800-CEO-READ Blog

Alpha Dogs in Inc. Magazine

The January 2006 issue of Inc. has an article entitled (Re)born to be wild by Donna Fenn. It is about Mike's Famous, a Harley-Davidson dealership in New Castle, Delaware.

If you like the article, you might be interested in the book she wrote called Alpha Dogs: How Your Small Business Can Become Leader of the Pack. The article was adapted from this Collins title that came out in December.

C.K. Prahalad - Business Prophet

BusinessWeek ran a six page profile of C.K. Prahalad (sub. needed) in their January 23, 2005 issue.

Fact about the author:

Profession: University of Michigan professor, speaker, and consultant

Clients: Citibank, Phillips, Phillip Morris

Description of style from past client: "...mean, but it was effective."

Books he has authored: Competing For The Future (1994 with Gary Hamel), Fortune At The Bottom of The Pyramid (2004), The Future of Competition (2004 with Venkat Ramaswamy)

What C.K. stands for: Coimbatore Krishnarao

New ebook from Seth

Seth Godin launched a new ebook yesterday. It is called Flipping the Funnel.

It comes in three flavors:

• Corporate/Traditional Marketing (Vanilla)
• Politics (Rocky Road)
• Non-profits (Ben & Jerry's)

Books To Watch For - Spring '06

We did this last fall and thought you might enjoy another look at the season ahead.

So, here are the books we think you should be watching for in the first part of 2006.

• The Number by Lee Eisenberg (1/06, Free Press) - If you have walked into any Barnes & Noble since New Year's it would have been impossible to miss this book. We think it is a great book. Eisenberg takes Gladwell-like look at the complexities of retirement. As I said in my prior post, this one had me on an emotional rollercoaster. It is a great book and one everyone should read.
• The Wal-Mart Effect by Charles Fishman - The long-time Fast Company editor writes an amazing book on what drives Wal-Mart and how that drives our economy. He has firsthand accounts from employees who started some of the company's biggest businesses. He also talks with suppliers about what it is like to work with the retail giant. What Fishman does best is shed some light a company that the public really doesn't know much about.
• Silos, Politics, and Turf Wars by Pat Lencioni (2/06, Jossey-Bass) - We have just started reading this one, but it is hard to bet against this author after the classics of Death by Meeting and Five Dysfunctions of A Team.
• The Ultimate Question by Fred Reichheld (3/06, Harvard Business School Press) - Reichheld has been writing books on customer loyalty for a number of years. He has done the research to show that you can ditch all the 47 question satisfaction surveys and ask your customers one simple question - "Would you recommend us to someone else?"
• The Radical Edge by Steve Farber (4/06, Kaplan) - Jack just got done reading the manuscript and he says he may like it more than Radical Leap. Many of the familiar characters are back. This time, it is about taking personal responsibility and living life on your terms.
• Questions of Character by Joseph Badaracco (4/06, Harvard Business School Press) - The subtitle says it all -- "Illuminating the Heart of Leadership Through Literature". The book is based on a class taught by the author at Harvard Business School. He says that fiction offers a unique way to teach leadership. It is possible to truly know what the characters are thinking, versus learning tools such as interviews and case studies. I think it is brilliant.

New Year's Resolutions for Better Finances?

Richard Pachter of the Miami Herald reviews three personal finance books to get your finances in order for the New Year.

• Smart and Simple Financial Strategies for Busy People by Jane Bryant Quinn.
• The Wall Street Journal Complete Money and Investing Guide by Dave Kansas
• The TurboTax 2006 Income Tax Handbook edited by Anna Isgro

Tax Season Arrives Again

The Weekend Edition of the Wall Street Journal asked tax expert Randy Blaustein for good books on the IRS and your taxes.

• The IRS Problem Solver by Daniel Pilla
• Confessions of a Tax Collector by Richard Yancey
• What The IRS Doesn't Want You To Know by Martin Kaplan
• Tax This! An Insider's Guide to Standing Up To the IRS by Scott Estill
• J.K. Lasser's Your Income Tax 2006 by the J.K. Lasser Institute

Blaustein also has a book called How to Do Business With the IRS: The Complete Guide for Tax Professionals (out of print).

This Week - 1/30/05

What is it about Wisconsin, snow, and Mondays? We are a light covering this morning. Hope things are well where you are.

We have a great interview with Charles Fishman, author of the Wal-Mart Effect.

I also promised a list of what to look forward to for 2006 and we will get that up today.

With us getting away from the holidays, there seems to be more people writing about business books and their authors. You should see an increased frequency in posts this week.

Have a great week!

Chasing Daylight Part 2

A while ago I posted my thoughts about a book called Chasing Daylight. Today's New York Times reviews the book here. After thinking about the book for the past week, I continue to love the book. Check it out. Read it.

