Over the holiday break, I finished up Daniel Kahneman’s new and much-praised book Thinking, Fast and Slow. I consider it quite an achievement, and by that I mean both the book itself (a deep, personal, and introspective look back at the career of one of the most important psychologists of our time) and my actually reading it (the book weighs in at almost 500 very dense pages).
One of the many interesting things about Dr. Kahneman is that, as a psychologist, he actually won his Nobel prize in economics. If you are interested in learning more about how that happened, go here.
Over the last few months, Kahneman’s book has been sitting near the new Jim Collins book Great by Choice in the rarefied air of Amazon.com’s top 100 books list (I reviewed Great by Choice a few months back here). So I thought it was interesting that Kahneman challenged Jim Collins and his book Built to Last in Chapter 19. It was a pointed attack not just on Collins but the entire genre of success story-inspired business books.
Since I spend quite a bit of time reading these sorts of books, I was really interested in his viewpoint. I mean, have I been wasting time reading that I could just as usefully spent watching reruns of Tosh.O or Arrested Development on TV? Is there real value in studying successful businesses and leaders or is it just an illusion?
Here’s what Kahneman says:
“The basic message of Built to Last and other similar books is that good managerial practices can be identified and that good practices will be rewarded by good results. Both messages are overstated. The comparison of firms that have been more or less successful is to a significant extent a comparison between firms that have been more or less lucky. Knowing the importance of luck, you should be particularly suspicious when highly consistent patterns emerge from the comparison of successful and less successful firms. In the presence of randomness, regular patterns can only be mirages.”
Kahneman cites Philip Rosenzweig’s book The Halo Effect (which is now on my reading list) and quickly jumps to the punchline of that book:
“[Rosenzweig] concludes that stories of success and failure consistently exaggerate the impact of leadership style and management practices on firm outcomes, and thus their message is rarely useful.”
So are we to believe Kahneman and Rosenzweig? Is there really no value in studying the leadership and management practices of great companies?
Even after reading the whole book Thinking, Fast and Slow and understanding the psychological principles that trick my brain into applying great importance to these sorts of success stories, I still find the conclusion a hard one to accept. And then Kahneman throws the knockout punch:
“Stories of how businesses rise and fall strike a chord with readers by offering what the human mind needs: a simple message of triumph and failure that identifies clear causes and ignores the determinative power of luck and the inevitability of regression. These stories induce and maintain an illusion of understanding, imparting lessons of little enduring value to readers who are all too eager to believe them.”
Okay, I get it. Kahneman views me as a sucker. And who am I to argue with a Nobel Prize-winning psychologist?
But I just can’t help it. I think there is plenty that we can learn from the lessons of innovative businesses like those that Collins profiles in Built to Last. Kahneman may be right that these books suffer from an illusion of academic rigor that breaks down under close study. And yes, they probably need a disclaimer (“The author makes no promise or guarantee that if you follow the principles outlined in this book you will become Google overnight. Individual results may vary.”).
But what these books lack in academic rigor they make up for in one simple area: they inspire people. To not settle for what they see today. To try something new. To learn. To grow. To believe.
They create the possibility of hope. “Others have done it. I could too!”
So in that sense, Kahneman’s critique is somewhat akin to an adult telling a three-year old child that there is no Santa Claus. My view? The analysis is technically correct, but emotionally bankrupt.
Where success story business books fail the analytical brain, they often are just what the emotional brain needs.
So I don’t know about you, but I’m going to keep on reading business books. By constantly refueling my head with new ideas, I’ll always have something to learn and try. I’ll continue to be inspired by authors like Jim Collins, by companies and leaders who have seen great success, and I’ll suspend my academic doubts in the hope of learning new lessons that might just work.
I’d love to hear what you think. If you believe Kahneman’s critique of Collins and the genre is on the money, or if you believe instead that there is still value in sharing and learning from business success stories, let me know in the comments section below.
On occasion I get the opportunity to speak publicly about some of the things I’ve learned over the years applying the open source way in organizations.
