What Works, By Hamish McRae

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It takes some chutzpah to publish a book about business and social success stories while Britain and the world are still sifting through the devastation of the 2008 financial crash. But Hamish McRae, an associate editor of The Independent, believes that there's much to be learnt from an optimistic outlook. What Works is a collection of experiential essays spanning the globe – from the thriving Edinburgh Fringe Festival to Bangalore's rebirth as a hi-tech city – in which he tries to deduce some of the principles behind success.

What Works deliberately sets itself apart from theoretical books, such as Good to Great, Jim Collins' exploration of what takes a business to the top of the rankings. Instead, McRae takes the empirical method, and makes some inspired choices along the way.

One essay focuses on Ikea. Founded in 1943, the Swedish furniture business hit on the idea of flat-packing in 1956, when one of its tables wouldn't fit in a car. Half a century later, its formula of minimal Scandinavian design and gentle pricing means Ikea products are now a standard in many a European home. Profits are one easy marker of success, but not McRae's sole parameter. He also notes that the company has met its customers halfway. A pioneer in outsourcing production and flatpacking, which radically cuts distribution costs, Ikea makes an implicit deal with the public – it will price their products cheaply if the consumer is prepared to do some of the work. Both win.

A recurring motif is people being given the space to do things for themselves. Edinburgh's fringe festival has thrived by accommodating all who wish to perform. Though wildly different, McRae also looks at Dharavi, the slum which was the setting for Danny Boyle's film Slumdog Millionaire. This piece of marshland near the heart of Mumbai is now home to 750,000 people in lines of makeshift dwellings with corrugated tin roofs. In the absence of formal civil governance, the residents have built their own systems. Rudimentary electric cabling and drainage systems exist. There are micro-businesses, often craft-based, schools held for the slum children, and an organic social order. Sure, it's not heaven, and McRae does not suggest so, but it functions well considering its modest means.

Heart-warming as these stories are, it is impossible to escape the counteraction of success. The most obvious is the economic crash of 2008, the effects of which McRae has had to incorporate into several chapters, such as the one on Harvard's decimated endowment funds, and the boom in Ireland – the Celtic tiger now whimpering in pain.

There is also a more subtle effect of success: that one institution or business's gain can be a contributing reason for failures elsewhere. Take the City of London. Its success as a financial centre drew in so many of the brightest graduates, and turned it into the tax engine of our economy. That arguably sapped the energy from other parts of the British economy, and the country's over-reliance on the City was painfully exposed by the current fiscal crisis. Or take Dubai's property boom, which created a 21st-century trade city. It now finds itself a major throughfare for the shipping of arms and opium and has thriving markets in the sectors of prostitution and ill-treated migrant labour.

However, there are also incidences of failure and success within a single setting that have no causal connection. Tokyo, another of McRae's examples, has a remarkably low crime rate, attributed to the koban – manned police cabins – dotted throughout the city. But while you stand a far better chance of not being murdered, mugged or raped in Tokyo than in many other major cities, the flipside is that the yakuza, the organised crime syndicates of Japan, have not been controlled. Similarly, Australia, with its excellent sports training facilities and athletics prowess, still has to deal with an obesity epidemic. The answers to these problems cannot be found within their functioning counterparts.

McRae has picked a difficult subject, not least because success stories are few and far between, and he chooses an Ikea-style format – withholding deep analysis in return for making What Works broad, accessible and colourful. On reading his book I found myself wanting to pick-up Why Most Things Fail, a 2005 book by Paul Ormerod with far more searching analysis and a good dose of pessimism to offset McRae's optimism. But What Works does succeed clearly in one area – seeing the markers of success as far more than balance sheets and statistics. In an era in which social responsibility and initiative will have to fill the hole left by government budget deficits, it's good to have a book that shows faith in people.

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