Debunking Some Hot Business Books


A new book is claiming to debunk some of the business junk that is out there.

In The Halo Effect … and the Eight Other Business Delusions That Deceive Managers, Phil Rosenzweig tears into some of the most popular business books of recent years, including the bestsellers In Search of Excellence and Good to Great. Along the way, he argues that many of the pat principles bandied about in the business world are based on misguided thinking and flimsy research.

I don't expect this book to be popular, any more than I expect a fantastic but complex post like Mike's Handicapping the Carr-Benkler Wager to appear on the front page of Digg. People don't want to think, and in many areas of life you will be more successful providing cookie cutter answers than in pushing people to accept the complexity of truth.

A little over a year ago, I wrote about Why Good To Great Isn't Very Good. I assumed that since I was questioning the research behind one of the greatest business books of all time, the post would be pretty popular and lead to a blogosphere debate. It went unnoticed, except for the occasional nasty emails I received when someone stumbled across it via Google search. They usually want to appeal to some authority (their boss, their professor, a business celebrity) and tell me how much their authority figure liked "Good to Great" and how wrong I was about it. The funny thing is – no one ever addressed my questions about the research.

Now it seems that Phil Rosenzweig has taken the analysis even further than I did.

Similarly, managers may be intrigued by the appealing concept of hedgehogs and foxes used in the 2001 hit Good to Great: Why Some Companies Make the Leap … and Others Don't. The book makes the case that, among other things, successful companies are like hedgehogs: They have a narrow focus and go after it with incredible discipline. Fox-like companies, in contrast, are less successful because they scatter their attention and energy and are prone to changing direction. Rosenzweig suggests that all that talk of foxes and hedgehogs may be plain hogwash because the book's author used questionable research methods to figure out why some "good" companies went on to greatness while other good companies didn't.

"If you start by selecting companies based on outcome, and then gather data by conducting retrospective interviews and collecting articles from the business press, you're not likely to discover what led some companies to become great. You'll mainly catch the glow from the halo effect," he writes.

No testing for disconfirming evidence. That was Jim Collins' problem. Or at least, if he did it, he didn't write about it in the research notes because I read them all.

Let me put this in perspective with a sports analogy. Would you subscribe to a theory of basketball that said all you had to do to win games was to master free throw shooting? Would you play a game with a simplified strategy like only shooting 3-point shots? No. That would be stupid. So why should a similar mindset work in business?

Success in basketball comes from building out your tool-kit so that you can do whatever needs to be done to win the game. Success in business is the same way. These business books aren't useless, but they aren't panaceas either. Take them for what they are – a single perspective on a strategy that works in a limited number of situations. Call on it when you have to, but don't be driven by it. And don't blindly take my word for it, because that's no better than accepting one of these books without question. Think for yourself, retain a skeptical attitude towards claims of breakthroughs and revolutions, and you will likely find yourself on the right path most of the time.

  • Rob,

    I can’t argue with your critique of Collins’ methods, but I’m not sure how much it matters. I’d have to re-read my copy, but I don’t recall the part where he said you couldn’t be great without following each and every one of the book’s concepts. As Rosenzweig points out (and I’ve written about in When Bad Things Happen to Good Concepts: success or failure of any idea is highly dependent upon individual circumstances and execution.

  • Rob and Mike,
    I had the same 2 thoughts. Collins and Waterman/Peters brought many very valuable concepts to managers like myself. They were easier to understand that Ackoff, Jaques, Drucker, etc. However, as Rob points out, they also took a grievously flawed way of thinking and used it to justify their insights. This led to other less honorable gurus to follow the same path to justify their harmful nonsense.

    Didn’t Dante have several levels of Hell? I would use that for gurus too.
    And the lowest layer should be reserved for “bunk” artists like Trump and Kiyosaki.

  • The discussion here seems to be about Collins’ book and “research” but the larger issue is about the need for sifting through the material presented in the business press to find the nuggets of truth. I have not read Rosenzweig’s book yet, but it sounds similar in some content to Sutton and Pfeffer’s “Hard Facts, Dangerous Half-Truths and Total Nonsense.” In the end there is no magic stone where one rub will make all things wonderful forever. We must fall back on the line from those old Caterillar ads: “There are no easy answers. There are only intelligent choices.”

  • I agree with you to a point. Yes, individual things said in business books often prove to be wrong, not applicable, or only workable in certain situations.

    However, the fallicy underlying Rosenzweig’s argument is that people read these books and follow only that and all of that advice to run their business.

