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Freek Vermeulen

Breaking Bad Habits: Defy Industry Norms and Reinvigorate Your Business Hardcover – November 14, 2017

by Freek Vermeulen (Author)

4.1 53 ratings

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Could some "best practices" be…bad?

Have you ever wondered why most newspapers are so large? Or why management consultants work such long hours? Or why hotels still insist on having check-in desks? Ask anyone in these industries, and their answer will be the same: "That’s the way we’ve always done it."

"Best practices" may be widespread, but that doesn't mean they're effective. In many instances the opposite is true: best practices can be outdated, harmful, and a hindrance to innovation. These bad practices are all too common in organizations, and managers and executives can be blind to their pernicious effects. Since they've worked in the past, or have been adopted with success by other firms, their purpose or effectiveness is rarely questioned. As a consequence, these practices spread and persist.

In Breaking Bad Habits, Freek Vermeulen, a strategist with a keen eye for the absurd, offers the tools to identify these practices and rid them from your organization. And, most of all, he presents a compelling case for how eliminating popular but outworn ideas, processes, and strategies can create new opportunities for innovation and growth.

Brimming with examples of norm-defying organizations in an eclectic range of industries--including IVF clinics, hotels, newspapers, and a famous London theater--Breaking Bad Habits will make you rethink your long-held beliefs about industry norms while encouraging you to reinvigorate your business by breaking out of the status quo.

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Print length

272 pages
Language

English
Publisher

Harvard Business Review Press
Publication date

November 14, 2017
Dimensions

5.5 x 0.75 x 8.5 inches
ISBN-10

9781633693821
ISBN-13

978-1633693821
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Editorial Reviews

Review

"Founders, executives, and managers alike would all benefit to take a deep dive into this book." -- The Huffington Post

Advance Praise for Breaking Bad Habits:

Morten Hansen, professor, University of California, Berkeley; author, Great by Choice and Collaboration--
"In this expertly researched and engaging book, Freek Vermeulen uncovers one of the greatest sins of managers: best practices. Vermeulen offers an antidote to outmoded practices and the tools to replace them with more innovative alternatives. An important book for any manager seeking to do better."

Ranjay Gulati, Jaime and Josefina Chua Tiampo Professor of Business Administration, Harvard Business School--
"With fascinating stories grounded in captivating research, Freek Vermeulen makes a powerful case about how important it is to break away from old habits if you want to open new avenues of growth and innovation."

Dame Mary Marsh, Chair, Board of Trustees, Royal College of Pediatrics and Child Health, London--
"Breaking Bad Habits is full of sharp examples and insights that challenge our common beliefs. It is a wake-up call for all of us to adopt change as a key capability, test our limits, and break boundaries."

Frank van Oers, Managing Partner, Vorwerk & Co. KG; Chairman, Supervisory Board, Wessanen NV--
"A must-read for leaders, especially the ones who are successful and do not yet see the urgency for change."

Laurence Capron, Professor of Strategy and the Paul Desmarais Chaired Professor of Partnership and Active Ownership, INSEAD; coauthor, Build, Borrow, or Buy--
"In Breaking Bad Habits, Freek Vermeulen shows how best practices can eventually harm our industries and our societies while also offering a witty perspective on how to move beyond them. This book is especially helpful for leaders who are striving to innovate while trying to overcome organizational inertia."

About the Author

Freek Vermeulen is Professor of Strategy and Entrepreneurship at the London Business School. He is the first-ever winner of the school's Excellence in Teaching Award and has received various international prizes for his research on strategic management. He writes regularly for Harvard Business Review, the Financial Times, Forbes, and the Wall Street Journal, among others. In the past, the Financial Times has described him as a "rising star" and a "new management guru."

