Author's Blog

"The Four Principles of Enduring Success"? Not Very Likely!

The July-August 2007 issue of Harvard Business Review has a lead article titled “The Four Principles of Enduring Success” by Christian Stalder of Innsbruck University.  It's the latest effort by business researchers to identify the principles of high performance in business, and it's worthy of examination on a website that is interested in clear thinking about business performance. 

    

First, a personal note.  I met Mr. Stalder at the meetings of the Strategic Management Society last autumn in Vienna, where he heard me discuss some of the themes in The Halo Effect.  He is a smart and well-intentioned man.  Recently, Mr. Stalder kindly sent me a link about the article, and since then we have corresponded about the methodology he used in his study.  In addition to the HBR article, there is expected to be a book coming out in the future.  So perhaps there is a way for my comments, below, to sharpen the study and improve the validity of its claims.

Some Common Questions from the Audience

While I've been away for much of the last month -- which explains the silence on the blog scene for a while -- I've had the chance to make several presentations to groups of managers.  The good news is that the ideas in The Halo Effect are very well received.  It is also interesting to see the sorts of questions and comments I get.  A few questions have come up in more than a few settings, so I'll list them here, with the sort of answers I give.

Question:  Many of the books you criticize have gathered extensive historical data.  Are you saying we can’t learn from experience?

    

Answer:  Not at all – it’s very important to learn from experience, but we have to be sure to learn the right lessons!  We can only draw solid lessons if we base our analysis on valid data, not data that are biased or prone to the halo effect.  The problem in so many studies that claim to look at the experience of other firms is that the data they rely on are from sources strongly shaped by performance.