800-CEO-READ Blog

Two New Fables Break-up Summer Bestsellers Club

After a summer of same-old, same-old on the Wall Street Journal Business Bestseller List, two new books appear this week signaling the start to the fall business book season.

Given some of my comments recently, it serves me right that I have to report both titles are business fables. Pat Lencioni returns with his sixth story-based book, titled The Three Signs of a Miserable Job: A Fable for Managers (and Their Employees). The second book, Dream Manager, is from previously published, but new business books Matthew Kelly.

We have had these two books featured, along with Juggling Elephants, on the front page for a couple of weeks, which makes us seem like we can foresee the future (hold the email, we do not have any such ability).

Jack reviewed Dream Manager this month and our new writer Jon gave a nice summary of Three Signs if you are interested in following the crowd to these new books.

Colbert/Keen Bout

Stephen Colbert brought Andrew Keen, author of The Cult of The Amateur, onto to the show last week.

The normal verbal melee ensued:

link for the RSS folks

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Super Crunching Podcast

There are 19.3 megabytes of Super Crunching audio just waiting for a listen over on our podcasts blog.

If you prefer text, Newsweek has 511 words on Ian Ayres as well as 1,040 words excerpted from the book.

Jack offered his 537 word endorsement of Super Crunchers last week.

Books via camels and mules

Earlier in August Kevin Kelly blogged a unique book mobile service. Two such services deliver books to the readers in the remote areas of Venezuela (via mule) and Kenya (via camel).

Meet a Venezuelan bibliomula:

And a Camel Book Mobile in Kenya:

These mules and camels are sometimes the only access remote communities have to books. And books are not all they provide. The two organizations that run the book mobiles have big plans for the future.In Venezuela:

As the project grows, it is using the latest technology. Somehow there is already a limited mobile phone signal here, so the organisers are taking advantage of that and equipping the mules with laptops and projectors. The book mules are becoming cyber mules and cine mules. "We want to install wireless modems under the banana plants so the villagers can use the internet," says Robert Ramirez, the co-ordinator of the university's Network of Enterprising Rural Schools. "Imagine if people in the poor towns in the valley can e-mail saying how many tomatoes they'll need next week, or how much celery. The farmers can reply telling them how much they can produce. It's blending localisation and globalisation."

Super Crunchers - A Story Continued...

One story line in Super Crunchers is that of Dick Copaken and his secretive company Epagogix.

Copaken thinks that neural networks can improve scriptwriting in Hollywood. Most of his clients don't want the world to know what he is doing or that they are paying for it.

Malcolm Gladwell changed that in October 2006 when he made Copaken a subject of his article titled The Forumula: What if you built a machine to predict hit movies? Read the piece. It is brilliant.

Super Crunchers picks up where the article left off.

Epagogix's neural equations have also let studios figure out how to improve the expected gross of a film. The formula not only tells you what to change but tells you how much more revenue that change is likely to bring in. "One time they gave us a script that just had too many production sites," Copaken said. "The model told me the audience was going to be losing its place. By moving the action to a single city, we predicted that they would increase revenues and save on production costs."

Epagogix is now working with an outfit that produces about three to four independent films a year with budgets in the $35-$50 million range. Instead of just reacting to completing scripts, Epagogix will be helping from the get-go. "They want to work with us in a collegial, collaborative fashion," Copaken explained, "where we will work directly with their writers...in developing the script to optimize the box office."

Now, Copaken hangs out with agents, studio executives, and even hedge fund managers. The story starts on page 144 and is an update to the original New Yorker piece.

Jack Covert Selects: The Dream Manager

The Dream Manager by Matthew Kelly, Hyperion, 176 pages, $19.95 Hardcover,
August 2007, ISBN 9781401303709

Pat Lencioni has created a franchise by writing well-written, easy-to-read fables about business. His books feature subjects like meetings, team building and silos at work. Many authors have tried to duplicate what Lencioni has mastered, but most have been done wretchedly.

But with The Dream Manager, storyteller and inspirational speaker Matthew Kelly has written a book worthy of Lencioni (who also wrote the forward).

First, he presents a warning:

BusinessWeek reports that, over the next ten years, 21 percent of top management and 24 percent of all management jobs across all functions, regions, and industries will become vacant. Add to this trend an aging population, a shrinking workforce, and a growing intolerance for the illegal immigrant population that provides much of the unskilled labor in the United States today, and you have a talent and labor crisis of enormous consequence across all disciplines--from the highly skilled to the completely unskilled.

