There are a number of business books which talk about how you should sell, what you do to grow, how you should run your business, etc. Many of these are from academics and the work is based on studies that they have conducted. Unfortunately, despite their ideas being validated by studies, while they do have some valid ideas, they are almost invariably wrong. Here’s why.
- The methodology is flawed: Every study has an audience that is surveyed. That audience is selected by the researchers. How the researcher defines that audience biases the study. The audience is then further limited by only including those who want to answer the survey. The end result is not a representative sample so researchers attempt to fix this problem with a statistical analysis. As Mark Twain once said, “There are lies, damned lies, and statistics.” A statistical analysis can make the data say anything the researchers want it to. If what they want is to publish a book, then the study will always validate what they want to write about.
- The data: When these studies deal with business data, most of the time they are limited to public companies. Since most companies are not public, they work from a limited as misleading group of data. The best example of this is the book, “Good To Great.” In this book, the authors created a study to determine what builds a great company. The book determined that these “great” companies included Fannie Mae and Circuit City. Shortly after the book was published Circuit City was bankrupt and Fannie Mae had to be bailed out by the government.
Academic studies are not a reliable indicator of what happens in the business world. There is an old saying, “In theory, theory and practice are the same. In practice they are not.” Academic studies deal with theory. It’s up to you to find what works in the real world.
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