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Dear Business Managers and CEOs: I am here to help you. You might not like what I say because most of you have never taken a proper course on how to do research and how to analyze the results of research. If you knew better, then you would not be buying this book. If you doubt what I am saying, pick up a copy of the following journal article: Selection Bias and the Perils of Benchmarking. By: Denrell, Jerker. Harvard Business Review, Apr2005, Vol. 83 Issue 4, pp. 114-119 It starts off like this: MANAGERS LEARN BY EXAMPLE. They--and the consultants they pay for advice--study the methods and tactics of successful companies in search of the magic formulas for business prosperity. What could make more sense? What could be more dangerous. Looking at successful firms can be remarkably misleading. I once listened to a presentation about the attributes of top entrepreneurs. Drawing on a wealth of impressive case studies, the speaker concluded that all of these leaders shared two key traits, which accounted for their success: They persisted, often despite initial failures, and they were able to persuade others to join them. That sounded reasonable enough to most people in the audience. The only trouble was, the speaker failed to point out that these selfsame traits are necessarily the hallmark of spectacularly unsuccessful entrepreneurs. Think about it: Incurring large losses requires both persistence in the face of failure and the ability to persuade others to pour their money down the drain. Here's the problem about learning by good example: Anyone who tries to make generalizations about business success by studying existing companies or managers falls into the classic statistical trap of selection bias- that is, of relying on samples that are not representative of the whole population they're studying. So if business researchers study only successful companies, any relationships they infer between management practice and success will be necessarily misleading. The theoretically correct way to discover what makes a business successful is to look at both thriving and floundering companies. Then business researchers will correctly identify the qualities that separate the successes from the failures. Researchers might conclude- as many have--that the strength of a company's culture is associated with success because many successful companies have strong cultures. But if they were to study bankrupt companies as well, they might find that many of those also had strong cultures. They might then be moved to hypothesize that the nature of a company's culture is at least as important as its intensity and then look more deeply into the whole issue of culture. Similarly, if we want to examine effective leadership traits, we cannot look only at excellent managers. We must also consider managers who failed to be promoted, were demoted, or were fired. Perhaps their styles of leadership were equally visionary- or humble. Without looking, we cannot tell. Denrell continues . . . Cautionary words and counsels of failure, I know, are seldom well received. Managers crave certainties and role models from business literature, and to some extent they have to. They live in a fast-paced world, and they often cannot afford to postpone action until they get better data. But there really is no excuse for ignoring the glaring traps we've described in these pages. Success may be more inspirational, but the inescapable logic of statistics dictates that managers in pursuit of high performance are more likely to attain their goal if they give the stories of their competitors' failures as full a hearing as they currently do the stories of their successes. So, buy this book at your own risk. In fact, I hope you realize that it is better not to buy it.