When it comes to the explanations offered by popular business analysis, however, there is rarely such care. Companies with great track records are immediately lionized as great companies for all sorts of reasons, and the business press always has a favorite. For a decade or more, it was Southwest Airlines; today it's Apple's (AAPL) turn: there are any number of competing arguments that can attribute success to varying combinations and types of strategy, culture, leadership, and other elements.
All of these explanations make sense, but the right explanation needs to make sense of all the pertinent facts, and it needs to make sense of them better than the alternatives. This is a standard that Chandler's work rose to. But when it comes to today's business case studies, unfortunately, it is often left to the reader to determine what the competing explanations might be and to weigh the evidence.
Prediction: What happens next
When it comes to prediction, it gets worse. Most business books move from overstated claims of explanation to entirely unjustified predictions based on the notion that because something seems to have worked for them over there it will work for you over here. This belief is based on a flawed assumption that using ideas that worked out in the past will somehow allow you to shape the future in a desired way.
The only way to justify a prediction is to make one and see if it holds up under repeated tests. I don't know of any business book that has subjected its prescriptions to tests of predictive accuracy that bear even a distant relationship to the scientific method. (Well, I know of one. But I wrote it, so I'm not in a position to offer an opinion on its merits.)
The real world is a messy place, which can make controlled experiments impossible. But the inability to generate evidence of predictive accuracy does not allow us to change the rules of evidence. And it is dangerously misleading to treat fables as fact. Only when case studies are elaborations of a validated connection between cause and effect can they contribute to our ability to predict outcomes accurately.
Case studies can be useful in support of description, explanation or prediction, but in different ways and with different degrees of confidence. So the next time someone begins a sentence with "for example," think twice.
Michael Raynor is the author of The Innovator's Manifesto: Deliberate Disruption for Transformational Growth and is a director at Deloitte Consulting LLP. He lives just outside of Toronto.
