Finweek English Edition - - MANAGEMENT -

Find mul­ti­ple ex­am­ples of or­gan­i­sa­tions that have coped with sim­i­lar chal­lenges suc­cess­fully. Re­verse-en­gi­neer the rea­sons for their suc­cess, look­ing for fea­tures that they share in com­mon. Present these shared ‘suc­cess fac­tors’ as pre­cepts, rules and prin­ci­ples that should be im­ple­mented by all those who wish to achieve sim­i­lar lev­els of suc­cess. This ap­proach sounds great, and the growth of the con­sul­tan­cies push­ing it can­not be gain­said. But it sim­ply doesn’t work. It ’s easy to de­scribe the engi­neer­ing ap­proach, but not to put it into prac­tice.

Start by con­sid­er­ing an ex­treme and highly vis­i­ble case. At the out­set of the Iraq War, US Pres­i­dent Ge­orge W Bush ex­pressed the hope that Iraq would be­come a fed­eral democ­racy and a bea­con to all the to­tal­i­tar­ian states in the Mid­dle East. The US then set about cre­at­ing fac­sim­i­les of var­i­ous Amer­i­can in­sti­tu­tions in Iraq – sim­u­lat­ing the struc­tures that were crit­i­cal to the suc­cess of its own democ­racy. But if these were nec­es­sary con­di­tions, then clearly they were not suf­fi­cient. What Iraq has to­day is far from a vi­able demo­cratic sys­tem.

Sim­i­larly, in the man­age­ment world, we con­stantly see the engi­neer­ing ap­proach be­ing im­posed on com­pa­nies and fall­ing short. For ex­am­ple, W Chan Kim and Renée Mauborgne, the au­thors of Blue Ocean Strat­egy, ex­am­ined the emer­gence of out­ra­geously suc­cess­ful com­pa­nies like Cirque du Soleil and de­clared that they had dis­cov­ered the keys to their suc­cesses. Though Kim and Mauborgne never claimed that the or­gan­i­sa­tions where they had stud­ied had con­sciously im­ple­mented the ‘ blue ocean’ prin­ci­ples, they did ar­gue that it was ‘as if ’ they had. How else could they have moved their busi­nesses into such em­i­nent po­si­tions?

Un­for­tu­nately, this ap­proach has done no more for cor­po­rate strate­gic suc­cess than it has for na­tion-states. Man­agers are pre­sented with in­spir­ing sto­ries from the past that they quickly dis­cover can­not be repli­cated, and with ab­stract prin­ci­ples that sound in­con­tro­vert­ible yet can­not be im­ple­mented. They might, at best, pro­duce fac­sim­i­les of cer­tain fea­tures of great or­gan­i­sa­tions, or learn to say all the right words about what it will take to suc­ceed. But while they can talk the talk, their or­gan­i­sa­tions can’t walk the walk.

The fun­da­men­tal prob­lem with the engi­neer­ing ap­proach is that sim­ple me­chan­ics do not drive out­comes in com­plex sys­tems, where causes and ef­fects are con­stantly sub­ject to dy­namic adap­ta­tion. The con­di­tions in one or­gan­i­sa­tion – or

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