    Someone seems to have forgotten that the purpose of books (as ideas in print) is to *encourage* people to think.

    These aren’t “guaranteed business manuals”, they are books. With other people’s ideas. That frequently contradict each other. And that’s okay.

    The benefit of reading other peoples’ ideas is that you’re getting new ideas, trying new things (some of which will work and some of which will not), and improving yourself and your business.


  • Very well put, Dan!

  • “The purpose of books (as ideas in print) is to *encourage* people to think???” To each his own I guess, but I read books to “learn.” (Yes everything is not applicable to every blah, blah, blah) And back to Rob’s point, even for those who only want to be “encouraged to think” how does it help them when they are led to think using severely flawed methods and faulty logic? That’s his criticism as I read it. Am I wrong?

  • Yes, you read books to learn. But, since you’re presumably older than 12, I’m guessing that you also understand every author (me included) has a bias that probably doesn’t match with yours.

    As a result, you don’t accept everything every author says as Gospel. The result is that they make you think about things that you don’t normally think about or in a way that you haven’t thought about it before.

    As to the point of the post, the fact that they only took successful companies and tried to figure out what was the same doesn’t mean that they didn’t come up with some excellent ideas for our own companies.

    I try to model my behavior after people I consider successful. Now, since I didn’t follow behaviors of all mankind since birth, I can’t say for certain that the behaviors that I model *made* these people successful.

    Maybe they picked up the behaviors after they were successful. Maybe they developed from previous failures. Or, just maybe, their success is a result of these behaviors.

    The honest truth is that we don’t (and can’t) know for sure either way. That doesn’t mean that the behaviors or bad or that they will make me unsuccessful. But I’ll try a few and find out.

    Similarly in business, I could wait for someone to waste a lifetime doing research on all company behavior to determine what the specific reasons for the good ones’ success.

    Or, I could try out new ideas on a selective basis, keep the ones that work, dump the ones that don’t, and repeat.

    Wow. That was long. Sorry about the length. Hope it’s clear to everyone what I’m saying!


  • Rob

    I don’t think you need a complete data set to make educated guesses about what works and what doesn’t. Statistical sampling works fine. The problem is that just because you shouldn’t take any book as gospel doesn’t mean you should put them all on equal footing. It’s like saying all fad diet books are equal. G2G receives way more attention than it should, considering that there are plenty of much better and more useful business books.

  • So….I’m confused.

    Are you upset because there exist business books with poor research?

    Or are you upset because a lot of journalists are swooning over those books?

    Either way, I don’t see a resolution coming any time soon to those problems.

    And it sounds like you’re thoughtful enough to be able to see what is worthwhile and what is not.

    Perhaps the guy next to you (providing he’s not a journalist) is, too.


  • Rob

    Dan, that’s an excellent question. My concern is simply that G2G has been built up by the average business book reader as some sort o panacea that it isn’t. What I should probably be blogging about, really, is the lack of independent thinking among most business folks. The business books themselves are harmless to people who read them with a healthy does of skepticism.

  • Dan Gilliland

    It is true that since Collins only found 15 companies in the modern history of the Fortune 500 that have gone from crappy to great his sample is too small to be 100% perfect. So what!!!!

    I’ve been living the 3 circles of the Hedgehog without knowing it. I naturally gravitated towards what God has put me on the earth to do. I love what I do and amazed that I get paid to come to work everyday. I get paid a fair enough wage to live beach front in San Diego. I am able to ride my bicycle on the boardwalk to work 5 blocks from the beach. The last time I was in a traffic jam to get to work was 1994.

    I have been using the lessons of the On the Bus/Off the Bus theory to improve my relationships at work. I’ve used the lessons put forth from the book “1st Break All the Rules” to fully use the bus theory.

    Keep living the rat race. Maybe you might be able to save enough money to vacation in Pacific Beach San Diego CA. 92109 for your 2 weeks per year.

  • I think from the healthy debate here alone, we can conclude that there is enough independent thought in the business community to see us through.

    And those who can’t think independently will fail (which is good – you don’t want them at the helm, do you?) and, hopefully, learn for next time.


  • Steve

    For me Collins did about the best you could do with the data at hand. By the time Rosenzweig gets done with his fantasy 50 year longitudinal study to come up with the truth the competition will have put him penniless in an old folks home. In the meantime he is having a jolly ‘ol time cutting down the narrowing of the confidence interval from the 60% that Peters gave us to the perhaps 80% level Collins has quite generously given us.