Vermeulen, Breaking Bad Habits

Many of the principles articulated in Freek Vermeulen’s excellent book Breaking Bad Habits: Defy Industry Norms and Reinvigorate Your Business (Harvard Business Review Press, 2017) can easily be extended beyond the confines of business organizations. So even if you aren’t a business executive (but of course especially if you are), you can profit from the book’s antidotes to bad practices.

Bad practices thrive on inertia. To overcome this inertia and reinvigorate the organization one should implement “complementary processes that foster ongoing creation and renewal.” For instance, embrace change for change’s sake, make your life difficult, balance exploration with exploitation, be varied and selective. Here I’ll skip over the first recommendation, which, when “Change for Change’s Sake” appeared in HBR in 2010, prompted a spate of hate mail and emails where Vermeulen was addressed as “You Idiot.” To do justice to the nuanced concept would require too much space.

Instead, let me start with the second recommendation: make your life difficult. The author suggests undertaking a challenging variant on one’s existing product or service. For instance, a fertility clinic might treat a 49-year-old woman with one ovary; a law firm might take on a difficult legal case that no one else wants to touch. “It needs to be a challenge, but … one from which you could see or at least feasibly suspect that its learnings will spill over into your normal-day stuff.”

The third recommendation, balance exploration with exploitation, means that a business should try new things but at the same time focus on profiting from existing competitive advantages.

And, the last recommendation: be varied and selective. Essentially this calls for letting a thousand flowers bloom but allowing 999 of them to die.

On another front, this one complete with an investing tip, Vermeulen cites a study on employee satisfaction. The share price of companies that made it onto Fortune magazine’s list of best companies to work for “rose about 3.5 percent faster than others’ did.” The stock market, however, underestimates the effect of happy employees. Investors did not factor employee satisfaction into their valuation of the company. “Only when—inevitably—the employees’ happiness started to bear fruit in terms of the company’s profits did the share price make a happy jump in surprise.”