Psychology Melbourne Blog

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Business philosophies and utter confusion

Something deep in my nature never fails to be amused by the profound bewilderment caused by well-meaning theorists seeking to apply decidedly Eastern philosophies to business, and for that matter personal life.

Take the idea of "active waiting" that according to The Economist, is one of the hottest management theories around.

In order to embrace that philosophy, the management mind apparently has to understand the difference between active waiting [good], and "active inertia" [bad].

According to Donald Sull, an associate professor at London Business School, the usual response to disruptive changes is to do more of the same old stuff, only faster, and presumably, with more desperation. That is active inertia.

Sull uses the example of the futile activities engaged in by the Firestone tyre company when Michelin introduced radial tyres: upping the output from existing equipment and old factories, thus increasing the depth of the hole into which Firestone was sinking.

Sull researched more than 20 pairs of operators in unpredictable markets, and found that the more successful of each pair busied themselves instead preparing for future action without prematurely locking themselves into a specific response.

It brings to mind one of the sayings of one Indian guru that I recall reading many years ago: "Don't just do something. Sit there!"

But I can't imagine it can be at all easy to adopt such a strategy and, as Sull puts it "articulate a fuzzy vision [which] provides a general direction and sets aspirations without prematurely locking the company into a specific course of action".

On the whole, I'm not sure if I were ever charged with leading an enterprise through the quicksands of disruptive change that I wouldn't be more inclined to follow some of the recipes he outlined in 2009, in the Financial Times.

On the other hand, I don't know if two of the examples he used there of successful responses - Nokia and Cisco - appear all that clever, four years down the track. That's quite ironic, when you read Sull's FAQ on the topic, in which he lists one of the signs of a company in danger of active inertia as "Management gurus praise your company".

He goes on to say that "Few companies survive guru praise for long. Consider the fall of most In Search of Excellence firms. The problem is not sloppy research. Rather guru praise reinforces confidence in the success formula. And he notes that the London Business School, which is where he works, "has no gurus, just hard-working professors toiling in the vineyards of research".

It gets even more amusing, however, when, as Oliver Burkeman seeks to do in his column in The Guardian, one attempts to apply that sort of philosophy to private life.

Burkeman muses that Sull's approach may be "a rare case in which business school insights are truly useful outside business", and suggests that in order to find happiness, we have to stop thinking that any successful tactic we adopt will survive "the self-sabotaging part of your brain".

It's only when you read the comments, that you understand how completely bemused the average reader is by this sort of thing.

Never mind. On his website, Professor Sull has a string of other strategies that are bound to provide endless fun for amateur business psychologists. There's "agile absorption", for instance, which is definitely something I would like to acquire.