Long Beach Harbor

This past week I went to speak at an American Booksellers Association school on the subject of outside sales. This post is not about that. It is about the van ride to the hotel from LAX. The event was held at the Long Beach Hilton. I took a Shared Van to the hotel and the van had a couple of people to drop off before me. We came into Long Beach from the South going over a bridge. The ride over the bridge was really mind boggling. From the top of the bridge, where we sat for awhile, you could look in all directions and see nothing but shipping containers being moved around. Sacks five and six high sitting on the ground. Multiple trains moving North and East with containers stacked two high. Trucks looking like ants all over the place moving the containers. Cranes everywhere you looked.

Our local newspaper had a series of articles about globalization last year with a mind boggling picture from Hong Kong or some such place with shipping containers everywhere, but to see it live with my own eyes was really amazing. Anybody who thinks that their business, their livelihood will not be affected by the massive amounts of goods coming into the country, might be interested in some swamp land I own in Florida.

Coming this spring from Princeton University Press is a book I really liked called The Box which is the story of the way we have moved freight coming into our country for the last 100 years and how the shipping container, i.e. The Box changed the world.

100-Mile Walk Resources

There is quite a list of resources at the end of The 100-Mile Walk. There is an extensive list on leadership and a great list on zen practice.

The list is pretty long, so I am going to put it in the extended entry.

Click through if you are interested...

BOOKS ON LEADERSHIP

Adizes, Ichak. Managing Corporate Lifecycles. Paramus, NJ: Prentice Hall, 1999 (out of print, ISBN 0735200572).

Barry, Douglas. Wisdom for the Young CEO. New York: Running Press Books, 2005.

Bennis, Warren. An Invented Life: Reflections on Leadership and Change. Reading, MA: Addison-Wesley, 1993 (out of print, 0201627140).
———. On Becoming a Leader. Reading, MA: Addison-Wesley, 1989.
———. Why Leaders Can't Lead: The Unconscious Conspiracy Continues. San Francisco: Jossey-Bass, 1989.

Bennis, Warren, and Joan Goldsmith. Learning to Lead: A Workbook on Becoming a Leader. Reading, MA: Addison-Wesley, 1994 (out of print, ISBN 0201311402).

Bennis, Warren, and Burt Nanus. Leaders: The Strategies for Taking Charge. New York: Harper and Row, 1985 (out of print, 0887308392).

Bossidy, Larry, and Ram Charan. Execution: The Discipline of Getting Things Done. New York: Crown Business, 2002.

Buckingham, Marcus, and Curt Coffman. First, Break All the Rules: What the World's Greatest Managers Do Differently. New York: Simon & Schuster, 1999.

Cobbs, Price M., and Judith L. Turnock. Cracking the Corporate Code: The Revealing Success Stories of 32 African-American Executives. New York: AMACOM, 2003.

Collins, James C., and Jerry I. Porras. Built to Last: Successful Habits of Visionary Companies. New York: HarperBusiness, 1994.

Cooper, Robert K., and Aymen Sawaf. Executive EQ: Emotional Intelligence in Leadership and Organizations. New York: Penguin Putnam, 1997.

Covey, Stephen R. Principle-Centered Leadership. New York: Summit, 1991.

DePree, Max. Leadership Is an Art. New York: Doubleday, 1989.

Drucker, Peter F. The Effective Executive. New York: Harper and Row, 1967.
———. The Essential Drucker: Selections from the Management Works of Peter F. Drucker. New York: HarperBusiness, 2001.

Eccles, Robert G., and Nitin Nohria, with James D. Berkley. Beyond the Hype: Rediscovering the Essence of Management. Boston: Harvard Business School Press, 1992.

Goleman, Daniel. Emotional Intelligence: Why It Can Matter More than IQ. Toronto: Bantam, 1995.
———. Working with Emotional Intelligence. New York: Bantam, 1998.
Goleman, Daniel, Richard Boyatzis, and Annie McKee. Primal Leadership: Realizing the Power of Emotional Intelligence. Boston: Harvard Business School Press, 2002.

Greenleaf, Robert K. Servant Leadership: A Journey into the Nature of Legitimate Power and Greatness. New York: Paulist Press, 1977.

Hankin, Harriet. The New Workforce: Five Sweeping Trends That Will Shape Your Company's Future. New York: AMACOM, 2005.

Heider, John. The Tao of Leadership: Leadership Strategies for a New Age. Toronto: Bantam, 1986.

Katzenbach, Jon R. Peak Performance: Aligning the Hearts and Minds of Your Employees. Boston: Harvard Business School Press, 2000.

Kelley, Robert E. How to Be a Star at Work: 9 Breakthrough Strategies You Need to Succeed. Toronto: Random House, 1999.

Kotter, John P. Leading Change. Boston: Harvard Business School Press, 1996.
———. Power and Influence: Beyond Formal Authority. New York: The Free Press, 1985.

Kotter, John P., and James L. Heskett. Corporate Culture and Performance. New York: The Free Press, 1992.

Kouzes, James M., and Barry Z. Posner. Credibility: How Leaders Gain and Lose It, Why People Demand It. San Francisco: Jossey-Bass, 1993.
———. The Leadership Challenge: How to Keep Getting Extraordinary Things Done in Organizations. San Francisco: Jossey-Bass, 1995.

