Finweek English Edition - - OPINION -

Freek Ver­meulen, as­so­ci­ate pro­fes­sor at the Lon­don Busi­ness School, tells the story of some con­sult­ing work he did for The Guardian, one of Bri­tain’s old­est news­pa­pers. At the time, he as­sumed that the pub­lish­ers printed the news on large sheets of pa­per to save costs. But he was sur­prised to dis­cover that in fact the op­po­site is true – it’s slightly more ex­pen­sive to print on large broad­sheets than on the smaller tabloid for­mat. He ques­tioned the ex­ec­u­tives about this, and was met with the rather glib “be­cause that’s the way we’ve al­ways done it”. In other words, qual­ity news­pa­pers have al­ways been broad­sheet, and so there was no rea­son to change. “And any­way,” they con­tin­ued, “cus­tomers wouldn’t want it any other way.”

It turns out they were wrong about that. A year later, one of the large news­pa­per groups re­duced the size of the pa­per and saw a surge in cir­cu­la­tion num­bers. A num­ber of other news­pa­per groups fol­lowed soon there­after and had a sim­i­lar ex­pe­ri­ence. Even­tu­ally The Guardian changed too. This isn’t sur­pris­ing if you think about it. If you read the news­pa­per on the train dur­ing your morn­ing com­mute, then a smaller size is much more con­ve­nient to hold. Yet the news­pa­pers had never thought to ques­tion this age-old as­sump­tion.

Ver­meulen then de­cided to in­ves­ti­gate the ori­gins of the broad­sheet news­pa­per, and what he dis­cov­ered was truly as­tound­ing. In 1712, the Bri­tish gov­ern­ment in­tro­duced a ta x based on the num­ber of pages that the news­pa­pers printed. The ob­vi­ous re­ac­tion by the news­pa­per pub­lish­ers was to in­crease the size of the pages so that the same in­for­ma­tion would be spread across fewer pages, leader to a lower to­tal tax bill. That tax law was abol­ished in 1855. In the­ory, the news­pa­pers should have re­verted to the smaller-page eas­ier-toread for­mat. In re­al­ity, how­ever, none of them thought to change the way they had been do­ing busi­ness in the past. This mind­set then per­sisted for over 150 years with­out any­one ques­tion­ing ‘the way things are done around here’. Not un­like Granny Nina’s de­li­cious roast beef recipe.

Ver­meulen is now con­vinced that th­ese un­writ­ten rules and as­sump­tions can be found in ev­ery in­dus­try. He calls them “in­eff icient, out­dated in­dus­try habits which nev­er­the­less con­tinue to per­sist – things that every­body does and has al­ways been do­ing a cer­tain way and just con­tinue to do”. He ar­gues that in­dus­try progress is ham­pered by such man­age­ment myths, and that in­di­vid­ual f irms who f ig­ure out such man­age­ment myths and change t hem may ob­tain a sig­nif­i­cant com­pet­i­tive ad­van­tage as a re­sult. THE POWER OF ASK­ING WHY If you’re a par­ent of a young child, you’ll know that one of the most ir­ri­tat­ing things your kid can say is: “But why?” For ex­am­ple, you’ve just fin­ished pre­par­ing din­ner af­ter a hard day at work and you call for your kid to wash hands and sit down at the ta­ble. “But why must I wash my hands?” “So that your hands will be clean.” “But why must my hands

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