Wednesday, April 22, 2009

On The Train (Are ‘Great Companies Are Just Lucky?), Apr 14, 2009

My 2020 train went missing from the schedule once again. Not like yesterday the train was packed at KL Sentral.

Before I left the office I was reading Dave Snowden’s blog on Cause and Effect. He argued from the perspective of Innovation. What interest me about this blog was not only the blog itself but the HBR article Are “Great” Companies Just Lucky? that he mentioned.

Let me requote the first paragraph that Dave quoted.

‘Studies that examine high-performing companies to uncover the reasons for their success are both popular and influential. They’re the basis of the insights behind best sellers like In Search of Excellence and Good to Great. But there’s a problem: The “great” companies from which these studies draw their conclusions are mostly just lucky.’

While reading the short article I said to myself ‘Randomness and Black Swan’. Reading further down the paragraphs I was vindicated.

‘Our concerns go much deeper. 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.’

The article was written based on a full report by Deloitte. Once again I needed to detox my thinking of the whole things. The full study can be found here

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