Mai, Robert and Alan Akerson. The Leader As Communicator: Strategies and Tactics to Build Loyalty, Focus Effort, and Spark Creativity. New York: AMACOM, 2003.

McHugh, Donald E. Golf and the Game of Leadership: An 18-Hole Guide for Success in Business and in Life. New York: AMACOM, 2004.

Nanus, Burt. Visionary Leadership: Creating a Compelling Sense of Direction for Your Organization. San Francisco: Jossey-Bass, 1992.

Peters, Tom. The Pursuit of WOW! Every Person's Guide to Topsy-Turvy Times. Toronto: Random House, 1994.

Peters, Tom, and Nancy Austin. A Passion for Excellence: The Leadership Difference. New York: Random House, 1985.

Peters, Thomas J., and Robert H. Waterman, Jr. In Search of Excellence: Lessons from America's Best-Run Companies. New York: Harper and Row, 1982.

Pitcher, Patricia. Artists, Craftsmen, and Technocrats: The Dreams, Realities, and Illusions of Leadership. Toronto: Stoddart Publishing, 1995 (out of print, ISBN 0773758542).

Sample, Steven B. The Contrarian's Guide to Leadership. San Francisco: Jossey-Bass, 2002.

Seibert, Donald V., and William Proctor. The Ethical Executive: A Top C.E.O.'s Program for Success with Integrity in the Corporate World. New York: Simon & Schuster, 1984 (out of print, ISBN 0346124506).

Seligman, Martin E. P. Learned Optimism. New York: Knopf, 1991.

Tulgan, Bruce. Winning the Talent Wars. New York: W. W. Norton, 2001.

Uldrich, Jack. Soldier, Statesman, Peacemaker: Leadership Lessons from George C. Marshall. New York: AMACOM, 2005.

Ulrich, David, Jack Zenger, and Norm Smallwood. Results-Based Leadership. Boston: Harvard Business School Press, 1999.

Walton, Sam. Sam Walton: Made in America. New York: Bantam, 1993.

Welch, Jack. Jack: Straight from the Gut. New York: Warner Business, 2002.

Welch, Jack, with Suzy Welch. Winning. New York: HarperCollins Publishers, 2005.

Zemke, Ron, Claire Raines, and Bob Filipczak. Generations at Work: Managing the Clash of Veterans, Boomers, Xers, and Nexters in Your Workplace. New York: AMACOM, 2000.

BOOKS ON ZEN PRACTICE

Aitken, Robert. Taking the Path of Zen. New York: Farrar, Straus, and Giroux, 1982.

Beck, Charlotte Joko. Everyday Zen, ed. Steve Smith. San Francisco: HarperCollins, 1989.

Chödrön, Pema. Places that Scare You. Boston: Shambhala Publications, 2002.
———. When Things Fall Apart. Boston: Shambhala Publications, 1996.
———. The Wisdom of No Escape. Boston: Shambhala Publications, 1991.

Hagen, Steve. Buddhism Plain and Simple. New York: Broadway Books, 1997.

Huber, Cheri. The Fear Book. Mountain View, Calif.: Keep It Simple Books, 1995.

Katigiri, Dainan. You Have to Say Something. Boston: Shambhala Publications, 1998.

Forbes' Best Business Books of 2005

I thought we had seen all of the lists for 2005, but Forbes published their selections on Tuesday.

To determine the very best of the crop, we polled a dozen writers, editors and publishers from Forbes. Thirty-three books were nominated, which we then winnowed down to the five very best, with the help of the editors of Forbes magazine and Forbes.com. We did not attempt rank the top five--all of them are excellent in completely different ways. Try these tomes, and you'll be all caught up on your 2005 business reading.

Their selections are:

• The Battle For The Soul of Capitalism by Jon Bogle
• Blink by Malcolm Gladwell
• Disneywar by James Stewart
• The Moral Consequences of Economic Growth by Benjamin Friedman
• The World is Flat by Thomas Friedman

Hat Tip: BizBook Nuggets

Hershey Co. vs. Hershey the book

Milton Hershey -- an almost universally recognized name, typically one that is printed in silver on a dark brown background. Yep. You know the one. The infamous Hershey bar, kisses and miniatures and of course, the town -- Hershey, Pennsylvania.

Some call him A Real Life Willy-Wonka but few know all the details behind his life story. So, without permission or sponsorship from the Hershey Company, Michael D'Antonio set out to tell the story behind the chocolate bar everyone knows. The book: Hershey: Milton S. Hershey's Extraordinary Life of Wealth, Empire, and Utopian Dreams.

Prior to being published earlier this January, the book fell under a bit of fire from the Hershey Co. Hershey was concerned that "consumers might think Hershey authorized the book, the dust jacket of which also includes a Hershey's Kiss and two older advertising images". Apparently, the Hershey book provides a little more depth to Mr. Hershey than that obtained through a typical Hershey Co. visit. Accordingly, the book's publisher--Simon & Schuster, and booksellers have worked to ensure that customers do not believe that Hershey sponsored the book. This has included making a special sticker on the book cover that reads, "Neither authorized nor sponsored by the Hershey Company" and by copying the same quote into product pages.

