My favourite columnist in The Economist, Schumpeter, had a little rant last week about “The three habits of highly irritating management gurus”. What caught my cynical eye was towards the end of the piece when he points out how frequently corporations cited in the gurus’ books as model, end up in trouble a few years later. He cites a piece of research[i] by Andrew Henderson of the University of Texas in which Henderson looked at the firms cited in “success studies” like “In Search of Excellence” and “Good to Great”.
“We evaluated 287 allegedly high-performing companies in 13 major success studies. We found that only about one in four of those firms was likely to be remarkable; the rest were indistinguishable from mediocre firms catching lucky breaks.”
“Many of the ‘great’ companies cited are, in fact, nothing special; consequently, the researchers are simply imposing patterns on random data. That’s not science – it’s astrology”
Way to go Henderson (you’re lining up to be one of the first to join my noble profession of MBA Bubble Bursters).
In a nicely circular reference this reminded me of a part of “Good to Great” on leadership. In it Jim Collins described how frequently the CEOs of the ‘great’ companies attributed their success to luck. One, Joseph Cullman 3rd, CEO of Philip Morris, even recognised it in the title of his autobiography “I’m a Lucky Guy”:
“I was a very lucky guy from the very beginning of my life: marvellous parents, good genes, lucky in love, lucky in business, and lucky when a Yale classmate had my orders changed to report to Washington, D.C., in early 1941, instead of to a ship that was sunk with all hands lost in the North Atlantic, luck to be in the Navy, and luck to be alive at eighty-five.”
Jim Collins then goes on to build this whole “window and mirror” analogy around the luck observation; how those CEOs that cite it tend to credit other factors like good people, rather than their own skill. Or maybe they’re just being realistic?
So I went to my management books and started looking through the indices. No mention of ‘luck’ in Porter’s “Competitive Strategy”, none in Hamel’s “Leading the Revolution”, not a hint in Bill Gate’s “The Road Ahead”, nor in Kim and Mauborgne’s “Blue Ocean Strategy”, not in Moore’s “Crossing the Chasm”, neither in Bowman and Faulkner’s “Competitive and Corporate Strategy” nor in Johnson and Scholes “Exploring Corporate Strategy”. Nope, I had to go back to the first century AD to discover a useful reference:
“Luck is what happens when preparation meets opportunity.” (Seneca, Roman philosopher)
Surely that is the wisest advice to us all as we try to navigate the treacherous seas of chance, to be prepared when an opportunity presents itself, to recognise that opportunity and be ready to run with it. Maybe that, ultimately, is what made those CEOs lucky, not the opportunity but the willingness to do something about it.
[i] “Are ‘Great’ Companies Just Lucky”, Harvard Business Review 87, 18-19., Michael E. Raynor, Mumtax Ahmed, and Andrew D. Henderson