From Publishers Weekly
Businesses collapse just as surely as people do, yet economics textbooks and financial reporters stubbornly concentrate on success rather than failure. Ormerod (Butterfly Economics) argues this outlook is fundamentally flawed; failure, he says, is "the distinguishing feature of corporate life," and he uses it to link economic models with models of biological evolution, which he presents as a string of extinctions rather than survival of the fittest. Despite this parallel, his focus is on economic theory and what he sees as its inadequate accounting of uncertainty (defined as the impossibility of knowing how policies or business strategies will work) and how it breeds failure. He writes about complex concepts such as power-law behavior, game theory and bounded rationality, but makes them accessible to the lay reader with lengthy but readable explanations that forsake jargon for contemporary cultural references. (Though people who are already familiar with the debates he brings up will doubtless get more out of the book) Yet for all his persuasive examples, the book never crystallizes into a whole, so while readers may find many parts provocative, they are likely to finish it still lacking a complete understanding of failure as Ormerod sees it.
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.
Economist Ormerod addresses "what is probably the most fundamental feature of both biological and human social and economic systems: failure. Species fail and become extinct, brands fail, companies fail, public policies fail." It is fortunate that everything does not fail at once. With an emphasis on reality and not theory, he offers three themes: a documentation of failure, the subtle patterns he finds in the apparent disorder of failure, and the causes of failure. Ormerod concludes that innovation is the guiding principle that companies use to try to overcome the uncertainty surrounding their decisions. Management responds with constant action, testing new ideas, new brands, and new products because they cannot know with absolute certainty why an individual brand fails, and almost all brands eventually fail. The focus on innovation, developing new strategies for individual survival, is also important for consumers and citizens. This is challenging reading and not recommended for the casual reader. Mary WhaleyCopyright © American Library Association. All rights reserved