Kelly addresses this future crisis though his fable about one company's issue with turnover. The company is a commercial cleaning service. The company has just over 400 employees and a turnover of over 400% per year. The company decides to ask the employees why people are leaving, and are surprised to learn that the main issue is transportation. People simply couldn't get to work. The company creates a shuttle bus service--which costs them twelve thousand dollars per month--that runs to and from four main areas. The results are immediate. Employee's attitudes improve and turnover improves by over 400%.

But the company still has 240% turnover after a year and many other problems that cause the company to hemorrhage revenue. In confronting the reality that an undedicated workforce has an effect on the bottom line, senior management suspects that the problem may be that the employees don't see a future for themselves. They are living every day just to survive. In other words, they have no dreams. After much wrangling, they create a position called "Dream Manager," whose sole job is to meet with the employees and help them think about and realize their dreams. These dreams range from owning a house to learning English.

After three years of the Dream Manager Program, the company finds the amount of sick time people took is down 83% and lateness was no longer an issue. The amount of cleaning materials used declined as the employees got more efficient. The book, of course, has a final chapter called "Getting Started--Applications and Tools," so you can "try this at home," just as we will here at 800-CEO-READ.

links for 2007-08-25

• No Man's Land >> Inc. Magazine | "Welcome to No Man's Land"
  "Welcome to No Man's Land. Few firms make it to the other side. But it doesn't have to be that way. A conversation with Doug Tatum."
  (tags: businessbooks smallbusiness entrepreneurship growth)
• How Life Imitates Chess >> Portfolio Magazine | Garry's Gambit
  If retired jocks can write insprational books, I see no reason to exclude retired chess luminaries from the field of management advice, and perhaps xecutives will find Kasparov's prescriptions useful.
  (tags: management)
• More Books to Read >> Portfolio Magazine | Also Worth Read...
  Extraordinary Circumstances, Super Crunchers, Golfing on the Roof of the World, A Demon of Our Own Design, The Clarks of Cooperstown, Confessions of a Wall Street Shoeshine Boy, Power Play
  (tags: bigidea biography fiction)
• Deluxe >> New York Times Book Reviw | Devil Sells Prada
  Hijacked, over the past two or three decades, by corporate profiteers with a “single-minded focus on profitability,” the luxury industry has “sacrificed its integrity, undermined its products, tarnished its history and hoodwinked its consumers.”
  (tags: industry)

The Value of a Good Story

How many times have you retold a good story? Likewise, can you recite the notes you took at last week's meeting? I am betting that's a bit more difficult. Without getting into a lot of psychology, cognitive learning theory, and memory discussion, I think most can agree that a good story sticks. We use our imaginations to create visual scenes and characters, and getting to "know" these people and places, the things those characters do and think, and the places they happen in, plays a huge role in our understanding of the ideas involved. By involving our imagination in the process, we actively apply these events to our own lives and experiences.

Patrick Lencioni's new book, The Three Signs of a Miserable Job is a fable. It also has a condensed version of the main points of the book at the back, after the story. I've debated with folks in the office about this format. Some wonder, "Why have the fable at all?" implying that the author should have only published these main, concise points, so that managers and executives can digest them, apply them, and move on.

There's a point there, certainly. But here's where I see the bigger picture, and Lencioni's smart application of the content. The subtitle of the book is "A Fable for Managers (and their employees)." Lencioni presents a well-written, interesting, and relatable story that teaches managers some (not so new, but important) principles about management, but he also tells the general employee a good story about analyzing their workplace and their role within it. How many people right now are living in the same complacent, go-nowhere world that Lencioni describes with some of the characters in his book? Probably more than we'd like to think. Reading this story could help people understand the positive changes that could take place, those hopeful possibilities. They might have a conversation with their manager they never would have had previously. The book might even make them consider their purpose, identify their goals, and work toward a higher position in order to accomplish some of these new ideas they've learned. Or, it might make them realize that it's time to look elsewhere. After all, life is short, and we spend more time at work than anywhere else. But, you'd never consider this if you figured things were the same everywhere, and that your skills would never take you beyond your current position.

Likewise, how many managers think they're doing what their superiors expect of them, but are really missing the mark in the grand scheme of things - for themselves, their employees, and their companies? This book clearly addresses that issue, and explains the solution, through examples and insight - cause and effect scenarios of everyday business life that all can identify with, no matter the size of your firm.

I think there exists a stereotype that only business people read business books. But there are a lot of people who work at businesses that see themselves separate from this group. With Three Signs, Lencioni offers a book that everyone can benefit from: managers, CEOs, and general employees who are hopefully still looking for ways to make their lives better. It's these types of books that can take business thought beyond the typical audience, and inspire the minds of a much broader range of the workforce. I don't mean to imply that the book is fluff, either. Writing a story involves more work and creativity than reporting facts and data, and Lencioni does both here, quite well. Managers should appreciate this - a book that their whole team can learn from, themselves included.