Author social media/website info: twitter.com/Freek_Vermeulen, freekvermeulen.com/

Product details

ASIN ‏ : ‎ 1633693821
Publisher ‏ : ‎ Harvard Business Review Press (November 14, 2017)
Language ‏ : ‎ English
Hardcover ‏ : ‎ 272 pages
ISBN-10 ‏ : ‎ 9781633693821
ISBN-13 ‏ : ‎ 978-1633693821
Item Weight ‏ : ‎ 14.1 ounces
Dimensions ‏ : ‎ 5.5 x 0.75 x 8.5 inches

Best Sellers Rank: #966,744 in Books (See Top 100 in Books)
- #570 in Strategy & Competition
- #1,617 in Business Decision Making
- #8,345 in Business Management (Books)

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4.1 53 ratings

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Fun and insightful read

Reviewed in the United States on November 24, 2017

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Great book -- crisp, witty writing and lots of insights about how to rethink your business. There aren't too many business school professors who can write this engagingly. Vermeulen has a knack for using fun stories to convey insights from rigorous research.

Rick Yvanovich FCMA CGMA FCPA MSc CCMP CMC

Watch out- - that industry bad practice may be a bad one

Reviewed in the United States on February 4, 2018

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Go with the flow, follow the crowd, its how we do things around here, industry best practices ... all mantras one hears on a regular basis.

The authors debunk all these and show how for many, the industry best practices are actually bad practices rather than good ones.

Innovation, the willingness to change and although it was not mentioned challenging the "why" we are doing what we are doing (or rather pointing out there is no why) are the concepts the authors bring to the fore.

Tie this book in with Simon Sineks Start with Why and the puzzle rapidly falls into place.

One person found this helpful

Reviewed in the United States on August 14, 2021

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Definitely what I need for my work.

Inspiration for change

Reviewed in the United States on June 27, 2019

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Food for though. Well formulated with good examples. Vermeulen nails it.

Reviewed in the United States on June 16, 2018

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Awesome book and excellent condition. Thank you

Bad habits and Kuru for business

Reviewed in the United States on January 11, 2018

Breaking bad habits follows on from Freek Vermeulen’s “Business exposed”. A book with an interesting take on popular management theories and practices. Most of them do not work. Management fads spread like wildfire or like a virus but are not based on any merits.

Simplicity Sells

Think about it. It makes sense. Simplicity sells and if we could only apply hard and fast rules to get a resolution. It does not work like that. We all underestimate the complexity of an organisation and how every organisation is unique. Culture, people, management team, location, product, purpose, resources, talent, etc., etc. There are a lot of factors at play. Just because TQM or ISO works for one business, does not mean it will work for you.

Breaking bad habits

In “Breaking Bad Habits: Defy Industry Norms and Reinvigorate Your Business” he expands on that thinking. Not that dissimilar to “Black Box Thinking”. You should test your assumptions, preferably with randomised control trials, to see if something really works or you just think it works.

Your business is unique

If you survived so far, you are doing something right. You already have developed your own best practice. You should apply some of the thinking from “Principles” and figure out why they are working. Codifying the learning curve, so you understand why and how your business really works. As the baseline to see if you want to adopt the best practice of anyone else. There is no quick fix. What sounds too good to be true…..

Replication can be harmful

Organisational practices, especially those that lead to competitive advantage, are often highly complex. Attempt to replicate a best practice, firms end up transforming a complex practice into a much simpler one, and this simplified version, which is much more alluring and easier to copy, is transferred from one firm to the next, becoming less and less useful—and eventually harmful.

Long term versus short term

Causal ambiguity exists because the relationships between various parts of an organisation are complex and multifaceted, meaning that many variables are influencing the outcome in various ways, with several of them operating with delays. The long-term effects of a process are vague and abstract, whereas its short-term benefits are clear and immediate. Because learning and tacit knowledge and communication patterns are fluffy, difficult-to-grasp concepts. As are skill sets, culture, systems, and processes—and they’re all connected.

The question

The question to ask is “What might be the consequences in the long run?”

Bad best practice

There are a lot of best bad practices around. Some best practices are, in fact, inefficient. Some are stupid. Some are plain harmful. We tend to believe in a Darwinian view of management. Therefore, we believe that the most successful firms must be following the best management practices, while unsuccessful firms are not.

Why best practice

Best practice enhances the legitimacy. Companies feel obliged to adopt or continue to follow a best practice because it is an industry norm, and if they choose not to follow it, investors, customers, and competitors will frown upon it. It’s good optics. But it’s not necessarily good business. Sometimes we carry on with best bad practices because that’s the way it’s always been done in our organisations.