You can check out a BusinessWeek review here or find out more information on the lawsuit here.

Biography or not, Mr. Hershey has left a lasting legacy -- chocolate bars and kisses.

Boss' Quote of The Week

"For me the hiring is the easy part. I don't run a multi-national corporation, so I'm right here all the time. For me the hard part is letting go and avoiding the temptation to micro-manage everything they do. You've got to keep telling yourself you hired them for a reason, and then give them the freedom to go out there and do what's right, even if it means making a mistake now and then."

Bill Mossontte
Mission Hill Bowl
Mission Hills, California

From Satisfaction: How Every Great Company Listens to the Voice of the Customer by Chris Denove and James D. Power IV (Feb. 2006)

The DNA of Branding

What's your favorite brand? Do you prefer Pepsi or Coca-Cola? Starbucks or Seattle's Best? Target or Wal-Mart? Adidas or Nike? I could go on and on.

Me, I'm often in favor of a Starbucks tall skinny vanilla latte, Target's Isaac Mizrahi line and Nike's running shoes. Have I bonded with the brands I just named? Perhaps. Admittedly, in some cases, yes. In others, the brands equate higher quality or lower price for better quality and there's something about the froth that lightly floats on top of my latte. Okay, so perhaps I am attached to the brands.

There's a new book called Primal Branding that recently came out. The author, Patrick Hanlon -- founder and CEO of Thinktopia -- did an interview in Entrepreneur magazine in February's edition. To sum up the book in a sentence, it's about the DNA of brands divided into seven parts. The seven parts in collaboration work to create the "primal code".

Hanlon believes that with the hundreds of choices consumers have, it "boils down to whom customers feel better about. That's called preference and preference creates sales."

To give you an idea of Hanlon's background, he's worked with Absolut, Barnes and Noble, Best Buy and more. One could easily conclude that the primal code works only for big companies such as those aforementioned.

This is not the case. Branding "actually gives small businesses a huge competitive advantage, not just at a functional and benefits level, but at an emotional level. This is really a way to manage the intangibles of the brand and make it operational."

What do you think?

Leadership Books Reviewed in WSJ

On Friday, Daniel Akst wrote a business book review for the Wall Street Journal. It was titled "O Captain, My Captain" and looked at three titles: The Servant Leader, The 360° Leader, and Executive Intelligence.

It is rare that WSJ will review business books. For being the leading business publication in America, it is something that only happens about once a month. It makes no sense to me.

What makes it worse is they generally want to torpedo the books. This is again something I don't understand. Why not look for business ideas and thoughts that you can support? Is it that rare? Why not just tell your readers about new books and let them make their own judgement?

In this case, one out of three make the cut. Akst likes The Servant Leader saying, "Although it rambles in places, it contains an excellent synopsis of just what a leader is supposed to do". John Maxwell's latest book gets "[after 40 books], is there really that much for any one person to say on the subject?" and Justin Menkes is told that there is no evidence that executive intelligence exists or played a role in any of the examples he mentions.

At first glance, it will look like we are just disagreeing with the reviewer. Jack selected The 360° Leader in January as one of his books of the month. I liked Executive Intelligence having interviewed Justin in November (read the HBR article if you don't have time for the book).

I want to get at a deeper point. At 800ceoread, we at read and review business books to find the good. There is almost always something I can pull out of a book to share with you. Sometimes, it reinforces commonly held beliefs of how business should be done. Sometimes, it flies in the face of it. Either way, it all helps us down the path of understanding how we can be better business people.

10 Rules Video

We had Chris and VG (10 Rules for Strategic Innovators) over for a podcast in December. You can now see VG in full color over at Business Week Online. The interview is about eight and a half minutes long.

Lencioni and Publishers Weekly

Pat Lencioni (Five Dysfunctions of a Team; Silos, Politics, and TurfWars) does Three Answers with Publishers Weekly.

This Week - 1/23/06

Welcome to a new week (and for those in Wisconsin--new snow!).

We are going to be getting back on the podcasting bandwagon this week. We have recorded a number of new interviews with fun and interesting folks. This week, we will be posting an audio Q&A with Sander and Jonathon Flaum, authors of 100-Mile Walk.

I am also going to get a post up about the book you should be looking for in 2006. There is alot of great stuff coming out.

And then there will be the normal stuff...

Have a great week!

