. The main method was retrospective -- they would label a company as "great" and then look for articles and do interviews to determine why it happened. This is a quite biased method -- if you ask someone to explain the secrets of their success, you get a certain kind of story that differs from if you ask them to explain why the failed (regardless of actual performance). Winners will report having better leaders, being more focused, and persistent -- and trying to untangle what is part of the sensemaking process versus what really happened is tough.

3. Good to Great cites almost no prior research, even though there are literally thousands of more rigorous studies that are pertinent to claims in the book, especially studies of leadership. Indeed, as knowledge accumulates one study at a time, and there are few if any definitive studies. So any author who claims or implies that he or she has done THE definitive study is immediately suspect -- indeed, it is something that well-trained researchers never do, even Nobel Prize winners.  I think that Collins needs to say -- "this is just one study, we learned a lot from it, but it isn't definitive... and it has flaws."

4. Perhaps the biggest problem of all is that Collins makes bold and excessive claims based on the research; ironically, this book about the virtues of modest leaders reveals considerable hubris in its claims.  Perhaps that is necessary to get a bestseller -- but, as an example, Malcolm Gladwell would never make such claims.

BUT despite all these concerns, what if Collins had actually reviewed and integrated rigorous research and had built a book based on that body of evidence?  If he had done so, he could have found considerable support for his ideas in published peer-reviewed research.  Although there is a good deal of randomness in the process, and Collins probably overstates the wallop packed by leaders, the fact remains that leaders do need help (it is a damn hard job), and the simple and compelling ideas in Collins' book are probably mostly right and have probably helped a lot of leaders and managers. Spreading the message to leaders that they need to face facts and to be persistent and humble strikes me as a good thing, and also consistent with studies from diverse places. 

So, although it is mediocre research, I think the message has done a lot of good. I just wish that Collins had shown more modesty.  The upshot is that I end-up being the one who defends Good to Great at the ending of the article. So I did say, and agree, that ""There's value in mastering the obvious," he says. "If Jim Collins's impact is to get people to do stuff that they know they should do already - facing the hard truths or being selfless or whatever - I certainly don't think that's a bad thing." 

As I think about this now, perhaps the most important standard for business books is that, whatever basis is used to support the authors advice should be stated clearly and not be overblown. I don't expect a book by Jack Welch to be based on anything but his experience, and my favorite business book of all time, Orbiting The Giant Hairball, is based only on Gordon MacKenzie's personal experience and opinions -- but you know where the claims have come from. 

Indeed, as I think of the books I have written, and things I am writing now, the lesson I take away is that my values and biases do affect what I write, but I also draw as heavily as I can on peer reviewed research, as that is so much of a part of my history and identity.  So I am going to start making more clear that what I write is best seen as "evidence-based opinion."  I also think that is the most honest way to describe what Gladwell does so well and Dan and Chip Heath do too... management is a craft, requiring a complex mix of experience and evidence.  Think of what great doctors do, it is much the same thing. If they ignore the evidence too much, they are making a big mistake, but they also need to take into consideration the particular case, what they and the patient want and value, and their clinical experience.  To that end, as Pfeffer and I wrote in Hard Facts, we believe that management will always be a craft, but that evidence needs to play a bigger role in how the craft is practiced -- so "evidence-based opinion"" fits that perspective well.

Comments

[Neeraj]

Hi Dr. Sutton,
I liked your comments about "evidence based management".

I just read through the article mentioned by you "luck Inc."
It really resonated with me.

I am in search for books for lay people like me, which distills the wisdom of "evidence based management" and conveys that to "general readers".

Could you suggest few to me my address is npk107 at gmail dot com .

[Murthy]

Hi Professor Sutton,

Excellent observation and comparison between Collin's somewhat deterministic perspective and Bennett's somewhat monte carlo-ist perspective.

I think its difficult to find any phenomenon in the world that isn't governed a little bit by core principles and a little bit by luck. You can take an extreme point of view by focusing on either in isolation - or - you can take the scientific approach of studying the issues that are governed by core principles and stating as known assumptions and exceptions the issues that cause deviances. Obviously the fact that a phenomenon is affected by luck doesn't preclude the possibility of core principles. Perhaps there is no surefire way to make money in the stock market, but there are definitely surefire ways to lose it - so there must be some combination of intelligence and luck in there.

