Is it possible to flawlessly execute a crappy idea and get good results? Not likely. Roger Martin has written an incredibly thought-provoking book on the models that most businesspeople use. Here’s how he sets it up:
“When executives find that a given framework, general practice, theory, or way of thinking—what I will call a “model” for short—doesn’t lead to the desired outcome, they almost automatically assume that the model in question wasn’t applied rigorously enough. The prescription, therefore, is to apply the model again, more vigorously. And when that produces the same unsatisfactory result, the prescription is to try even harder.
“…human beings don’t consciously make a choice of whether to model; “it is only a question of which model.”
Business education teaches many models: 4Ps, Five Forces, CAPM, EOQ, Black Scholes, GAAP, WACC, on and on. When these models don’t produce desired results, we rarely challenge the model, but rather that we incorrectly applied it. It’s socially risky to question an established model. Try it. I have with hourly billing, tracking time, cost accounting, GAAP, auditor independence. Not a route to popularity. But sometimes the model is not up to the task. Martin points out that market data is not relevant for breakthrough innovations. He quotes American pragmatist philosopher Charles Sanders Peirce (pronounced purse, I believe) “observation that no new idea in the history of the world has been proven in advance analytically, which means that if you insist on rigorous proof of the merits of an idea during its development, you will kill it if it is truly a breakthrough idea, because there will be no proof of its breakthrough characteristics in advance. A better model is one that has you assess them on the strength of their logic—the theory of why the idea is a good one—not on the strength of the existing data.” Martin covers 14 models that he believes are flawed and posits better ones he thinks are superior, based on his experience, consulting work, and collective wisdom. I concur with his approach:
"I come from the Karl Popper/Imre Lakatos school of falsificationism. Like them, I don’t believe there are right answers or wrong answers, just better ones and worse ones."
His hero is Peter Drucker and his goal is to make executives more effective (not more efficient). As he writes in the Afterword: Frequent saying: “A mediocre idea well executed is superior to a great idea poorly executed.” How would they know that an idea was “great” if it was “poorly executed”? You could well imagine how you would know if you had “a mediocre idea that was well executed.” The results would be as expected and would be mediocre. But it’s an important principle to ensure action orientation one executive assured him? “Unfortunately, it didn’t occur to her that the principle would guarantee an action orientation focused on mediocre ideas.”
I will only explain one model’s improvement, it is on strategy: In strategy, what counts is what would have to be true—not what is true. This is a fantastic book, well worth reading.