Business success is a fluke

Why case studies don’t work

Why case studies don’t work

The football coach José Mourinho was called «Great» in 2012. But since 2013, his career can hardly be called rewarding. Chelsea, Manchester United, and Tottenham Hotspur, one after another, have fired him because of the poor results. And the coach is not an athlete whose qualification fades away due to age. The coach’s primary working tool is the brain; experience is his asset.

These kinds of stories happen in business as well. Stephen Elop was in good standing with Microsoft. It was his idea to create cloud-based versions of the company’s programs. Probably, that was why he was sent to run Finnish Nokia when Microsoft acquired it. I’m sure you know how it ended. I’d venture to guess that the phone in your pocket has a different company name on the body. Was Elop a bad manager? It is hardly so, and rather, he couldn’t fit in this context. When Carly Fiorina took over Hewlett-Packard, she already had an impressive career under her belt. However, there are many articles on the web about what a terrible time it was for HP when she was CEO. Suffice it to say that the company’s stock was down 63% from 1999 to 2005.

What makes a successful company?

A company’s success depends on thousands of factors, both internal and external, and only few of them are in a CEO’s control. Moreover, a CEO hardly knows about most of them. Here are some examples:

· A “chemistry” among team members

· A supportive market environment

· Government’s decisions that, at least, don’t prevent top managers from doing their job

· The cultural environment helping a company sell its products and hire managers

· Competitors’ weaknesses

· Climate factors

· Etc.

It doesn’t mean that CEOs and their teams are nothing more than helpless observers. Moreover, a company will never be successful without an intelligent, experienced CEO and a good team. But we need to take into account that most factors influencing the company’s financial conditions are beyond their control. Even perfect people can’t sometimes save the situation. There are two proofs of that:

1. For every successful company, there are dozens of unsuccessful, and in many cases, they are led by intelligent and experienced managers. It would be an exaggeration to say that only incompetent fools bring businesses to bankruptcy

2. Even exceptionally successful managers have not only their ups but also their downs. Steve Job’s Next would have been an epic failure if Apple hadn’t bought it

Every business success is an extremely complicated and untraceable combination of hundreds of factors. If a company is prosperous right now it became possible in these particular conditions — with this team, in this country, in this market. This case can’t be replicated in other circumstances, so we can’t learn much from it. Some researchers and business consultants try to investigate business cases and find the secrets of success, but the only outcome this activity can bring is that it can make them famous. It doesn’t mean that reading success stories is totally useless — it is, at least, inspiring. But be careful and don’t try to repeat at home what successful guys did!

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