Today’s WSJ has an article whose theme is, “What we can learn about business from a Church?”. There are many such articles and even books that follow this theme on, “what can we learn about business, marketing, pricing, product development etc”, from completely unrelated fields (for example a street performer or a child’s Lemonade stand to which I have contributed as well).
It is as if we think that lessons from business research, publications and successful businesses are irrelevant that we need new lessons from these unrelated wells of knowledge. May be these are indeed better sources, but I would like to caution you about these articles and studies that want to teach us:
- Many of these studies are cursory reviews, some just look at one individual sample. There is no rigor to the methods employed. The observer picks what is convenient and readily available to them (their neighborhood Church, lemonade stand, farmer’s market, parking lot (mea culpa)).
- The most common pattern is, the observer picks successful entities and look for observable positive traits. There is no attempt to study those that are not doing so well, resulting in survivorship bias.
- Success is defined narrowly or as an afterthought – metrics like eyeballs, sign-ups, crow etc are used. The studies do not consider alternative scenarios where success could be an order of magnitude different from the current state?
- There is no attempt made to look at the origins and longevity of these traits. There is one measurement made and results reported.
- These traits are treated as new/unique, as if these have not been reported before. The error is in not seeing the traits as examples of established marketing principles but rather as something totally new.
- Assuming that the traits are a result of deliberate action taken by the entity and neglecting the possibility that these could just be random or incidental side effects.
- Attributing the success of the entity to the observed positive traits. That’s a causation error.
- Once causation is implicitly assumed, the observer makes the leap that the positive traits are so generic (e.g., everyone should give away for free and let customers pay what they wish) that these not only apply to other entities of the same kind but also to totally unrelated entities like Tech Startups.
I believe these studies add very little value or even distract us from the main goal. It is tempting to look for easy lessons but these so called lessons may lead us down the wrong path. Every example you see stated as a paragon of excellence should be treated as nothing more than a case study – with flaws in information reported.
Where do you look for your lessons learned?
Here are some books that will help you see the fads for they are:
- Hard Facts, Dangerous Half-Truths And Total Nonsense: Profiting From Evidence-Based Management by Jeffrey Pfeffer and Robert I. Sutton
- The Affluent Society by John Kenneth Galbraith ( chapters on Conventional Wisdom and Consumer sovereignty )
- Wrong: Why Experts keep Failing Us by David Freedman
- Fooled By Randomness By Nassim Nicholas Taleb