Every once in awhile, my second favorite publication, Harvard Business Review, serves up some fascinating content that leaves me scratching my head and wondering. The April, 2009 issue doesn’t disappoint, offering a couple of interesting but potentially pointless studies in the Forethought section.

One asks: “Are Great Companies Just Lucky?” and the other serves up, “Employee Happiness Isn’t Enough to Satisfy Customers.”

Both articles offer up some interesting premises and are backed by well-pedigreed professionals that seem to have conducted a fair amount of research to conclude that luck is important and employee happiness is not the silver bullet of customer satisfaction.

My reactions range from, “OK, and the point is…?” to “Huh?”

Let’s tackle the article on corporate luck first. The premise is that the “great” companies singled out in studies like In Search of Excellence and Good to Great are actually not great, but lucky.

The authors suggest that “a firm is remarkable only when its performance is so unlikely that systemic variation (random nature) alone cannot account for its results.” They describe an example of students in a class flipping coins, with those that draw tails sitting down while those drawing heads remain standing. At the end of seven rounds, the sole remaining student is declared “great” for having flipped and drawn heads seven times in a row. In reality of course, he was lucky, not great and it’s unlikely that anything that he did resulted in his favorable outcome.

The authors describe their research methodology which ultimately evaluates “287 allegedly high-performing companies in 13 major success studies.” Their final conclusion: only one in four of those companies was actually remarkable. “The rest were indistinguishable from mediocre firms catching lucky breaks.”

Art’s Comments:

Maybe the authors are giving Jim Collins a little heartburn with this article, however, it’s an awful lot of razzle dazzle to go through to tell us that we should not take success stories literally and attempt to apply them verbatim to our own work environments. And I don’t know about you, but somehow the notion that these researchers quantified “luck” and were able to ascribe accomplishments to “lucky breaks” is making my head hurt just a little bit.

And You Define “Employee Happiness” How?

The second study focuses on establishing or disproving a correlation between happy employees and customer satisfaction. The authors highlight their own survey results that “failed to confirm that service businesses with more-contented staff also have more satisfied customers.” Interestingly, at two firms, they highlight finding a negative correlation. “We observed that factors that increased customer satisfaction decreased employee happiness.” Huh?

Art’s Comments:

Aside from the “Huh?” above, between the study on “luck” and this one, I find myself wondering whether it was a tough news month at HBR. Both stories make me rather irreverently suggest that everyone that conducts these studies should spend a few decades actually working in corporations before they are allowed to study them.

We don’t have the benefit of seeing the questions in the latter article, but it doesn’t’ take too much of a leap to imagine that if “employee happiness” was improperly defined it would be fairly easy to connect doing more work to a reduction in the “happiness” quotient. Also, the reliance on companies that have earned “Best Places to Work” awards and then showcasing their lousy results, shows a profound naivete about the veracity of those workplace surveys. They are typically crap put together by groups in pursuit of p.r. accolades.

For the sake of my own study in over two decades of leading, when employee happiness includes being treated with respect, supported for development, receiving honest, timely feedback and being given challenging assignments, then I guarantee that there is a positive correlation with customer satisfaction.

The Bottom-Line for Now.

I usually look to HBR for sage guidance and provocative insights. These articles feel a bit like tabloid journalism backed with pointless research and ending in useless conclusions. Let’s hope next month’s issue is back on track.

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