I continue to be intrigued by the fact that almost half of the roughly twenty-five companies that passed the rigorous tests to be listed in the once famous book by Tom Peters and Robert Waterman,
In Search of Excellence, today either no longer exist, are in bankruptcy or have performed poorly. What happened in the 25 years since the book was published? My theory is that once an organization becomes quite successful it becomes adverse to risk taking.
Taking risks, albeit calculated risks, is essential for organizations to change and be innovative.
Scott Thurm, a journalist for
The Wall Street Journal, recently wrote in the Journal's
In The Lead column that classic managerial methods of past decades, such as total quality management, are now giving way to a trend of management by data. However, Thurm cautions that extensively analyzing historical data is not sufficient without complementing descriptive data with predictive information. He refers to the absence of reliable foresight and explains “why companies seem invulnerable one minute and aimless the next.”
Thurm has recognized an important competence that will be key to an organization’s performance: a combination of forecasting and risk management.
