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 / Winter 2006 / Issue 45(originally published by Booz & Company)


Best Business Books: Management

This more skeptical approach toward both management academics and consultants runs through The Hare and the Tortoise: An Informal Guide to Business Strategy. The book is a collection of columns from the Financial Times by economist, consultant, and former business school professor John Kay. He uses the title metaphor to tell the tale of a tortoise who, tired of being outrun by hares, hires consultants to help him become fast and agile. He is excited by their compelling presentations of jaguars chasing down hares and resolves to embark on a change program to become a jaguar himself. Fortunately he is dissuaded by a wise old owl who tells him to stick to environments where his existing skills fit. It is this fit between a firm’s distinctive capabilities and the needs of a marketplace that is the essence of effective strategy. Professor Kay is critical of the approach of economists like Harvard Business School’s Michael Porter to competitive strategy, arguing that this perspective throws no light on the central issue: why different firms facing the same environment perform so differently. The compressed format of a newspaper column and Professor Kay’s lively metaphors make for easy reading. For those who do not have regular access to his writing, this book is a refreshing opportunity to catch up on an English perspective on European management.

Learning from Experience
Germany’s Iron Chancellor, Otto von Bismarck (1815–1898), used to say that people who learned from their own mistakes were fools and that he preferred to learn from the mistakes of others. But there is little evidence that Bismarck followed his own advice. Although he was a keen student of history, he never developed a systematic approach to politics based on either his reading of the past or the practices of others. Rather, he was a supreme pragmatist and one of the earliest practitioners of what has become known as realpolitik.

He was probably well advised to remain pragmatic. For as intellectual historian Crane Brinton pointed out in his book Ideas and Men: The Story of Western Thought (Prentice-Hall, 1950), fields of study such as philosophy, religion, and politics generate “noncumulative” knowledge as opposed to the scientific domain, where knowledge is “cumulative” and progress is genuine. The real problem with arts or noncumulative fields of study is that, unlike the sciences, they never prune their trees of knowledge. They add but they do not subtract. Artifacts come in and out of fashion, but they never disappear completely and they can be revived at any time.

Management seems to fall into Dr. Brinton’s noncumulative category. Students of the subject are presented with a dense jungle of often conflicting theories, principles, and practices, most of which are backed up by either folklore or anecdotal evidence rather than by scientific data. Different approaches appear, are adopted enthusiastically, and then disappear, only to be reincarnated later under new names.

Of course, the distinction between cumulative and noncumulative fields of knowledge is not a sharp one: It’s a spectrum along which bodies of knowledge may move, propelled by variation, selection, and retention, and where more successful explanations and methods gradually replace less effective ones. The place and pace of management along this continuum is a matter of conjecture. It is probably positioned somewhere between law, which is almost entirely noncumulative, and medicine, which has become more cumulative. According to Jeffrey Pfeffer, professor of organizational behavior at Stanford University’s Graduate School of Business, and Robert I. Sutton, professor of management science and engineering at Stanford, management should be closer to medicine. In their new book, Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting from Evidence-Based Management, the professors declare, “If doctors practiced medicine the way many companies practice management, there would be far more sick and dead patients, and many more doctors would be in jail.”

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