Bad practice as a virus

Once adopted, a bad practice is hard to identify and often refuses to quit. And, like a virus, it begins to spread to other organisations. Three key conditions, in combination, make a detrimental management practice persist

The practice is associated with success (as we briefly touched on above).
There is causal ambiguity in the industry.
The practice spreads more quickly than it kills.
A virus can only survive if it spreads quicker than it kills its host, that is if it hops onto other people before the original host succumbs.

That’s true for organisations, too. Just as a highly lethal virus that kills almost instantaneously cannot survive because it will die with its host before it has been able to infect anyone else, harmful practices are also never highly toxic. Harmful practices are much sneakier: they weaken a firm just a little bit, wearing it out gradually over the long run.

Endocannibalism

Anthropologists refer to the practice as endocannibalism or mortuary cannibalism, which are just fancy words that mean: someone dies, then you eat them.

The Fore people

The Fore people consumed every part of their deceased relatives, including the brain, they gradually began to develop a nerve disease, which they referred to as kuru. A progressive disease that caused severe physiological and neurological effects, kuru was deadly; it was a variant of Creutzfeldt-Jacob (or “mad cow”) disease.

This practice of the Fore people obviously is an extreme example, but also an interesting one because it puzzled anthropologists. They did not understand—at least at first—why natural selection did not weed out this clearly detrimental ritual.

Kuru for business

Business economics and management practices work in much the same way. Bad practices spread and slowly hurt our organisations just as kuru harmed the Fore people. A harmful practice can only survive if it kills slowly.

Simplicity Sells

Ease of diffusion can thus come from the practice itself: it has to be simple enough to be imitated swiftly. A harmful practice is seldom complex and difficult to learn; it’s the simple practices you have to look out for.

Ten rules

The Ten Commandments for identifying and eliminating bad habits are:

Cut out the benchmarking.
Reverse benchmark instead.
Experiment if you can (but make sure to do it well).
Monitor entrants and companies in distress.
Ask insiders for concerns.
Ask outsiders for suspicions.
Create bundles of practices.
Aim for a chunk of the market.
Just stop it.
Watch out for “That’s the way we do things around here.”
Efficiency can kill

Organisations spend a lot of time and effort building, improving, and extrapolating value from a particular competitive advantage. This leads their processes and systems to become more efficient and more reliable.

Death by routine

As far as short-term profits are concerned, these efforts to further enhance and exploit one’s advantage are a good thing. But research has indicated that, over time, as firms concentrate fully on getting better at the one thing they’re already good at, they are less inclined to pursue new sources of value and competitive advantage. To put it bluntly, these organisations become deadened by routine. One way to prevent inertia from building up is to restructure your organisation on an ongoing basis.

Embrace change

You need to embrace change for change’s sake. You should change your organisations regularly and repeatedly, even if there isn’t a pressing reason to do so. A company needs to routinely shake itself up, regardless of the competitive landscape.

Change for change sake

Changing for change’s sake forces companies to be more proactive. Don’t wait for trouble and decline, but make proactive changes to your modus operandi. Make your life difficult. Deliberately include challenging products, customers, or markets in your portfolio of activities; they can offer a wonderful source of learning.

What is your rally car?

Various car companies, for example, have rally racing teams. Rally racing is a form of motorsport that, unlike NASCAR or Formula One, takes place on open roads that are often unpaved. Car companies such as Ford, Subaru, and Mercedes partake in rally races not only to increase their brand awareness or profits but because the races provide challenging situations that aren’t present in normal road conditions. In other words, they present opportunities for innovation. So whenever you find yourself in a similar conundrum, realise that there might be big benefits to making your life difficult every now and then. Vermeulen urges you to ask yourself, what is the rally car in your portfolio?

Balance

Balance exploration with exploitation. Get organised so that you strike a balance—and keep carefully monitoring this balance—between activities that further enhance and exploit your current competitive advantage and those that foster new ones. Be varied and selective. By all means, create an internal environment where a thousand flowers can blossom, but make sure you also have some stringent processes in place that systematically kill off 999 of them.

Change is capability

By adopting a pro-change mindset, even when change doesn’t seem immediately advantageous, your organisation can prevent these problems from taking hold and, in the process, become more adaptive and flexible. Change Is a capability

Codify

And then go back to the beginning of your own best practice. Codify the learning curve. Apply “Principles” Explicitly discuss the learnings from the experiment, and make sure to translate them into concrete follow-up procedures, technologies, or models.

