Book review: Adapt: Why Success Always Starts With Failure

IF I were in mischievous mood, I would go round the Savoy Grill or the next meeting of the Institute of Directors or gathering in Davos and put a copy of this book on every place.

For this is a book that tells them in no uncertain terms that they will fail unless they change. They may sit there, all grand and smug, but the truth is that, all the time, their organisation is heading downwards. As Tim Harford points out, companies have an alarming habit of rising and falling - even those which, for a period at least, seem impregnable.

In that sense, his book is a corporate Origin of the Species and all the better for that. Such is the rich-list, celebrity-dominated world in which we now live that it's refreshing to encounter anything that you just know the captains of industry, moguls, titans, tycoons and their courtiers won't want to read.

Harford is an economist who specialises in popularising his subject. If that makes him sound downmarket, that is not the case at all. Having sat through the banking crisis and waded through mountains of material from economists - the vast majority of whom failed to see the crash coming, or when they did were unable to afford a coherent explanation or resolution - I pray for more like him.

That's not to say he's perfect. In the economists' defence, they would say that while they stick to economics and the markets, Harford strays over into sociology and science for the lowest common denominator. Nevertheless, that does make him easily readable and understood, and, crucially, it does not mean he is wrong. His Radio 4 show, More or Less, is essential listening; . similarly, his "Undercover Economist" column for the Financial Times and "Dear Economist" for Men's Health would also cause a splutter or two at high table.

But he can go too far. He takes his approach as a licence to roam - one minute delving into company history, the next exploring US tactics in the Iraq war. So Donald Rumsfeld applied textbook analysis and, when it was clear the US was in for a long struggle, was not prepared to shift his stance. It was only when General David Petraeus, who listened to troops on his ground, was given command that the conflict began to be won. Same with the Spitfire. Britain went into the Second World War with an air strategy based on bombers that were sitting ducks. Fortunately, as an experiment, pilots were allowed to fly a small, nippy plane. They loved it and the Spitfire was hastily drafted into service. Rather than condemn the Air Ministry's dogma, Harford applauds it for having the latitude to allow its staff to pursue other avenues. The lesson is variation, achieved through a pluralistic approach to encouraging new innovations.

There is plenty to give the most egotistical leaders pause here. The section on Deepwater Horizon should be required reading in any boardroom. The oil rig disaster could have been avoided, argues Harford, if BP encouraged whistleblowers and bothered to find out what its engineers were saying. Just like Petraeus in Iraq.