Managing Performance in a Volatile Environment: Contrasting Perspectives on Luck and Causality

Performance management is an increasingly perilous and challenging activity for many firms, and involves understanding the drivers of performance as well as its measurement. Academics tend to see performance in terms of rationality, whereas business leaders tend to interpret drivers of overall performance in a broader context. When global crises and high uncertainty confound causal links to performance, practitioners often invoke the notion of 'luck' as a prospective explanation. Academics are less inclined to do so because they tend to conceptualize luck differently. This paper considers the academic/business gap and how Mode 2 research into luck and causality could produce findings that are more meaningful to practising managers in both understanding and affecting performance. It concludes by identifying ways to encourage greater academia-practitioner congruence to meet the challenges of a volatile operating environment.