Antifragile

An organisation that builds this into its system will be much less susceptible to developing bad practices, much less likely to stick with antiquated habits and routines when they are no longer ideal. Taking on challenging cases triggers renewal, innovation, and simply better ways of doing things.

There is a test

What percentage of your company’s revenues is from products fewer than three years old?
What percentage of their time employees can spend freely, for instance, pursuing a pet project they believe in, but that is not part of their formal task description?
How easy is it in your firm to get a $20,000 budget approved?
How easy is it in your firm to get project approval without numbers, such as a payback time or net present value calculation?
Which brings us to innovation and variation

There is a lot of advice on how to increase variation, and lots of firms follow it: promote pluralism and diversity, let people think outside the box, generate ideas, and so on. In other words, let a thousand flowers bloom. However, that is only half the story. You also need to be selective. In other words, you need to let 999 of those flowers die, which is something a lot of companies struggle with.

Be selective

In the absence of reliable numbers, you have to rely on something else. Objectivize the process. Companies that successfully manage the selection of their innovation systems incorporate a multitude of selection steps. At each step, both investment and information go up, while the variety of initiatives is reduced.

Give strategic intent

Recommendations for innovation often proclaim that you need to “think outside of the box,” and “get out of your comfort zone.” However, in studying the innovation processes of many high-tech companies, they found that people need some sort of a box to channel their creativity, in the form of a clear strategic intent.
This description of a company’s general strategic direction should not be overly narrow, in which case it stifles creative new ideas. But people need a general direction to provide boundary conditions between which they can innovate.

Focus

You also need to focus. Selection happens at every company. But too few think about and organise selection deliberately and systematically, with a clear strategy in mind. They just let it happen. Sometimes this may work, but a more systematic approach should increase the odds of true innovation happening within a firm.

Strategy follows innovation

Most of the innovations emerging from such a system will be incremental yet nice additions to your portfolio. Some could be big and might end up generating a significant new revenue stream for your firm. One or two, however, might end up changing the entire strategic direction of your company

The advice

Enable selection to happen. Resist the temptation to pick and choose yourself. Your responsibility is to design the system.
Tap into the wisdom of your crowd. Use the knowledge of many employees. Do not rely on the opinions of individuals to select among proposals.
Objectivize the process. Design decision rules before needing to make concrete choices. Quantify them if you can.
Let the evidence match the investment. Do not insist on numbers (e.g., market projections, payback time) too early in the process. Systematically gather evidence that aids decisions later in the process.
Give people a box for channelling creativity. Create clear boundaries that individuals can innovate between. Don’t make them too narrow.
Other books

Again very close to the conclusions of “Black box thinking”. If this is of interest, I suggest you also read “The day after tomorrow” by Peter Hinssen. Another Dutchman(ish).

4 people found this helpful

Written by an academic & loved by the academics...I hate it.

Reviewed in the United States on February 19, 2018

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Really disappointing. Freek provides some case studies to support the generalities he tries to pass off as insight. Unfortunately, they aren't things he's worked on, but just research and the result of interviews. Take a look at the quotes on the back flap; a bunch of academics. There's not much in this book that's applicable to today's business problems. If you're interested in opening an IVF clinic or a dance theater, you may find something practical in the book. Otherwise, I recommend you pass.

2 people found this helpful

“We are what we repeatedly do. Excellence, then, is not an act, but a habit.”

Reviewed in the United States on October 19, 2017

I agree with Aristotle’s comment, presuming to add accepting less than excellence (e.g. “good is good enough”) can also become a habit rather than remain an isolated complacency. As decades of research by Anders Ericsson and his associates at Florida State University clearly reveal, an individual’s peak performance is the result of rigorous discipline and repetitive practices (“deep work”) -- under expert supervision --
over an extended period of time.

In the Preface of this book, Freek Vermeulen observes, some “organizations are also filled with practices – habitual ways of doing things – that are sometimes inefficient and bureaucratic, and that makes our blood boil.

“Sometimes these inefficient practices and strategies spread and persist for decades, or even longer. They persist just like viruses persist in nature. They take on lives of their own and continue operating despite leading to suboptimal results in companies that embody them. The good news is that smart managers can purposefully identify and eradicate them, and then turn them into a profitable source of renewal and innovation. That is what this book is about.”

