In this article Niendorf and Beck, of University of Wisconsin, Oshkosh content that due to two fatal errors, arguably one of the most influential business books ever written, Good to Great, provides no evidence that applying the five principles, of the book, to other firms or time periods will lead to anything other than average results.
The author of the book, Jim Collins, and his team performed data mining to narrow a list of companies down to the elite performers then identify characteristics common to these elite firms. Some of these characteristics were:
- Leaders focus on firm rather than themselves
- “Get the right people on the bus before you decide where to drive it”
- Get the facts before making decisions
- Know one thing rather than trying to know many things
- Preserve core values but be willing to change operating practices and business strategies
The 2 fatal errors that Niendorf and Beck discuss are: data mining and mistaking association for causation. They contend that patterns mined from one set of data, at one particular point in time are not necessarily applicable to other data sets and other points in time. They contend that Collins did not effectively filter out background noise and random variation in mining the “patterns”; he did not statistically test the patterns he believed he saw. They also contend that Collins mistakenly interpreted association as causation. Again, no statistical evidence from testing just claims. They do not argue that Collins conclusions and claims are incorrect, but that he provided no evidence that they are anything other than random patterns.
The authors of this article make a compelling case for the scientific method and application of rigorous statistical methods. I agree that, yes, this makes for good science and helps to narrow down causation out of mere association but there is also a place for art in the field of business and human relations. I see nothing wrong with Collins’ book it is just not the scientific book that Niendorf and Beck would like it to be; perhaps they would have been happier had it been packaged as art rather than science. There is a place for both art and science in business as in all human activities.