Monday, August 06, 2007

Worst practice learning theory means our favorite business bestsellers are all wrong

I love Dave Snowden's posts on worst practice. Here's a quote from a recent work in progress:

The extension of this pseudo-objectivity into the consultancy profession is endemic in the practice of knowledge management. The issue is well summarised in a delightful metaphor from Christensen & Raynor (2003) as follows:
Imagine going to your Doctor because you’re not feeling well. Before you’ve had a chance to describe your symptoms, the doctor writes out a prescription and says “take two of these three times and day, and call me in a week.”

“But – I haven’t told you what’s wrong,” you say. “How do I know this will help me?”

“Why wouldn’t it” says the doctor. “It worked for last two patients”

No competent doctors would ever practice medicine like this, nor would any sane patient accept it if they did. Yet professors and consultants routinely prescribe such generic advice, and managers routinely accept such therapy, in the naïve belief that if a particular course of action helped other companies to succeed, it ought to help theirs, too.

The metaphor represents a fundamental challenge to a case based, prescriptive approach using the benefits of hindsight (or retrospective coherence to use the appropriate CAS term). In particular it challenges one of the most common assumptions in knowledge management, namely that one of its purposes is to discover and disseminate best practice. One of the arguments in this paper is that avoidance of failure has had higher evolutionary value than imitation of success, and in consequence the human race is more inclined to learn from and distribute worst practice.

Reading the above made me wonder what this means for some of my favorite business books--and yours too: "In Search of Excellence," "Built to Last" and "Good to Great" combine a bit of statistical analysis to find companies that share certain qualities of goodness, then extract from those companies lessons we can all use to improve our own businesses. They're highly readable and their propositions tempting.

It is an utter waste of time trying to apply these lessons? I think the answer's yes.

Like the doctor prescribing whatever worked for the prior patient, there are so many factors at work in making a company successful (even for an extended period of time) that trying to create generalizations between two or more successful companies seems a fool's errand.

Some of these factors: condition of the market, competition, regulatory environment, governmental assistance/impediments, executive leadership, state of international trade, acts of God, technology lifecycle, partnerships/alliances, trendiness/hipness, inertia, effects of corruption, luck.

Shall I go on?

Hoping that duplicating five or so common traits of IBM, Nucor, etc.--assuming you can even achieve it--will help you be as successful is like playing a certain lottery number today because it won yesterday. (Even the companies themselves cannot reliably sustain their own success. Think of these companies profiled in "In Search of Excellence": Atari, Xerox, Wang, DEC. A fuller discussion is in the Criticism section of this Wikipedia entry on "ISoE.")

There's another doctor/patient story that, I think, demonstrates the power and simplicity of failure avoidance. Here it is:

Patient: (lifting his arm) Every time do this I get a pain in my side.
Doctor: Well, stop doing that.

(Photo from q83 via stock.xchng)