Kevin Kelly's Cool Books- Part III

To finish up for the week, Kevin Kelly's final two choices were:

1491: New Revelations Of The Americas Before Columbus by Charles Mann (kevin's description)

and

Programming the Universe: A Quantum Computer Scientist Takes on the Cosmos by Seth Lloyd (kevin's description)

Chasing Daylight Part 1

I am reading a profoundly moving book. I will write at least a Jack Covert Selects later but I hope to excerpt it and do other stuff to get the word out. The book is called Chasing Daylight, How My Forthcoming Death Transformed My Life by Eugene O'Kelly. I quote from the backcover

"On May 24, 2005, Eugene O'Kelly stepped into his doctor's office with a full calendar and a lifetime of plans on his mind. Six days later he would resign as CEO of KPMG. His lifetime of plans dwindled to 100 days. leaving him just enough time to say goodbye. Chasing Daylight is O'Kelly's honest, touching and ultimately inspirational memoir completed in the three-and-a-half months between his diagnosis with brain cancer and his death in September 2005."

Folks, I gotta tell you, this is a book that needs to be read by all of us who think that we have a chance to slow down later. I can't remember being moved by a book like I am being moved by this book. More later...

If you want it done right, do it yourself.

How many times have you heard the saying, "If you want it done right, do it yourself."

Authors are taking this message to heart. With "180,000 titles released each year," it's not easy to get a book into the limelight. Publishers are actively promoting only their top picks of each year -- the books that are practically guaranteed to be a success.

Partly because of this, authors are taking their book promotions into their own hands. They're trying new creative promotions including cocktail coasters, book character names, and cowboys.

You may even see one business book author on the paper cup that the famous mermaid sells. Paul Orfalea, Kinko's founder and author of Copy This!, "recently gave Starbucks a quote from his 2005 book...to print on the coffee chain's cups." (from a Forbes article) [I'm still waiting for my quote to be printed on Starbucks cups]

If the trend continues, and it most likely will, authors will need to find even more creative outlets for promoting their books.

Kevin Kelly's Cool Books - Part II

Today, Kevin suggests Ray Kurzweil's The Singularity is Near.

For a little more, check out the extensive interview with Kurzweil in Tom Peters' Cool Friends section.

The Difference Between Knowing and Doing

I had seen references from some really smart people to The Knowing-Doing Gap by Jeffrey Pfeffer and Robert Sutton. This duo has another book coming out this spring, so I thought I would check out the old one.

The book was published back in 2000 and it is pretty hard to categorize what they are talking about. At first, you think it is about Execution and Getting Things Done, but that misses alot of what the authors are saying.

They start by talking about how much is spent on training and consulting (they put the number at $60 billion annually). They then ask the question, "With all this money being spent, why aren't companies doing what they are being taught?" They make a great case for why well-established practices like modular manufacturing are talked about but never implement.

The authors move onto to the idea that people really learn by doing. They state most jobs that are dangerous are taught with on the job training, not with textbooks. Would you teach a surgeon or a airline pilot using manuals?

This is where is got interesting for me. Pfeffer and Sutton say that talk is the substitute for action in most companies. One kind of talk is complex and full of jargon. People think the complex solution is always the answer ('lots of hard work went into it, so it must be good' and 'no one will be able to duplicate this'). The simple solution is thrown out because it has been around forever and if it was so great someone would have already done it.

I think they get at the paradox of why successful companies often have such simple philosophies. People always point to Southwest Airlines and ask how can they be so successful by just hiring people who tell good jokes and just fly one type of plane. The reason they do that is because it makes the doing easy. It means flight crews that can diffuse difficult situations with customers. Everyone knows that 737s are the most fuel efficient plane in the sky. Yet, Southwest is the only one with a dedicated fleet.

One last thought--information and knowledge are ubiquitous. The only difference between you and your competitor is who is doing.

Change the Way You See Everything Through Asset-Based Thinking

Coming in March '06 Running Press has a book coming called Change the Way You See Everything. I have just started it but want to share with you a great page from the book:

Forget Perfection
Asset-Based Thinking liberates you from the pointless need to strive for "perfection." You realize that pursuit of perfection is not an asset, it's a liability. For a change in the way you feel about yourself, see yourself as a work in progress...just like everybody else. Each day, say to yourself that for today you are perfect the way you are. Always competent, yet always learning, always growing. Commit to making the lost of yourself and you will find that flaws will fade away.

WARNING: A preoccupation with eliminating flaws invites self-absorption, whereas recognition and reconciliation with shortcoming promotes a healthy and powerful humility that liberates you to move forward.

TRY THIS: Make a mistake on purpose. Commit an error that detracts from your effectiveness. Investigate where that leads you.

• Drive the wrong way to work so that it takes twice as long. Find out what you appreciate about the new route and extended travel time.
• Turn to the "wrong" section of the newspaper, something you normally wouldn't read. Scan the headlines and discover something cool you never would have found before.

Kevin Kelly's Cool Books - Part I

Kevin Kelly of Whole Earth Catalog and Wired fame, has a blog that so lives up to its name called Cool Tools. He highlights all sorts of things that can help make your life easier ranging from silicone spatulas to longer term car rentals in Europe.
Kevin says he is going to be devoting the week to books:

While I gather more and more of my conceptual trends from blogs, and still remain an unabashed magazine junkie, there is nothing like a book to frame and surface the deeper news. The longer cycle of reflection demanded by the full rhythm of a book allows bigger questions to be asked and hopefully answered.

