Phil Rosenzweig's Cautions Concerning Business ResearchWhenever I read some business author's account of research he or she has conducted, I do my best to determine whether we're in the realm of actual knowledge creation or, much less helpfully, in the realm of anecdote.
Phil Rosenzweig, a professor of strategy and international management at the International Institute for Management Development in Lausanne, Switzerland, has just published The Halo Effect: ... and the Eight Other Business Delusions That Deceive Managers, in which he addresses this issue.
After, among other things, explaining the flaws in research that works backwards from an attractive outcome (e.g., Company X has achieved high profits for three years in a row), Rosenzweig cautions managers to keep five timeless principles in mind. As summarized in a Knowledge@Wharton article, with additional comments by yours truly, these principles are:
- Good strategies involve risk, and no strategy is foolproof. Therefore, take Tom Peters' advice on strategy with a grain of salt.
- Execution also is uncertain. What works well for one company may not be effective for another company. Beware of casual benchmarking.
- Chance plays a greater role in success than managers may want to admit. Therefore, flexibility and quick-thinking are essential complements to strong analytical planning skills.
- Bad outcomes don't always mean that managers made mistakes. Likewise, favorable outcomes don't necessarily mean that the managers made brilliant decisions. Again, beware of gurus peddling anecdotally grounded advice.
- "When the die is cast, the best managers act as if chance is irrelevant. Persistance and tenacity are everything." I would say that good judgment and common sense are also highly important.