Adaptation Fail

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In 1982, the management consultants Tom Peters and Robert Waterman published In Search of Excellence, a colossally popular business title. The book aimed to learn lessons from the world’s best companies, and Peters and Waterman produced a list of 43. But just a couple of years after In Search of Excellence had been published, BusinessWeek ran a cover story with the simple title: "Oops! Who’s Excellent Now?" Almost a third of the companies singled out for praise by Peters and Waterman were in financial trouble.

My aim isn’t to mock Peters and Waterman, but to point out that the rise and fall of business models is an unavoidable part of economic growth. In a complex world, things fail - a lot. According to the economist Paul Ormerod, 10 percent of U.S. firms go bankrupt every year. Ormerod - an iconoclastic figure who enjoys beating fellow economists at their own game, mathematics - has studied the statistical patterns that emerge from these bankruptcies. He thinks they suggest that failure and success in business are far more random than our culture of CEO-worship would have us believe.

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Posted: May 13th, 2011
at 9:24pm by mnp

Categories: business,weaponry,development,entrepreneurship,fail,innovation

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