His first recommendation yesterday was John Battelle's The Search.

This morning he posted his second selection -- Edward Castronova's Synthetic Worlds.

hackoff.com

I am currently reading a book that I am not sure will be reviewed as a Jack Covert Selects because the book is actually a murder mystery with a business favor. But I like the book a ton, in more ways than one. For one, the bloody thing weighs a ton, OK actually 2 ¼ lbs. But it feels like a ton considering I have been carrying it back and forth to home in work for the past two weeks. That is very unusual for me because I seldom take business books home. The book is also very unique because of its marketing plan. The author is giving the book away on the web. He has almost as many blogs as we do. His main blog is now one of my morning reads. He is also not interested in having the book published by a mainstream publisher. He has a special offer for a signed book when it is published in March.

hackoff.com is about an entrepreneur who is a real character, he was arrested in the early 90s for hacking into banks' computers to show their vulnerability. After being released from jail, he started a consulting company and then created a company called Hackoff.com in 1996 which went public during the go-go years. He is found dead in his office in 2003. The book is the story of the IPO and his life from a paper billionaire until the collapse of the bubble. If you are interested in a long, well written, fly-on-the-wall view of the growth and decline of a business with some remarkable characters, this book is for you.

Radio Coverage

Late last week, Jose and Thomas of Lockjaw Radio highlighted some pieces of the 800ceoread empire.

Download their latest episode and skip ahead to 20:43 to hear all of the cool stuff they have to say about inBubbleWrap and ChangeThis.

Thanks so much, guys!

Next Sales Training, Use Green Eggs and Ham

In the weekend edition of the Wall Street Journal, editor Tunku Varadarajan called Green Eggs and Ham "indisputably the finest American children's book". He says what makes it so special is how is seems to capture the American Way.

The second way to interpret the book is as a celebration, albeit a mischievous one, of two particularly American traits: salesmanship and openmindedness. Sam-I-am is the consummate entrepreneur, although clearly, he does not believe in the soft-sell. He is convinced of his product's attractiveness, and the evangelism of his pitch is evident. He wants the Protagonist to "see the light." However annoying one might be tempted to find Sam-I-am, he retains our sympathy for as long as his interlocutor refuses to try his product. How could he know that he doesn't like green eggs and ham? Has he tried them? Why won't he try them? What if we all refused to do things simply because we haven't done them before?

Project Management 1975-style

In a prior life, I worked as a project manager on a large enterprise software project. I was brought in as the functional guy on the project. I had no experience really in IT outside of building a Excel spreadsheet. As we were starting the project, we brought in a project management trainer and one of the first things he talked about was Brooks' law -- Adding people late to a software project makes it later.

In the recent leadership issue of Fortune, Daniel Roth interviews the Fred Brooks. Fred worked at IBM and managed the development of the System/360 computers and OS/360 software. In 1975, he published a book called The Mythical Man-Month, where he details all of the things he learned.

One of the interesting things about the book is the wide acceptance it has found outside the software community. Brooks says in the Q&A:

Surprisingly enough, a partner in a big law firm said, "Oh, this describes our practice." I've had physicians say the same. It's really about people and people in teams: the communications problems, the scheduling problems, the estimating problems.

Richard Pachter's Best Business Books of 2005

I know we are getting into the New Year, but I thought I would share one more best of list. You have seen me quote Richard Pachter before. He writes reviews for the Miami Herald.

Here are his 2005 favorites:

• Revolution in the Valley by Andy Hertzfeld
• Blink by Malcolm Galdwell
• A Whole New Mind by Dan Pink
• Meet You in Hell by Les Standiford
• Think Big, Act Small by Jason Jennings
• Darknet by J.D. Lasica
• Tom Peters Essentials (Design, Leadership, Talent, and Trends) by Tom Peters
• The Search by John Battelle
• The Game by Neil Strauss
• The Untied States of America by Juan Enriquez

Additional Recommended Finance Reading

We believe, of course, that every manager should read Financial Intelligence. However, as we said in the book, a good manager shouldn't just look at the numbers to understand his or her business. So, here are a few books we recommend to round out your reading list:

• A Stake in the Outcome -- What can go right and what can wrong in small, closely held businesses when equity is shared broadly.


• First, Break All the Rules -- One perspective on what people really look for in a workplace and what makes a company great to work for.


• Good to Great -- What it takes to be successful in the long term. We especially love the hedge hog concept.


• Small Giants -- A look at successful entrepreneurs who care more about success and lifestyle than revenue and growth.


• The Discipline of Market Leaders -- An understanding of the strategy behind some of the biggest and most successful companies in the last 30 years.


• The Goal -- Introduces revolutionary concepts related to managing a manufacturing company. Goldratt’s project management finance philosophy mirrors our own.

If you want to read more about finance, then try the books listed below. We've included a few about a concept called open book management, an approach to managing a company that has to do with the numbers, as well as with communication and education, and is in alignment with our philosophy.

