The book Good to Great by Jim Collins was one of the best-selling business books of all time – with more than 3 million copies sold it topped the Business Week best-seller list for years and was translated into 35 different languages. In case you missed it, the book chronicles the success of 11 “great” companies and Collins’ discovery of the “key determinants of greatness — why some companies make the leap and others don't.”
Readers flocked to this road map in hopes of taking their own companies to “sustained greatness.”
The only problem is, the road map turned out to be wrong.
If you followed the 11 companies into the future, none of them achieved sustained greatness. In fact, here is how the 11 fared just ten years later in 2010:
- Abbott Laboratories: Stock up 0%
- Circuit City: Bankrupt
- Fannie Mae: Placed in conservatorship
- Gillette: Bought by P&G
- Kimberly-Clark: Stock up 1%
- Kroger: Stock up 0%
- Nucor: Stock up 4-fold
- Philip Morris: Stock down 20%
- Pitney Bowes: Stock down 20%
- Walgreens: Stock up 0%
- Wells Fargo: Stock up 0%
What went wrong?
To put it bluntly, Collins’ research was flawed – it was pop-science with the emphasis on the pop rather than the science. To begin with, his study was not peer-reviewed, a process that frequently uncovers methodology flaws that any honest researcher may have overlooked and helps determine whether the results are reproducible. Collins never subjected his research to the scrutiny of his peers. The book also confused correlation with causality – the mere fact that these companies shared common traits does not mean those traits were the cause of their perceived success.
But data mining is the real methodology flaw here – it’s not uncommon for researchers to see patterns in data and postulate theory based on that insight. However, the data used to generate the theory cannot also be used to verify it. The next logical step in Collins’ research would have been to apply his principles to a new set of firms to see whether his observations truly predict future success. If so, then the theory would have been validated, and other researchers could test the theory themselves with their own data.
So, what does all of this have to do
with your estate planning or elder law practice?
We live in an information age. In fact, it’s often tempting to just ignore new information – just turn it off or shut it down because it is just too much, and seems meaningless. Honestly, a lot of it is meaningless. And yet, you know that good decisions depend on good information.
For example – if your business is up 30 percent this year, do you know why? If you know the reason why something occurs, you can explain and control it better in the future. Guessing wrong could mean lost opportunities, wasted investments of time and money, and perhaps even financial losses instead of gains.
Critial Thinking: Evidence-Based Management
To avoid this trap, I challenge you to employ evidence-based management and commit to becoming a learning organization.
Every month we track and report back to you vital information about your marketing performance. This is powerful evidence that can build competitive advantage for you and your law firm. Your competitors are not getting this type of quality information. Let them fall prey to every new “pop” management book or fad.
To learn more about evidence-based management, strategy and the data that really drive success, join us at the New Strategies Workshop in Kansas City, Sept. 24-26. In addition to the powerful strategy sessions, you'll also gain insight into the data tracking, analysis and reporting that is part of your Essential Solution® marketing ... and discover how to use this data to make better decisions, gain competitive advantage, and truly move your law firm toward sustained greatness!
Visit the workshop web page for all the details or to register online. But hurry, in order to ensure a quality experience for everyone, we are only accepting a total of ten firms at the workshop and seats are filling up fast!