In almost every case, when the Q&A session arrives, I’m greeted with at least one question from a poor soul who loves the idea of applying the open source way to management and culture, but doesn’t think it would ever work in his/her specific organization. Usually the comment is accompanied by some horror story about an evil co-worker, hierarchical boss, crappy HR policy, or some other impediment that would cause the open source way to fail.
And the sad truth? These folks are probably right. Many of these concepts wouldn’t work in their organizations.
So why do I waste my time talking about things that may not work in many organizations? Two reasons:
2) the wind
Let me be honest. I’ve never run into a perfect model of the open source way in practice (if you have, please point it out to me!).
There are clearly some organizations that have figured out how to build open source principles into their DNA better than others. Wikipedia is a good example. The Fedora Project is another. Still, my guess is the people who are deeply involved in those projects on a daily basis would probably be able to show you some warts, places where old-skool practices are still evident.
So why not be more realistic? Why not give up and accept that some of these principles work better in theory than they do in practice?
Simple: I have hope.
What gives me hope? Two things. First, I have seen first-hand many examples of great things that happen when open source principles are applied within organizations. From the collaboratively-designed mission of Red Hat to the work of Fedora marketing team, I’ve personally witnessed the power of open source principles in action.
Second, I believe in the pursuit of perfection. Why not aspire to create better companies than we have today? What do we have to lose? I don’t know that we will ever see a perfect open source company. But by pursuing perfection, we are likely to get a heck of a lot closer than where we are today.
[Read the rest of this post on opensource.com]
If you’ve ever watched a road bike race like the Tour de France, you know the peloton is the big group of riders that cluster together during the race to reduce drag. It’s a great example of collaboration in action. But let’s face it: the people in the middle of the peloton may go faster than they would otherwise, but they don’t win the race.
When it comes to creating and innovating, most companies (and employees) are in the peloton. They are doing enough to survive, but they are stuck in the pack. And if they stay in the pack too long, they lose.
Escaping the peloton is tough. Often, you see a cyclist break away, sprint for a while, only to get sucked back into the main group over time as the pressures of making a go independently prove too much.
You’ve probably felt this way at work. You come up with an amazing idea, one that will change the company forever. But little by little, people—even the well-meaning ones—chip away at its soul, until the idea goes from being amazing to, well, average. You end up being sucked back into the peloton.
After this happens one too many times, you may feel like you want to stop collaborating and try to make things happen on your own. Don’t do it. Even Lance Armstrong could rarely break away from the peloton without his teammates’ help.
Instead, here are three tips to help you escape the creativity peloton without giving up on collaboration.
[Read the rest of this post on opensource.com]
This week I was lucky enough to attend the Ernst & Young Strategic Growth Forum in Palm Desert, CA. As you may recall, last year Red Hat Chairman Matthew Szulik was the national Ernst & Young Entrepreneur of the Year, and later this week, he’ll hand over his title to the next entrepreneur in waiting. One of the most exciting things about the Strategic Growth Forum is that it brings together some of the smartest entrepreneurial minds in the world in one place, and this morning, I had an opportunity to hear from one of the best.
Howard Schultz, Chairman, President, and CEO of Starbucks, who won an Entrepreneur of the Year award in 1993, spoke about his experience leading Starbucks through the economic crisis. As Starbucks began going through hard times, Schultz, who had given up the CEO role in 2001 (while remaining Chariman), decided it was time to take back the CEO responsibilities himself in early 2008.
Why? He was worried that the distinct culture, mission, and values that had brought the company great success were eroding.
According to Schultz, he came back into an operational role because he felt that the way out of crisis was not a simple change in business strategy, but instead– in his words– “love and nurturing.” His key to turning things around was revitalizing the investment in his people, recommitting to the core purpose of the organization and providing employees with hope and inspiration.
He says the transformation of Starbucks since this revitalization has been key to a tremendous amount of new innovation happening inside the company. People have even commented to him that it reminds them of what the early days at Starbucks must have been like.
Schultz took 10,000 of his best people and brought them together in New Orleans in late 2008 for a leadership conference where they spent 50,000 volunteer hours helping communities re-build after Hurricane Katrina. Below is a documentary that was filmed about this event.