But what about Procter and Gamble?
Procter & Gamble is an interesting
example. Soap has been around for a long time and nobody is going to invest a very different soap anytime soon. And brand preferences are very stable. And compare it to one of these guys (showing his iPhone) where what you had five years ago is very different to what you have now. Again when Collins says 1834, Q.E.D., well yes, if you are Gillette razors, Nestle Chocolates or Kellogg’s cornflakes, those have very long lives. Nestle, they make certain chocolates that have been around here forever. Nobody is going to invent a very different chocolate tomorrow. By the way, they continuously adjust certain things. Next time you look at a bottle of Heineken, looks at what it says. Gold Medal Paris Fair 1902. What are they saying? They are saying, this is the same beer for more than a 100 years. This (waving the iPhone) is very different. Be very careful when people give examples from Procter & Gamble and take that to apply it to Dell or Hewellet Packard.
Now there are lot of good things that Collins writes. Who can be against having good values, caring about your people, caring about your customers? Who could ever argue about that? I prefer humility over arrogance. I mean, who could every argue against that? But fundamentally that’s not what he is saying. What he is saying that you do these things you will predictably be successful and that is a huge disservice. And then he writes this book How the Mighty Fall and there again it’s classic Collins. It is sample selection based on outcome. So I take a bunch of companies that fell and then I look back and say that you know what, they all suffered from hubris. Now hubris is a very interesting word. Hubris is always inferred retrospectively. In fact, almost by definition because what is hubris? If you go back to Greek mythology, hubris is excessive pride that is punished by the gods. When we start saying that you suffered from hubris, we always do it through the lens of retrospection and what he has not yet recognised is that valid research does not begin by selecting samples based on outcome and then gathering data through the lens of those outcomes.
So Collins basically makes management look like physics, which it is not?
It’s not E=MC2. Don’t say it’s physics.It is total nonsense. And that to me is a disservice. I will tell you a little story. I visited once a manager, an executive of a company in The Netherlands. So I went into this man’s office. The desk was very neat. Not a piece of paper in sight. On the bookshelf there were two books. There was the company phone book and there was Jim Collins’ Good to Great. I said that is interesting. So let’s do a little mental experiment, I told myself. Let us imagine that this is a guy who does not read business books except one. He reads Good to Great. What I hypothesised is that if he reads only Good to Great, he will be a little bit better off but a little bit worse off. I will tell you that he will be a little bit better off. Why? Because Good to Great says have focus, be humble, care about your people, listen to your customers. I would say that on the margin there is more good than bad. Of course, the other thing it does is that it says that there is formulaic predictability that I think is incorrect.
Tell us something about the EMBA programme of which you are the director?
There are of course many executive MBA programmes out there, but most of them operate on a very different model than ours. And the reason for that is that most of the other ones tend to be based in places like London, New York, Los Angeles, Singapore or Paris where there is a large population nearby. So most of those programmes are structured in a way where the executives will come, maybe for a long weekend, once a month for 18 months. When you see where our students come from, we can’t ask them to come to Switzerland for a long weekend, once a month. It is just too far for them to come. So we have taken a different model. We have divided our programme into two stages — the first stage is called the foundation stage and that is two times a year; five weeks’ residential in Switzerland. And then they come to the masters years — the EMBA year, which is the year I direct. The idea there is that we will come together four times a year and but the rest of the year is really handled on a distant basis. The central pillar is we have them do in-depth work applied to their own company. We have them do a strategy assignment, a marketing assignment, listen to customers, a finance assignment, an organisation assignment, how are they organised. Most of them are sponsored by their companies and these company-specific assignments are very good ways to learn more about the company and make recommendations for the benefit of the company. And many of the students come away and say this has been hugely beneficial for my company and it has also been beneficial for me because I normally don’t work in finance or with customer or with strategy. But the assignment has given me exposure to those issues and given me exposure to the senior managers.
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