But, if you feel the fable is too much for you to read, simply head to the back of the book, and get your quick fix of insightful business ideas. For those of you who take this route, you're missing out on a great opportunity to exercise your imagination - a point the book strongly demonstrates the benefit of in content and format.

Jack Covert Selects: Super Crunchers

Super Crunchers: Why Thinking-By-Numbers is the New Way to be Smart by Ian Ayres, Bantam, 272 pages, $25.00 Hardcover, August 2007, ISBN 9780553805406

Computer technology has had an undeniable impact on our decision-making. Netflix can recommend a movie and eHarmony will recommend a mate. All of this is based on custom formulas and using a mathematical tool called regression to predict what (or who) you will like. Capital One uses regression to determine what interest rate might tempt you into accepting an offer. The Internet radio service Pandora brings in musicians to analyze music so that when you pick a favorite artist on their site, they can play tunes that sound similar. The journey from punch cards to petabytes has given rise to a whole new set of capabilities and Ian Ayres gives a great snapshot of the current state of digital decision-making in his new book, Super Crunchers.

One tool Ayres talks about is randomization. The medical community uses randomization extensively in the testing of new pharmaceuticals. Larry Katz, a former chief economist for the Labor Department, found that by providing job search assistance to the out-of-work, people found jobs faster and the federal government could reduce payment of unemployment benefits by two billion dollars. The same type of number crunching can even be used to prove if basketball players are shaving points at the end of game to cause their team not to cover a point spread.

One of the more unusual and innovative ways computer number-crunching has been put to use comes out of Hollywood. Dick Copaken, formerly a successful Washington lawyer, set his sights on the movie industry. In particular, he and his mysterious team at Epagogix study the effect a script has on box office returns. The folks at Epagogix have come up with a number of components in a script that they have "weighted" and applied certain dollar amounts to. The formula is secret, but unbelievably accurate, and several studios are quietly using their services.

Not everyone is jumping on board though. Ayres tells a story of Copaken arranging a meeting with two hedge fund mangers and a studio head. The hedge fund managers were interested in putting strong financial backing behind a few movies, requiring that Epagogix's formula be applied to the optional scripts. The studio head, fearing he'd lose his standing in the industry if he did something so radical, declined the money and opportunity. The hedge fund managers, surprising Copaken, were delighted with the meeting. They told him: "what you just showed us here in Hollywood is a ten-lane paved highway of opportunity. It's like they are committed to do things the wrong way and there seems to be so much energy in the culture and commitment to doing it the wrong way, it creates a fantastic opportunity for us that is much more durable and enduring than anything we've ever seen."

Ayres' main point is this: intuition is great, but our decision-making can be enhanced by using the combined experiences of thousands or millions of events. Super Crunching lets us see things we normally couldn't. We should think of these computational tools as looking through a telescope rather than being sold snake oil. Super Crunchers is one of those books that lifts the veil and exposes just how technology and data can and does affect your day-to-day.

Jack Covert Selects: All the Tea in China

All the Tea in China: How to Buy, Sell, and Make Money on the Mainland by Jeremy Haft, Portfolio, 224 Pages, $25.95 Hardcover, June 2007, ISBN 9781591841593

Jeremy Haft does not believe that China is the evil empire. He believes instead that China represents a boom for business. All the Tea in China tells how Haft learned to do business in China and practical advice on how to tap into this growing market. Every page is ripe with anecdotes revealing how he believes Chinese business culture operates:

Thousands of years of Chinese jurisprudence, then, dealt solely with punishment of crimes, meted out by fiat. There is an old saying in China: 'Heaven is high, and the emperor is far away.' Meaning: 'Do whatever you can get away with.' Despite the best efforts of China's government to adapt to a system ruled by laws, this lawless attitude is still commonplace in China business practices today.

And from there he delves into the meat of doing business in China. Included in the book are chapters on: Getting Started, Reading the Market, Orienting Yourself, Buying from China, Selling to China and Competing with China.

Unlike some of my favorite books on this subject, such as The Travels of a T-Shirt in a Global Economy, which tells an outstanding story but isn't a guide to business, this is a book loaded with practical take-to-the-bank advice. Not to say that All the Tea in China is without its levity and spirit, though; in fact, what really sets the book apart is the author's sense of humor. Stories of factories that disappear during the night, of factories he was told complied with all the requirements but, when he visited, had no roof, or of international standards and practices ("Do you use GAAP? Sure, I wear their khakis").

