Business Exposed128
The changes in workers’ actual activities really had no inuence;
productivity at the two job-enlargement plants hardly differed at
all, nor did absenteeism at the two job-rotation plants. The plant
managers’ expectations caused all the effects.
Albert wrote, “the results provide evidence that managerial
expectations concerning performance may serve as a self-
fullling prophecy”. People somehow achieve what they (are
led to) believe will happen, regardless of any actual changes
made to the organization. This is
where management (and the science
of management) departs from the hard
sciences: predictions of the return of
Halley’s comet do not inuence its
orbit, but being told whether we’re stars
or crap at our jobs inuences our subse-
quent achievements.
“Reverse causality” – sorry, but life’s not that simple
Let me also introduce you to a related phenomenon called
“reverse causality”. Have you ever heard of or even read some
of these best-selling business books: In Search of Excellence, Built
to Last, or Prot from the Core? Their authors usually follow a
simple, yet appealing, formula. They look at a number of very
successful companies, see what they have in common, then
conclude “this must be a good thing!”, write a book recom-
mending everybody should do the same thing, and become
millionaires. Yet, reality – and management research – is really
a bit trickier than that . . .
One conclusion many of these business books draw is that one
should focus on a limited set of “core activities”. For example, as
Professor Jerker Denrell from the University of Oxford showed,
Prot from the Core authors Chris Zook and James Allan nd that
78 percent of the high-performing rms in their sample of 1,854
companies focus on just one set of core activities, while a mere
22 percent of the low-performing companies did. Hence, they
‘‘
but being told
whether we’re
stars or crap at
our jobs influences
our subsequent
achievements
’’
1296
n
Myths in management
conclude that companies should focus. Simple isn’t it? Yeah, but
a bit too simple . . .
What this “advice” ignores is that often underperforming
companies diversify into other businesses in order to try to nd
more rewarding markets. Thus, their “non-focus” is the result of
poor performance, rather than the cause! In contrast, it’s very
common for very successful companies to narrow their strategic
focus in order to concentrate on the business that brings them
most success. Again, their focus is not the cause of their success;
it is the result of it. Our best-selling business-book friends are
reversing cause and effect; recommending everybody to apply
more focus may be dubious advice at best!
Similarly, many of these business books conclude that the
high-performing companies they looked at all had very strong
and homogeneous corporate cultures. Hence, they conclude:
create a strong corporate culture! Seductively simple again . . .
Unfortunately, not so sound.
It is a well-known effect in academic research that success may
gradually start to create a homogeneous organizational culture.
Again, the coherent culture is not the cause of the company’s
success, but the result of it! What’s worse, a narrow, dogmatic
corporate culture may lead to trouble. When the rm’s business
environment changes – and business environments eventually
do – it makes the company rigid and unable to adapt: the
phenomenon I discussed in Chapter 2, known as the success trap.
Indeed, the authors of In Search of Excellence, (1982) Peters and
Waterman, who analyzed 43 of “the most excellent companies in
the world”, also concluded that a strong corporate culture was a
necessity for business stardom. However, if you look at their list
of 43 “most excellent companies” today, only three or four might
still make the list (Johnson & Johnson, Intel, Wal-Mart, Mars);
the remainder has fallen off the list or disappeared altogether.
Hence, remember that “association is not causation”. For example,
that successful companies are associated with a very focused set
of business activities and strong corporate cultures does not
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