The one-sentence summary
Beware of the wisdom offered by business gurus because it may be little more than false patter and naïve arguments that could mislead you.
WHAT THE BOOK SAYS
· Much of our business thinking is shaped by delusions – errors of logic and flawed judgements that distort our understanding of the real reasons behind a company’s performance
· These delusions affect the business press and academic research, as well as many bestselling books that promise to reveal the secrets of success or the path to greatness
· The most pervasive delusion is the Halo Effect. When a company’s sales and profits are up, people often conclude that it has a brilliant strategy, a visionary leader, capable employees, and a superb corporate culture
· When performance falters, they deduce the opposite but actually little may have changed. Other delusions are:
· Correlation and Causality: two things may be correlated but we may not know which causes which, or whether they are linked at all
· Single explanations: there are usually many reasons for something, not just one
· Connecting the winning dots: finding similar features in successful companies doesn’t help because they can’t be compared accurately with unsuccessful ones
· Rigorous research: if the data aren’t good, it doesn’t matter how much analysis is done – the conclusions will still be false
· Lasting success: is almost impossible to achieve – almost all high-performing companies regress over time, regardless of what they do
· Absolute performance: performance is relative, not absolute. A company can improve and fall behind its rivals at the same time
· Wrong end of the stick: successful companies may have highly-focused strategies, but that doesn’t mean such strategies guarantee success
· Organisational physics: performance doesn’t obey immutable laws of nature and cannot be predicted with the accuracy of science
WHAT’S GOOD ABOUT IT
· This is a hugely thought-provoking book that questions many pieces of received wisdom
· The analysis of In Search Of Excellence and Built To Last may force you to review your opinion of these two famous business books
WHAT YOU HAVE TO WATCH
· Nothing. It’s really worth reading.