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Thursday, July 31, 2008

From Good To Great ... To Below Average

There is an interesting post on the Freakonomics blog titled From Good to Great … to Below Average. The post talks about how many of the companies profiled in the book are not all that spectacular today.

Ironically, I began reading the book on the very same day that one of the eleven “good to great” companies, Fannie Mae, made the headlines of the business pages. It looks like Fannie Mae is going to need to be bailed out by the federal government. If you had bought Fannie Mae stock around the time Good to Great was published, you would have lost over 80 percent of your initial investment.

And at the end:

What does this all mean? In one sense, not much.

These business books are mostly backward-looking: what have companies done that has made them successful? The future is always hard to predict, and understanding the past is valuable; on the other hand, the implicit message of these business books is that the principles that these companies use not only have made them good in the past, but position them for continued success.

Read the whole post here.

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