Books on China are a dime a dozen, nowadays, but Haft's All the Tea in China is one of the best of the bunch.

links for 2007-08-23

• How I Became a Quant>>Finance by the Numbers | The Wall Street Journal
  Now the term is proudly embraced, as demonstrated by "How I Became a Quant," which collects 25 mini-memoirs of academics who successfully made the jump to Wall Street. Quantitative finance might have lost a little of its luster in recent weeks with the su
  (tags: businessbooks economics finance)

Reading For Firm Founders

The Small Business Special Section of Monday's Wall Street Journal featured recommended reading from Nitzan Shaer, entrepreneur-in-residence with IDG Ventures in Boston. The focus of his recommendations was to show entrepreneurs where they might look for inspiration to stay focused and preserve.

Here are the books and resources he recommended. Click through on the WSJ link to read Shaer's comments.

• Long Walk to Freedom by Nelson Mandela
• The Lessons of History by Will Durant and Ariel Durant
• The Innovator's Dilemma by Clayton Christensen
• Crossing the Chasm by Geoffrey Moore
• The Last Lion: Winston Spencer Churchill: Alone: 1932-1940 by William Manchester
• Shackleton's Way by Margot Morrell and Stephanine Capparell
• Mao's Last Dancer by Li Cunxin
• TechCrunch
• Apollo 13 (the movie)
• An Inconvenient Truth (the movie and the book)

Fall preview: The Art of Woo

When the entire office completed our StrengthsFinder 2.0 assessments, we were quite surprised by some of the strengths that emerged. We expected certain outcomes; for instance, Kate had "achiever," Todd had "futuristic." But everyone nearly fell of their seats when Jake, our former shipper and receiver and now customer service rep, told us that "woo" was one of his top five strengths.

According to StrengthsFinder*, "woo" stands for "winning others over." If you're a woo-er, "you enjoy the challenge of meeting new people and getting them to like you....Not only are you rarely at a loss for words; you actually enjoy initiating with strangers because you derive satisfaction from breaking the ice and making a connection."

Diving deeper into the description, it made sense to us that our vegan, fro-sporting mover of books possessed these qualities. It's funny--perhaps we had an old-fashioned, Austen-esque notion of "woo" in our minds, of the suave hero winning over the stubborn yet vulnerable heroine.

Given the great success of Gallup's online assessments, it's really no surprise that I received an October title called The Art of Woo: Using Strategic Persuasion to Sell Your Ideas, by G. Richard Shell (Bargaining for Advantage) and Mario Moussa.

Shell and Moussa define woo as:

It is a relationship-based persuasion, a strategic process for getting people's attention, pitching your ideas, and obtaining approval for your plans and projects. It is, in short, one of the most important skills in the repertoire of any entrepreneur, employee, or professional manager whose work requires them to rely on influence and persuasion rather than coercion and force.

The Art of Woo lays out a step-by-step plans for identifying and using a persuasion technique to carry out a strategic initiative. For instance, one way to persuade might be to "Put Your Heart into It" -- show that you truly believe in what you're saying. Or, you might "Build Bridges with Analogies and Metaphors" -- make decision-making easier by illustrating a point with a story or concept your audience is already familiar with. The authors introduce six other persuasion pathways to success.

The book also includes the authors' own stories of advising leaders, as well as stories about famous people--Nelson Mandella, John D. Rockefeller, Bono--who used the strength of woo to accomplish extraordinary feats.

*The StrengthsFinder version of "woo" actually appeared first in Now, Discover Your Strengths by Marcus Buckingham and Donald Clifton. We just happened to find out that Jake is a woo-er through the StrengthsFinder 2.0 assessment.

Ending

From Robert Townsend's classic book Up The Organization comes this beauty. For those of you that haven't read the book or forgotten it, it has short alphabetical chapters and the chapter called "Killing Things, V.P. in Charge of" comes:

It's about eleven times as easy to start something as it is to stop something. But ideas are good for a limited time--but not forever.*

* Dr. Robert Sobel, Associate Professor of History at Hofstra University says that the British created a civil-service job in 1803 for a man to stand on the Cliffs of Dover with a spyglass. He was supposed to ring a bell if he saw Napoleon coming. The job was abolished in 1945.

What Have You Been Reading?

Happy Monday!

Milwaukee is rainy and overcast as it was much of the weekend. The weather is reminiscent of early fall rather than mid-August.