• Great Game of Business -- The philosophy and elements of teaching everyone about the numbers, sharing them on a regular basis, and sharing equity. Some would say this is true financial transparency.


• Maverick -- An even more radical approach to opening the books, including salary information and performance reviews. Not for everyone, but the employee manual at the end of the book is worth the read.


• Open Book Management -- Great insights and stories about successful companies that opened the books.


• Relevance Lost -- An explanation of why managerial accounting has gone in the wrong direction in the last 50 years.


• The Interpretation of Financial Statements -- A look at how great investment thinkers of our time looked at financials. Buffett looked to Graham as his financial mentor.


• The Warrant Buffett Portfolio -- Lots of financial analysis, so it isn’t for everyone. But great insight into how Buffett thinks and invests.

Finally, if you want a good financial analysis text (if you really want to get in depth into the subject of finance), we recommend the book below. However, there are many more good ones out there.

Corporate Finance by Ross and Westerfield

Thanks

It has been great sharing our thoughts with you today. Feel free to contact either one of us through our websites, either www.financialintelligencebook.com or www.business-literacy.com.

A Case Study: A Business Literacy Transformation

Joe and I are owners of a consulting firm called the Business Literacy Institute. We work with mostly large companies, providing business literacy consulting and training products and services. All of our work is customized, so every program we deliver is different. The topics we teach, and the numbers we focus on, are based on the needs of the client. For some clients, we are in their catalog of courses, teaching Finance for Non Financial Managers once a quarter or so. For others, we develop programs for specific needs within an organization. In some cases, we help create a business literate workforce, creating programs for every level in the organization.

The work we did for one particular client was especially interesting because it resulted in an organizational transformation. The name of the company has been changed.

In the early 1990's a new regional vice president arrived on the west coast for ODS, Inc. She had worked in smaller regions and assumed that the work she did there would apply to this larger region. She quickly learned, however, that she couldn't connect with each individual, there were just too many. And then came the biggest shock of all—a union attempt. Although the union was not voted in, the vice president took it as a message from employees that they felt disenfranchised. Yet she knew that their teamwork and commitment were keys to long-term success. She came across the idea of business literacy, which fit with her philosophy that employees should be partners in success, and fit with ODS Inc.'s philosophy that employees are a competitive advantage. ODS Inc. already offered a strong salary and benefits package (including profit sharing). However she knew that creating a company of business people meant more than pay and benefits.

The first step at ODS Inc. was to conduct an assessment to determine employees' current level of understanding of the business. The assessment revealed, among other things, that:

• Employees didn't understand the information already being shared, although management assumed they did.


• Employees believed that their work had little impact on the success of the company.


• Middle management couldn't identify or define the organization's key numbers.

These and other findings informed the development of a business literacy program entitled "You Are the Difference," consisting of a classroom training program, Money Maps, and a communication and reinforcement process. Everyone in the organization attended a ½ day training session that included ODS Inc.'s philosophy, strategy, income statement, and key measures. After the training, managers began holding weekly meetings, setting short-term "line of sight" team goals, and posting and discussing financial results.

Today, ODS Inc. is a different organization. The word "employee" is no longer used. Everyone is a business partner. (At one branch the employees took it upon themselves to order new parking signs so that the word "employee" effectively disappeared from the facility.) Customers send e-mails to managers, using the phrase "business partner" as they describe the high level of customer service and professionalism. Profitability has risen without an increase in sales. EVA (economic value added) results have jumped to new levels. Vehicle and worker compensation costs are down. Profit sharing is at its highest ever. And, just as important, trust has increased, turnover decreased, and morale improved.

Why Do We Need ANOTHER Finance Book?

So, why did we write this book? There are a few reasons, but first and foremost, because we are true believers in what we call business literacy. We believe that everyone in organizations should understand how financial success is measured and how they make an impact. Joe comes from a more operational perspective, seeing first hand how when everyone understands the numbers, better decisions are made and the business is more successful. Karen comes from more of organization development perspective, seeing the qualitative benefits of business literacy – trust improves and motivation and commitment improve because you are treating everyone as an important part of the businesses success. So, we wanted to share our passion.

The second reason is that we felt there wasn't a book out there that was targeted directly at managers. Our firm, the Business Literacy Institute, received calls all the time asking for a recommendation for a book that a manager could read to learn about the financial side of the business. And we never found one that we loved. Some are written by accountants, and so, of course, come from that perspective. Others are focused too broadly, including general business issues as well as finance topics.

Finally, we wanted to share a key element of finance that we felt was not broadly understood, that is, that finance is an art as well as a science. So many times in organizations the accounting and finance professionals present the financial results as hard numbers, true facts, and indisputable. The fact of the matter is many numbers in financial reports are based on estimates and assumptions.