Vermeulen has identified what he characterizes as “The Ten Commandments of Business Innovation.” Here they are, accompanied by my brief annotations:

1. Cut out the benchmarking: Whatever works well somewhere else probably won’t work as well here.
2. Reverse benchmark instead: Look for a practice that everyone else relies on.
3. Experiment if you can (but make sure to do it well): Test only what you can control and measure.
4. Monitor entrants and companies in distress: Who has nothing to lose? Who has everything to lose?
5. Ask insiders for concerns: That is especially true of people who interact directly with customers.
6. Ask outsiders for suspicions: What do others see as vulnerabilities to exploit?
7. Create bundles of practices: One-stop need fulfillment/problem-solving
8. Take aim at a chunk of the market: Where are the vulnerabilities to exploit?
9. Just stop it: If it’s DOA, bury it.
10. Watch out for “That’s the way we do things around here”: Keep what still works well and get rid of what doesn’t.

He thoroughly explains all this in Chapter 7, Pages 98-120.

I wholly agree with Vermeulen that organizations are the fundamental building blocks of human life. “Our ability to organize – into constellations of hundreds and even thousands of individuals, conducting tasks beyond any individual’s comprehension – is arguably the one thing that sets us apart from other species.”

Organizations as well as individuals can become hostage to what James O’Toole so aptly characterizes as “the ideology of comfort and the tyranny of custom.” It is also true that organizations as well as individuals can develop their own best practices as well as the kinds of habits to which Aristotle refers.

As Freek Vermeulen well knows, most of the companies annually ranked among those that are most highly admired and best to work for are also ranked among those that are most profitable and have the greatest cap value in their industry. The nature and extent of each practice and habit in place may differ somewhat but all enable those who embrace them to achieve together what none of them could do alone.

That is the essence of wisdom in the timeless African proverb: “To go fast, go alone. To go far, go together.” Business leaders should keep that proverb in mind when deciding between pursuing short-term profits and long-term prosperity.

11 people found this helpful

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LL Saboya

O Brasil é uma sucessão de péssimos hábitos

Reviewed in Brazil on December 12, 2019

Verified Purchase

Foi por acaso que encontrei Freek. Impressionante é ver como esse livro se encaixa muito bem na vida das empresas brasileiras. Esses hábitos nocivos são quase como nossa fundação. E quando conseguimos nos livrar de alguns deles, logo alguém já importa um péssimo hábito para vender aqui.

Impressionante!

Donos de empresas e executivos talvez conheçam esse material. Duvido é apliquem nos seus negócios. Leitura essencial. Nota 10.

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D B Trafford

Great insight into why best practices become bad habits

Reviewed in the United Kingdom on February 12, 2020

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This book supports the view that I have held for many years, which is that best practices only add value when applied in the right context. Applying ‘best practices’ in the belief that they will improve performance, without understanding the context within which they are applied, is naive. Furthermore, why do leaders believe that what made their organisations successful in the past will make them successful in the future, especially when their context has changed? Continue to apply past best practices in the wrong context is, as Vermeulen puts it, a bad habit that will hold your organisation back.

This book challenges many flawed assumptions about what it takes to improve organisational performance. It’s a book that helps the reader identify their organisation’s bad habits and how to take action to remove them. It’s a must-read book for all managers and leaders who are serious about improving their organisation’s performance and innovation capability.

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Per Elis Jansson

Puts your daily troubles in perspective

Reviewed in Germany on September 18, 2019

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Lots of examples when orthodox thinking better not be used. An eye opener...

Alexandra Masó Llorente

Punto de vista interesante

Reviewed in Spain on December 21, 2018

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Interesante abordaje de los errores, con datos y validado.

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Sagnik

Challenge and Change

Reviewed in India on January 29, 2018

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"This is the way we do things around here". All of us have heard this. Clearly, this is one of the BAD HABITS Freek Vermulen asks us to break. Overall I liked the book and its philosophy of "Change". However, I feel this is a counter narrative and needs to adopted with caution. I would have liked to see more examples of companies which are big and have been able to do what Vermulen preaches.

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