BOOK - How to
Break Bad Business Habits
Freek Vermeulen of the London Business School offers contrarian
nuggets for innovation-hungry leaders. ”
Breaking Bad Habits: Defy Industry Norms and Reinvigorate Your
Business by Freek Vermeulen, Harvard Business Review Press, 2017
Back in the day, reading the newspaper on my
morning commute to Manhattan was an origami-like exercise in folding and
refolding. I never wondered why newspapers were printed on broadsheets that
were too big for the bus. But Freek Vermeulen did. The clumsily sized standard
for newspapers of record peeved him.
It took the associate professor of strategy
and entrepreneurship at the London Business School years to ascertain that the
widely used broadsheet dated back to 1712. That’s when the English government
began taxing newspaper owners by the number of pages they printed. Bigger pages
meant fewer pages and thus less tax. The tax was eventually abolished, but the
broadsheet remained the standard — even though the cost of the paper was high
and its unwieldy handling irritated readers such as Vermeulen.
In
2003, an English newspaper bucked the long-established standard. The
struggling Independent ran an experiment. It offered its paper
in broadsheet and in a format exactly half that size in one market. The smaller
paper outsold the larger by three to one. The Independent’s leaders
quickly adopted the half-size version nationwide, and the paper’s print
circulation rose 20 percent annually for several years.
The
lesson, says Vermeulen, and the worthy theme of his new book, Breaking
Bad Habits: “Killing bad practices can open up new
avenues of growth and innovation and reinvigorate your business.”
Vermeulen,
who has written
for strategy+business,
devotes the first third of the book to admiring the problem of bad practices.
He points to the many failed total quality management implementations in the
1980s and 1990s as an example of how leaders try to replicate the successful
practices of other companies, but muck it up through oversimplification. He
blames the organizational tendency to assume there is a good reason for
established practices for perpetuating the bad ones, à la broadsheet
newspapers. He calls out the perception biases and casual ambiguities that can
blind leaders to the negative, long-term consequences of the practices they
adopt. As an example, Vermeulen cites the continuing adherence of many
companies to ISO 9000 quality assurance standards, even in the face of studies
that show they have a stifling effect on breakthrough innovation and agility.
In the second third of the book, Vermeulen
explores the silver lining in this cloud of bad corporate practices. Here, he
offers two chapter-length cases of successful businesses: Netherlands-based
citizenM, a hotel chain founded in 2008 that cut construction and staffing
costs by 40 percent each and boasts 95-plus percent occupancy rates, and
U.K.-based consultancy Eden McCallum, which has built a client list of more
than 300 corporations since 2000. But, as the author describes it, citizenM
carved out a market space for itself by creating a hotel that caters
specifically to young, frequent business travelers, and Eden McCallum cut its
costs by hiring freelance consultants instead of full-time employees. Precisely
what “bad” practices the companies eliminated are unclear.
Although
the two cases may be a bit of a stretch, they do lead to the best part of Breaking
Bad Habits: Vermeulen’s “Ten Commandments” for identifying and eliminating
bad practices. These include replacing your company’s benchmarking efforts with
“reverse benchmarking” — that is, looking at established practices in your
industry and asking what might happen if you stopped practicing them — which is
what Herb Kelleher and Southwest Airlines famously did when the airline
eliminated the de rigueur airline meals. It turned out few travelers actually
wanted them. Another of Vermeulen’s commandments is to pay close attention to
the new companies and the distressed companies in your industry. They’re likely
to be questioning established practices and thus may lead you to an opportunity
for innovation. It’s not a coincidence that The Times(of London)
downsized its paper after the Independent’s experiment proved
out.
In the
final third of Breaking Bad Habits, Vermeulen roughly stitches
together his advice for stimulating organizational innovation, though the
connection of this advice to bad practices is tenuous at best. He reprises
the 2010 Harvard
Business Review article in which he and his coauthors
made a strong case for creating organizational change whether there’s an
explicit need for it or not, because corporate success is a quest without end.
He argues in favor of doing hard things, because challenging tasks yield
valuable organizational learning. And he advises leaders to cast their
innovation nets as widely as they can to collect ideas, but to be highly
selective in choosing which ideas to pursue and fund.
In
all, Breaking Bad Habits isn’t the most coherently argued
book. But it does contain nuggets of insight and advice that are well worth
mining.
https://www.strategy-business.com/article/How-to-Break-Bad-Business-Habits
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