The Edison Ratio

Physicists should add the Edison Ratio to their list of fundamental, universal constants. Edison’s formulation for genius — 1 percent inspiration and 99 percent perspiration — is as invariant as the speed of light in a vacuum.

Purveyors of business panaceas appear to have reached a different conclusion. Whatever else happens in the corporation, they appear to be saying, it’s what happens in the executive suite that matters. Setting the right direction, whether through strategy, scenario-based planning, enterprise architecture, or Ouija board, is, in their view, what drives success. This perspective explains, perhaps, the ongoing rise in executive compensation and continuing decline in what regular employees receive.

A dozen years ago, in InfoWorld’s “IS Survival Guide,” I expressed my concern that employee empowerment was turning out to be nothing more than a short-lived management fad (“Management’s retreat from involvement,” 4/13/1998).

Except that as the Edison Ratio is a fundamental universal constant, executives ignore it at their peril.

What seems to have happened is that the business punditocracy has discovered the value of pandering to its audience, delivering seriously awful advice: That the direction executives set (inspiration) is far more important than the ability to execute (perspiration).

This also explains why business schools are more likely to teach strategy and finance than project management and negotiation.

If you don’t believe execution matters more than strategy, here’s evidence, in the form of one of those dreaded sports metaphors people like me like to inflict on people like you, namely, this question: Which is the better strategy in American football — a passing game or a running game?

Answer: Whichever you’re better at, and you’d better be good enough at the other, too, so you can keep your opponent off balance.

Not that the direction a company decides to follow is entirely irrelevant to its success. Without a doubt, every company has an opportunity to fail by moving in the wrong direction — by (for example) offering products nobody wants anymore, or pursuing customer segments that are both shrinking and broke.

But you never know. Imagine Ubuntu rather than Apple had offered up the iPad … otherwise identical in every respect to what you saw advertised for free on the cover of Newsweek,(other than allowing Flash to run in its browser, perhaps).

Sometimes, customers want products because of excellence in marketing execution, not because of the product itself.

Nor are the company’s executives solely and uniquely competent to define company direction. As counterpoint:

Two popular approaches to setting strategy are S.W.O.T. analysis (strengths, weaknesses, opportunities, threats, and it should be T.O.W.S. because strengths and weaknesses are only meaningful in the context of external threats and opportunities); and scenario-based planning, in which a company hedges its bets by investing in responses to multiple likely ways the future might play out.

For companies that use T.O.W.S., imagine the company’s executives sent out a short questionnaire to all employees, asking this question: “Based on your personal experiences and conversations, please list the three biggest threats and opportunities we face in the outside marketplace today, and explain your reasoning.”

Do you think members of the company’s sales force might know something about what customers are asking for that might be significant, or that a twenty-something in Marketing might be more aware the company is being bad-mouthed on Facebook than the Chief Marketing Officer?

Follow it up with a second survey that lists the highest-ranked threats and opportunities, and asks about strengths and weaknesses. Think the folks on the assembly line might know something about how defects happen? That a front-line supply chain employee might be more aware of what it’s really like to do business with Chinese suppliers? Or that IT’s developers might point out that more project effort goes into twiddling increasingly fragile interfaces than into new features and functionality?

If your company prefers scenario-based planning to strategy: Instead of the company’s top executives figuring they have the best handle on likely futures, imagine they organized a contest, where the three employees who do the best job of proposing and justifying likely future scenarios, also supplying the strongest business plans for dealing with them, are promoted to either running the new venture they suggested or, if not ready for that responsibility, to a senior advisory role in making them work.

Think the company might get something more interesting and imaginative out of the contest than out of a senior executive retreat?

The business punditocracy seems to think those in the executive suite have all the answers. Just my opinion: They might in some companies. In others, they have a more important role:

Asking the right questions.