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.

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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.