A random search for excellence

July 4th, 2013  |  Published in Performance

Some beliefs are hard to shift – like the idea that strategy is hard and has to be done by clever and important people for instance – therefore not something that the workforce as a whole can be involved with. Or proper preparation prevents poor performance. Fail to plan and you plan to fail etc.

There may have been a bit of a do when, in 2009, Deloitte published their findings from the Persistence Project in a somewhat overlooked paper called A random search for excellence but I’m not sure that I remember much of a ripple at the time. Key conclusion:

“Many believe we can learn how to be great by studying greatness. But what is great performance? It turns out that most studies typically measure the wrong things and set the bar far too low. Consequently, researchers who think they’re looking at successful companies are usually studying the winners of a random walk. What does this mean for the soundness of some of the most popular and influential management studies? Simply this: You can’t trust them”

Now for those us who designed management development programmes based on the principles espoused in some of the books whose claims were explored in this study – Good to Great for example – this is a bit of a slap in the face to say the least. For organisations who modelled themselves around these principles it may amount to a great deal more than just scraping away the particles of omelette sticking to the face. What it basically adds up to is many of us have been persuaded that blind luck – effectively a random walk – is strategic effectiveness. Or, as Rebecca Henderson puts it:

I begin my course in strategic management by asking all the students in the room to stand up. I then ask each of them to toss a coin: if the toss comes up “tails” they are to sit down, but if it comes up “heads” they are to remain standing. Since there are around 70 students in the class, after six or seven rounds there is only one student left standing. With the appropriate theatrics, I approach the student and say “HOW DID YOU DO THAT??!! SEVEN HEADS IN A ROW!! Can I interview you in Fortune? Is it the T shirt? Is it the fl ick of the wrist? Can I write a case study about you? …”

This reminds me of the range of theories bandied around to explain how Honda came to dominate the motorcycle industry from the 1960s onwards – the Boston Consulting Group, in their report to the British Government, explained the phenomenon in terms of strategy. Poor in the case of the UK, good in the case of Honda. Other observers, such as Richard Pascale in The Honda Effect Revisited saw it differently:

“Their success, as any Japanese automotive executive will readily agree, did not result from a bold insight by a few big brains at the top. On the contrary, success was achieved by senior managers humble enough not to take their initial strategic positions too seriously… The Japanese don’t use the term “strategy” to describe a crisp business definition or competitive master plan. They think more in terms of “strategic accommodation,” or “adaptive persistence,” underscoring their belief that corporate direction evolves from an incremental adjustment to unfolding events.”

So there you have it – strategy is less clever people writing on the back of fag packets and more corporate direction evolving from incremental adjustment to unfolding events – the sense and respond principle – or Snowden’s safe to fail probes if you will. Pascale’s thoughts are from 1996 and the Deloitte research was first published in 2009 – but both are up to the minute.

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