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Monday, May 11, 2009

Review of Why Smart Companies Do Dumb Things

This post is the initial draft of a review that will be published in shortly in Personnel Psychology. The editted review will appear on pages 250 through 252 of Vol. 62, No. 1, Spring, 2009.

The object of the review is:

Hodock, Calvin L. Why Smart Companies Do Dumb Things: Avoiding Eight Common Mistakes in New Product Development. Amherst, New York: Prometheus Books, 2007, 357, $25.95, Hardcover.


Review

This books sits on the shelf with the many others of it’s genre, including The Innovator’s Dilemma (Christensen, 2003), Good to Great (Collins, 2001), and Blink (Gladwell, 2005), all of which seek to explain what’s wrong with American business and how to fix it, and doing so in about 300 pages of large font, lots of leading, and little substantive evidence. I’ve long thought that The Zombie Survival Guide (Brooks, 2003) contained more metaphor for professional development and business success than all the aforementioned books put together, the difference being the task of having to interpret the metaphor of the one and staying awake in the others while slogging through the endless elaboration of an already sufficient opening sentence such as “Good is the enemy of great” (Collins, 2001).

Nonetheless, this book makes an interesting read over a couple of afternoons at the beach. (Yes, I was able to put it down.) What held my attention the most was not so much the topic, but rather, the stroll through the garden of marketing success and failures, each framed by the author’s hypotheses gleaned through his work as a professor and business consultant. It was a source of fascination to me to see the history of successful products and their evolution, especially in the context of concurrent failed knock-offs and original developments that, while consuming the GNP of a small oil producing nation, resulted in career changes for those involved and the reduced tax liability, if not bankruptcy, of the sponsor.

To this end, Hodock provides a thoughtful review of the American market of the past three decades. Although I doubt he will be credited with the recreation of American enterprise, he does give a worthwhile history lesson regarding the foibles of product development and marketing. However, if even a few suits in positions of authority spend a cross-country flight reading this book and bring the learning to their work, there will be some happy investors out there. The challenge of those few will be to penetrate the miasma inherent in the leadership required to set the stage for a successful enterprise (McCauley & van Velsor, 2004).

The author organizes this book using what he has identified as the eight common mistakes associated with failed innovation. These are (1) marketing misjudgment, (2) position poisoning, (3) dead-on-arrival product, (4) competitive delusion, (5) defective marketing research, (6) fatality in frugality, (7) timetable tyranny, and (8) marketing dishonesty. A single chapter provides the opening framework for the eight chapters to follow, each of which focuses on a common mistake. Many examples are included in each, and some of the examples are threaded through the chapters. It was the examples of success and failures that intrigued me the most. The final four chapters provide a summary and suggestions for how to avoid the listed mistakes.

Although I found myself generally concurring with the conclusions of the author, my concurrence was more likely the result of the author’s presentation of material than it was any of any empirical or qualitative reasoning. Strong empirical evidence is sparse in this arena, and it is unlikely that any experimental framework could ever be applied to validate the author’s hypotheses. Instead, what we have is the author taking over twenty years of experience, applying the gleanings to business publications selected over nearly thirty years, and building a qualitative case to support his platform of eight planks that he feels should guide product development and marketing. With all that said, it is usually wise to listen to, and perhaps to learn from, someone like Hodock who has been there and done that.

I found in my reflections after reading this text two points that stood out above the others. Perhaps I stuck on these two points because of my personal experiences in academe, non-profit, and for-profit work. Perhaps these are the primary two points made in the text. I’ll likely never know, but other readers will agree, or more likely, find their own learning.

First, I was struck by the frequency with which companies engage a fallacious and pell-mell rush to a non-existent market with a faulty product. Were we able to tap even a fraction of the resources consumed in these bankrupting efforts, we could have reliable alternative energy sources and the distribution thereof early next week. Moreover, one does not have to look far to find new and creative examples of these fruitless and expensive endeavors. Use Google to search for business opportunities in China. At the time of this writing, such a search produced 7,410,000 hits. The apparent potential for business profit in China is seemingly endless, and it doesn’t take long to make the illusory case for untold riches in that delightful country. However, if you dig further into those 7.4 million hits, you’ll quickly discover that for every one foreign organization that found success in China, seeming countless others failed, and did so with alarming consequences for the mislead investors who bought into the pipedream of sudden and unending riches. Frankly, the ROI on the lottery is likely greater than the composite returns of such enterprises.

The second theme that stuck with me was the on-going misunderstanding of creativity, especially in American business, and this misunderstanding is not restricted to the corporate boardroom. Academe abounds with examples, such as the researcher who appears at the statistician’s office to get some creative statistical assistance to answer a question after the survey is complete, or the new course offering that seems so logical yet attracts so few students. I cannot count the number of afternoons that I have been called to an ad hoc gathering of management to provide creative insight into the solution of a thorny problem and to do so by the COB, all the while completing the other tasks already scheduled for the day.

Creativity doesn’t work that way unless Serendipity is having a very good day, and this point is clearly made in every book that shares the shelf with this one. Creativity doesn’t work 9-to-5, and it certainly doesn’t turn on like the office lights in the morning. Creativity comes in like the fog on little cat’s feet, as Sandburg described, or it leaps unsuspected from a dream, a shower, a walk around the block, or a double espresso. Without a dream and a glass of wine by a cold evening’s fire, we would be lacking the lucrative commercial enterprise based on DNA research. Creativity is slowly nurtured and developed, and the people involved in creative pursuits are not often overly attendant to matters of dress codes and work schedules. Many corporate endeavors make a big deal regarding their creative solutions, but very few that I have noticed do more than sponsor the development of a little glitz for old product. (My grandfather would mutter something about lipstick and pigs about now.)


References


Brooks, M. (2003). The Zombie Survival Guide. New York: Three Rivers Press.

Christensen, C. M. (2003). The Innovator's Dilemma: The Revolutionary Book that Will Change the Way You Do Business. New York: Harper Collins.

Collins, J. (2001). Good to Great: Why Some Companies Make the Leap... and Others Don't. New York: Harper Collins.

Gladwell, M. (2005). Blink: The Power of Thinking without Thinking. New York: Little, Brown and Company.

McCauley, C. D. & van Velsor, E. (2004). The Center for Creative Leadership Handbook of Leadership Development. San Francisco: Jossey-Bass.

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