How did we choose the Roadside MBA firms? Is our book an attempt to carefully construct a representative sample so we can scientifically assess what makes a small business successful?
Well… no.
We found our interview subjects in one of two ways. As described here, we often got a lot of help from local Chamber of Commerce folks. We’d call up, describe our plans, and ask to be connected with interesting, talkative, and thoughtful local business owners. Sometimes our attempts to go through the Chamber didn’t work for one reason or another, so then we’d often resort to cold-calling, mostly off the membership list of the local Chamber. The hardest part about the cold-calling, we found, was just getting the right person on the phone. Once we could get through to an owner or a general manager, it was unusual for us to get a flat “no”.
As a result, there’s nothing very scientific about the selection of businesses we talked to.
And that’s fine with us, because we’re not trying to encapsulate the entire universe of small business so we can draw big, general conclusions. Our aim here isn’t to do new science; instead, our goal is to illustrate principles that have been established scientifically elsewhere (by us in small part but also by business professors and economists the world over).
And we do this by illustrating the logic of good decisions.
Here’s an example of what we mean: For years, business professors and economists have been working to understand the economics of pay-for-performance systems. Paul and I have worked on this topic a lot, and there are many dozens of researchers working on it right now… probably one or more at a university near you. As a result of all this effort — building models, formulating hypotheses, testing against the data — we’ve learned a lot about what type of pay-for-performance plan is best in a given situation. (And even when you might be better off not tying pay to performance.)
We saw, on our travels, many good decisions being made; that is, lots of cases where managers chose exactly the right pay-for-performance plan for their business. And how do we know that the managers were making good decisions? Well, that’s where the science comes in. All that model-building, hypothesis-forming, data-analyzing social science work has given us a solid understanding of the logic of pay-for-performance. This logic underlies the frameworks that we teach our MBA students, and gives us a way to explain why the decisions we highlight in the book were good ones.
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