First time I read this book was in 2009 and I was very much impressed by its findings, particularly so because it seemed to be so thorougly researched. Then in 2013 I read another book called 'Thinking fast and Slow' by academic Daniel Kahneman, who actually criticizes author Jim Collins for asserting causality where there is none or very little (he does so in chapter 19 specifically). Collins' supposed identification of successful management styles or practices in the outperforming companies underestimates the importance luck or randomness played in the outperformance (according to Kahneman). Regarding both these Collins books the researched companies actually failed to outperform in the subsequent periods that were out of the research timeframes. Most notably of course Circuit City and Fannie Mae, both of which went bankrupt (how's that for superior business practices?). I've revisited the book after reading Kahneman and I would personally add to this point that Collins' research methodology is very much flawed as well. He basically reverts the proper scientific method of formulating a theory, making a prediction (hypothesis) based on this theory and then proceeding to test it in real life. Collins instead starts with collecting his observations (=outperforming companies), assumes causality which explains their outperformance and then basically makes up a lot of vague things (like the hedgehog-concept; really what is that?) which are supposed to explain it. Doing this his 'research' basically makes a mockery of the scientific method. I must admit I fell for it when I first read this book, but now I almost entirely reject its value as a usefull business book. The argument that it's not meant as a scientific book, that some have made, is totally ridiculous as well. Because if the value of this book doesn't reside in its supposed fact-finding or explanatory power then what remains? The scientific method happens to be the most useful in that effort and even in a popular non-fiction book its most important principles should be abided by. If you want to read a good business book read 'Business Adventures' by John Brooks instead, recently recommended by Bill Gates. It's a set of business essays that will show the reader much of the 'human element' inherent in business (as in life). Aforementioned Kahneman is recommended as well, although it's not a business book, but more a psychology book showing how human thinking is subject to flaws (one of which Collins is actually a victim of, or at least his readers are...).