In terms of writer credibility, I think this just becomes a supply/demand optimization problem. There are many readers out there who will believe anything that is written down, just because its written down. On the flipside, there are individuals who take no information for granted and examine with critical judgment. If you want your book to appeal to be demanded by this entire spectrum, it better appeal to the critical judgers' demand with a supply of critically argued evidence. But if you decide not to take the evidence-based approach, there will still be a market for your book, albeit a smaller one.

So I'm not sure if there is one right or wrong answer here. When I was working for a large well-known and fast growing company (Professor Sutton knows which one), I was called up by a student who wanted to interview me on how the company's IT group was better than every other company's. I asked the student why he thought the IT group would be better? He said, "well you're one of the most profitable companies in the Fortune 500, so everything you do in the company must be better." This is the kind of kid that buys Collins' books.

And so, is it bad for some folks to be making a fast buck off of the irrational lust of those who seek non-evidence-based and unscientific business pornography?

[GeekMBA360]

For me, Good to Great is as much as self-help/personal development book as a business book.

I'm not sure one could follow Good to Great principles to build a successful company. However, after I read Collins' book, I did try to change how I approach my career by following some of his principles. It did have some very positive impacts on how I work.

[dblwyo]

A fair and balanced post and explaining your anti-Collins stance. Where do you stand on Drucker btw ? The symptoms you point to result from deeper flaws on both the writer AND reader's side (as a previous commenter pointed out). Channeling my long-time colleague and friend Charles the Ruthless and my own thoughts:
1. Most bizzbooks (& consultants) are conceptual candy. One simple idea in isolation from the complexities of business. Most importantly they don't go deep enough into the operational details to be executable.
2. The ideas are isolated whereas a business is many moving parts that have to work together. Very few bizz books place their simple ideas in the context of the whole business that real world executives have to deal with.
3. Businesses are run on rules-of-thumb accumulated over lifetimes of experience. When patterns change so should the rules but because executives tend to be non-analytic they don't adapt.
If you believe those arguments or want to test them for yourselves, something that calls for thinking things thru in context there are also lessons that apply directly to business school curriculums and teaching methods. Think about it in relation to your post series on that topic as well.
Meanwhile try Adrian Slywotsky's "Art of Profitability" - the only one of his many that is holistic IMHO. And try KAISHA by Abbeglen as the only "whole enetrprise" dissection I've read.
Now the real question is why does no one think systemically and systematically about business ?

[patsi Krakoff, Psy. D.]

Excellent! There should be a book called In Praise of Level-headedness, and maybe you should write it, Bob. How happy we are, however, to find the secret keys to going from Good to Great. We want it all chunked down and bottom-lined for us and we don't want to think about the rigors of research. And of course we discount the random gods of just plain luck. All research is flawed and research that relies on retrospect and memory is terribly flawed. Neuroscientists have proven how easy it is to memory morph. Memory-based evidence just isn't reliable.

[Chip Overclock]

I've seen applications of the lessons of GOOD TO GREAT which bothered me. When I read the book myself, it was pretty clear to me that "get the right people on the bus" was referring to the senior management, e.g. VP and above. At least one of my former clients applied it to everyone, including the engineering stuff, laying off engineers with the rationale that "they weren't on the bus", whatever the hell that meant in that context. For sure it was effective in shutting up the expression of any contrary opinions by the engineers. This same organization implemented forced ranking and laying off the bottom 10%, so it paid to keep your mouth shut.

[Glenn Whitfield]

Bob,

You are right on. I debate this with 'Collins Disciples' all the time. Also, I believe what adds to the issue is that too many people have stopped thinking. They read a book, follow it blindly, and believe they have all the answers. When they should read it, apply some critical thinking to see if and how it applies to their situation, then implement as appropriate.

I talk about what to do when your audience doesn't want to think here: http://itbusinessalignment.wordpress.com/2009/04/02/when-thinking-isn%e2%80%99t-an-option-tell-a-story/

Great Post!

[Mark Schar]

Amen! Well said, Bob. There's nothing wrong with providing advice, advice that's worked for you. Just label it as such. Advice masquerading as research is bad pizza no matter how well it sells.

[Scot Herrick]

Although outside the realm of books, I'd suggest the same flaws in the continuous "100 best places to work" type articles in magazines. They send surveys to PR departments and then publish the results without really surveying the employees.

And your analysis of this type of business book is spot on.