Our Translation of Sarbanes Oxley

If you step back for a moment from the specifics of Sarbanes Oxley (fondly also known as Sarbox or just SOX) and look at the big picture, the goal of the law is financial transparency. Financial transparency is the exact opposite of what Enron, Worldcom and others did. They hid the actual performance of their company from the public. Financial transparency, on the other hand, means that a reasonable investor, shareholder, and employee can review the financial statements of a business and really know what is going on. A financially transparent company wants all those interested to understand their financial position because they believe that making things clear in the financial statements leads to a stronger business. And managers and leaders in today's organizations are on the front line of creating financial transparency. It supports good business decisions and it is good business practice.

But financial transparency isn't just about numbers. It is also about ethics and accountability, and about communication and education. Financial transparency helps to address these two key issues inside a company:

• Employees must trust that management is telling them the truth, and


• There must be a common language used throughout the organization to talk about the business.

Effective corporate financial transparency can help to transform an organization around these issues. When employees, managers and leaders understand how the company makes money, how it measures financial success, and its current results and goals, trust increases and communication improves. Employees see that their work makes a difference, and managers and leaders have the opportunities to talk about the current situation and how their department or area of responsibility can make a difference in improving the results. Financial transparency, which consists of educating everyone about the numbers and then sharing the numbers on a regular basis, creates a trusting environment and a common language.

We believe that financial transparency truly does mean there is less likelihood of another Enron. It is interesting to note that virtually all of the corporate scandals were uncovered by an employee inside the company, someone who understood finance and accounting, saw that something was wrong, and spoke up.

Here is an example of a frontline employee understanding the policies of the company, and speaking up.

And here is just a little bit of background on the person who "blew the whistle" at Enron.

The Hot Topic in Finance

Yes, there are "hip" and "hot" topics in finance, including the key numbers to watch when assessing public companies. And there has been an interesting transformation over the years regarding what numbers were "hot." In the late 90's, 2000 and 2001, the key financial number everyone watched and talked about was EBITDA (earnings before interest, taxes, depreciation, and amortization). Wall Street looked for EBITDA to determine the health and potential of a company. Banks had EBITDA covenants in their corporate loan documents (some still do). EBITDA was even the hip topic of discussion at cocktail parties in the financial district.

But after the financial fraud of the late 1990s and 2000s, EBITDA is no longer the number to watch. The focus has shifted to numbers related to cash flow, with many public companies now reporting free cash flow, even though it is not a requirement to do so.

Why the change? First, Wall Street, bankers and others realized that EBITDA was easy to manipulate. Companies that were monkeying with their books simply capitalized operating expenses (expenses that normally would be charged off in the current period were instead depreciated over several years). The move made companies' EBITDA number look better, thus getting more favorable attention. Obviously, much of this constituted the fraud we have read about, and WorldCom is the poster child for fraudulent expense capitalization. Lately, EBITDA lost its position as the key number on Wall Street because it could no longer be trusted.

Second, cash is also a lot harder to fabricate than profits. Cash is what is in your bank account. That is pretty easy to verify. Investors and bankers watching over these corporations felt a bit safer looking at cash.

And finally, and maybe most important, cash is really the key element in a healthy and growing business. Warren Buffett, possibly the most successful investor, focuses on cash; and in particular on the measure he calls owner earnings. His cash-based analysis has led to 40 years of successful investing, and now Wall Street and other investors are seeing the light.

For more information about free cash flow and owner earnings, check out these sites:
http://www.investopedia.com/terms/f/freecashflow.asp
http://www.investopedia.com/articles/fundamental/03/091703.asp
http://www.investorwords.com/2084/free_cash_flow.html
http://www.buffettsecrets.com/owner-earnings.htm

You can see that The Motley Fool commented on the fact that in 2002, analysts weren't looking at it as much as they should.

Financial Intelligence -- Good Morning

Good morning to everyone. First, we’d like to say thank you to Jack and Todd at 800-CEO-READ for asking us to host the blog today. As the authors of Financial Intelligence, A Manager’s Guide to Knowing What the Numbers Really Mean, we are excited to share with you more information about financial intelligence and about creating a financially transparent organization.

To start, we’d like to share with you our paths to our philosophy, that everyone in organizations should understand how financial success is measured and how they make an impact. Karen took the academic path. It all started when she noticed that CEOs and others would always say that everyone in the organization was important to success, but they rarely told employees how they impacted success or even how success was defined. So her Ph.D. dissertation focused on that issue. And from there, she founded the Business Literacy Institute, a firm dedicated to teaching employees, managers and leaders about the financial side of the business.

Joe’s path was on the practical side. After earning an MBA from UC Berkeley, he worked at Ford Motor Company and a few others before joining a start-up business, Setpoint Inc. The two other owners of Setpoint had some bad experiences as engineers – being asked to do things that just didn’t make sense to them. When the two engineers founded this company, they decided everyone would understand the ‘whys’ of decisions, and even include employees in the process of managing the financial side of the business. Joe became the person who taught everyone about the numbers, and created the system that they use to this day to share the numbers and talk about the business every week with all employees.

Throughout the day we’ll be posting information about finance that we hope will help you lead, manage and work better.