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Why Corporate Leaders Need History
It’s not unusual to run into a business leader who’s keen on history, watches the History Channel and Ken Burns documentaries, and reads biographies by Doris Kearns Goodwin.
But is there a reason beyond personal interest to consider the past? Should business students study history in college?
As a history professor, I have a vested interest in saying “yes.” But I also have reasons. Here are two:
The Need to Understand Innovation
To appreciate how innovation happens, it helps to understand how things begin. That should be easy: As humans, we are passionate to know the origin of things. The trouble is, we are also hard-wired to identify a single beginning and a single inventor—even when neither is to be found.
Consider the popular story about Abner Doubleday, who “invented” baseball in Cooperstown, N.Y., in 1839. There are at least two things you should know about this iconic tale. First, it’s not true. Second, as the evolutionary biologist Stephen Jay Gould once explained, the fact that so many of us believed the story indicates how desperately we want to explain origins in a simple fashion. In fact, it took decades for the rules of baseball to become systematized and for the game to look like the one we watch today. Early baseball evolved from a variety of bat-and-ball games and bore a striking resemblance to the child’s game of kickball. It had a Massachusetts variant and a New York variant, among many others. Some versions allowed fly outs to be made after the ball bounced. Some did not.
Finally, after decades of fitful evolution, what we now call “baseball” was born. And all of this unfolded without help from Abner Doubleday.
There is an important lesson here for anyone looking to introduce a new business model or change the way we interact with technology. Significant areas of life, such as technologies, social institutions, and business practices, do not have one identifiable beginning or creator. Innovations and innovators are products of complicated webs of accident, circumstance and, yes, sometimes even design. This means there is more to creating a culture of innovation than properly situating the water coolers or hiring the next marketing genius. Capital markets, physical infrastructure, government regulation, organizational fitness and consumer interest play a role in determining whether ideas that pop into our heads will be caught heading to first base or make it all the way home.
Being Prepared for the Unexpected
There’s very little we can forecast about the future — not even our personal future, much less that of the rest of the world. But studying the past refines our sense of how causes turn into effects, while preparing us for the consequences of our actions. For example, read the rosy predictions of those who looked forward to the American Civil War or World War I. You’ll see how little people knew about the future ahead of them, and how much their fate was tied to decisions made by others.
Knowing such things about the past won’t allow us to predict the future. However, it should help us make better forecasts about it, and to appreciate the degree to which the future will be shaped by forces beyond our control or even by our own imaginings. Take the 2008 financial meltdown. It was the product of behavior and decision-making that occurred over long spans of time by individuals with very different obligations, interests, and motivations. The New York Times reported that precious few of them, even experts in risk analysis, saw the crisis coming.
Like the actuary, the historian works with multi-variables. But just as the historian has no algorithms to divine the past, the business leader has none to foretell the future. Though the occasional vote, battle, or financial disaster has traceable and quantifiable effects, the forces of history are too diffuse to serve predictive value. They provide wisdom rather than forecasts, cautioning against exuberance in good times and cushioning against despair in bad.
In short, to study history is to draw from the deep well of human experience. Doing so won’t guarantee that business leaders will get things exactly right. But it could help reach outcomes better aligned with projections. More important, historical study instills the invaluable lesson that expectation and reality almost always diverge.
Chris Beneke is associate professor of history at Bentley University.
This post was adapted from a chapter titled “Change Over Time: The Study of the Past and the Future of Business Education” in Shaping the Future of Business Education: Relevance, Rigor, and Life Preparation, edited by Gordon M. Hardy and Daniel L. Everett.
College Factual, an online portal designed to assist students in selecting a college, has released its top colleges for a degree in finance ranking and Bentley University stands at #4 overall in the U.S.