Logical Fallacies Underlying Best-Selling Business Books

Article Introduction (Via Drake Bennett @ Boston.com)

NOTHING SUCCEEDS LIKE success – and few books succeed like books about success. Since the 1982 publication of “In Search of Excellence,” by the McKinsey consultants Tom Peters and Robert Waterman, the business-success book has grown from a genre into a juggernaut. The most influential among them, like “The Leadership Engine” and “Reengineering the Corporation” and “Built to Last” and “Good to Great,” sell millions of copies, are translated into dozens of languages, and shape the habits of managers from Detroit to Dubai. Their authors launch research firms and leadership education institutes, consult for Fortune 500 companies, and command $50,000 fees to speak at conferences and corporate retreats.

While the particulars vary, the basic idea underlying the literature is the same: that the secrets of success can be divined by careful study of the institutional habits of the world’s business all-stars – companies that set the standard for their industries, that thrive in tough times, companies that win the war for talent, companies that are built to last. In the imperturbable focus on core values of Hewlett-Packard or the restless innovativeness of Google or the ruthless accountability of GE, there are lessons for us all.

Additional Article Excerpts (Via Drake Bennett @ Boston.com)

But a few consultants and business school professors have begun to argue that much of this literature is, in fact, useless. Far from a science, they argue, the success literature is made up of little more than just-so stories in which authors use dramatic anecdotes – often drawn from previously published magazine profiles or interviews with the very executives whose performance is being examined – as evidence for “secrets” that amount to little more than warmed-over homilies. The critics accuse the success gurus of cherry-picking their evidence, of doing little to double-check their results, of circular reasoning, and of making elementary statistical errors.

“These books try to impress you with the massive amounts of data that they gather, but much of the data are not valid,” says Phil Rosenzweig.

And most recently, a team led by Michael Raynor, a researcher and consultant at Deloitte Consulting, has begun to argue that business-success books aren’t even particularly good at spotting success in the first place: When you take a closer look at the companies they study, the accomplishments of the vast majority are just as likely to be due to simple luck.

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16. April 2009 by Miguel Barbosa
Categories: Behavioral Economics, Curated Readings | Leave a comment

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