Case

HARVARD BUSINESS REVIEW

Managers often make significant business decisions based on little more than convincing book jacket blurbs. They should hold themselves-and the experts-to a higher standard.

Why Hard-Nosed Executives Should Care About

feeling well. Before you've had a chance to describe your symptoms, the doctor writes out a prescription and says,"Take two of these three times a day, and call me next week." "But -1 haven't told you what's wrong," you say." How do I know this will help me?" "Why wouldn't it?" says the doctor. "It worked for my last two patients." No competent doctors would ever practice medicine like this, nor would any sane patient accept it if they did. Yet professors and consultants routinely prescribe such generic advice, and managers routinely accept such therapy, in the naive belief that if a particular course of action helped other companies to succeed, it ought to help theirs, too. Consider telecommunications equipment provider Lucent Technologies. In the late 1990s, the company's three operating divisions were reorganized into 11 "hot businesses." The idea was that each business would be run largely independently, as if it were an internal entrepreneurial start-up. Senior executives proclaimed that this approach would vault the company to the next level of growth and profitability by pushing decision making down the hierarchy and closer to the marketplace, thereby enabling faster, better-focused innovation. Their belief was very much in fashion; decentralization and autonomy

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MAGINE GOING TO YOUR DOCTOR because you're not

Management Theory by Clayton M.Christensen and Michael E. Raynor

SEPTEMBER 2003

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Why Executives Should Care About Management Theory

appeared to have helped other large companies. And the start-ups that seemed to be doing so well at the time were all small, autonomous, and close to their markets. Surely what was good for them would be good for Lucent. It turned out that it wasn't.