Thursday, March 14, 2013

Repeatability by Zook

Chris Zook's Repeatability may be the worst business book I've ever read. It's not that this book about building enduring businesses did not make sense. Just the opposite, in fact; it made perfect sense. But to me that's why it is so potentially dangerous. It draws its conclusions (and therefore its advice) erroneously, in my opinion. But by making its conclusions plausible, it can probably convince a lot of readers to follow courses that may not be justified.

I believe the best way to elaborate on this issue is through the lens of the delusions presented in Rosensweig's Halo Effect (a business book that I highly recommend). Rosenzweig presents a number of delusions from which many business books suffer, and I believe Repeatability serves as a textbook case for these delusions.

First, the authors appear to judge companies not based on their actions, but based on their successes or failures. What I mean by this is that a company that does poorly is said to have lost "focus" on its "core", while one that has done well is said to have done so because of its "focus". If the authors could define a line delineating the difference between core and non-core, perhaps such a distinction could be drawn. Sadly, the line appears arbitrary; where companies are successful it's because they focused on their core, and when they weren't it's because they didn't!

A great example of this is Lego during the early 2000's. Lego's new CEO tried a bunch of stuff (e.g. Harry Potter figurines) roughly related to Lego's core of toy building blocks for children. This strategy failed, the CEO was dismissed, and executives, the media and authors like Zook blame the downfall on things like a lack of focus. On the other hand, had Lego not tried to expand, it likely would have seen flat/declining sales and been accused of not being innovative. There simply wasn't enough information to determine what should have been done; authors that conclude otherwise are not giving uncertainty enough credit, and are thus probably leading their readers down a faulty path.

Other delusions from which this book suffers (in my humble opinion only, of course) include attributing causation where only correlation has been established, relying on a couple of explanations when there are likely many, connecting the winning dots, and believing company performance/predictability can be boiled down to something like immutable laws of organizational physics.

Don't be fooled by books like Repeatability. Arm yourself by reading the Halo Effect if you haven't already.

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