With many summer vacations taken, we thought we would ask people what they have been reading. If your beach bag contained a business book, that's great, but feel free to share whatever titles had your attention.

More of Zook and Others

I have found some supplemental reading to our recent Unstoppable podcast. Chris Zook (Unstoppable) has been writing a blog for Harvard Business Online.

The online site has recruited Bob Sutton (No-Asshole Rule, Hard Facts), Sylvia Ann Hewlett (Off-Ramps and On-Ramps), and Michael Watkins (First 90 Days) among others.

links for 2007-08-16

• The Three Signs of a Miserable Job>>The Wall Street Journal | Employed and Unhappy
  In "Three Signs," Mr. Lencioni tackles the question of why so many people are unhappy at work. The issue is a hot one in management-consulting circles, with many companies citing high employee turnover as one of their biggest problems.
  (tags: businessbooks management)
• Gut Feelings >> BusinessWeek | "Why Snap Decisions Work"
  "Gigerenzer is not nearly as clever a writer as Gladwell, a star at The New Yorker, but the new book does serve as a useful and clearly written tutorial on decisions and how to make them."
  (tags: businessbooks strategy)

You Can't Win a Fight with Your Client

Tom Markert, the author of You Can't Win a Fight with Your Boss, yesterday came out with another little book of encouragement and advice, this time for the hard workers who deal with keeping clients satisfied. It's called You Can't Win a Fight with Your Client: & 49 Other Rules for Providing Great Service. Each "rule" is a short entry on how to manage your relationships with clients - large accounts or small.

We pride ourselves on great customer service; in fact, it's one of the few things that makes our company stand out in such a competitive market. So it came as no surprise, as I paged through it, to find that we've already implemented much of Markert's advice. For instance, these three rules resonated with me:

Rule 10: Be a Client Advocate
Rule 28: Speak the Truth
Rule 36: Find Ways to Make Their Lives Easier

I especially liked the entry for Rule 46: Roll Up Your Sleeves.

There is no work that is beneath anyone. If a project needs to get done for a client and there is no one at the right level to do it, then roll up your sleeves and tackle it yourself. Jumping in on a project or task that is not yours demonstrates leadership and commitment.

Your staff will see you doing it and will take in a valuable lesson. And of course the client will have a better experience with the company because the work got done. Everyone comes up a winner.

And in the same style as You Can't Win a Fight with Your Boss, Markert ties in clever ways to present his message: Rule 13: Win Over Frosty; Rule 14: Be Switzerland; Rule 43: Get Sticky.

The Buzz About Business Books

There has been a concentration of interest in business books and their readers over the last month.

• Check out the comments on my Five Business Book Classics post. Some folks have added their selections and others have taken issue with my choices.
• Harriet Rubin had her piece in the New York Times reporting how CEOs tend to read things other than business books. In response, Tim O'Reilly of O'Reilly Books posted a similar sentiment with the books and quotes that inspire him.
• Josh Kauffman at The Personal MBA posted his 2007 update to his list. You can read all about the history in the article BusinessWeek did on PMBA. His list consists of 69 books in 10 categories. His site also contains a blog and forums to discuss the curriculum. If you had trouble getting to the site yesterday, give it another try today.

From Business to Baseball, and Back Again

There are two fields I follow on a daily basis, the baseball and the business. Those two worlds got all tangled up and nicely intertwined in my reading life this past weekend. On Friday, there was a NYT interview with the Sage of Omaha, Warren Buffett, about one of his favorite topics, baseball.

"The most important thing in investing," Buffett said, "is what [Ted] Williams said was the most important thing in hitting" -- waiting for the right pitch.

"What's nice about investing is you don't have to swing at pitches," Buffett said. "You can watch pitches come in one inch above or one inch below your navel, and you don't have to swing. No umpire is going to call you out. You can wait for the pitch you want."

When I got home Friday, I started in on a terrific book by Cait Murphy, an assistant editor at Fortune magazine, who has also worked for The Economist and the Wall Street Journal. With her background in business journalism, the only logical topic for her first book is, of course, baseball. In particular, it's about the greatest single season in baseball history, 1908. It's entitled Crazy '08: How a Cast of Cranks, Rogues, Boneheads, and Magnates Created the Greatest Year in Baseball History. She does throw in a few asides, however, which she calls "time outs". One has to do with a famous murder, another with anarchists, and yet another with the economic panic of 1907.

The first rumblings of this [panic] came with a stock market slump in March. It accelerated with the collapse of a scheme to corner United Copper and became a crisis when New York Knickerbocker Trust failed shortly after the 1907 World Series (surely a coincidence). Reports that other financial institutions might follow suit fed uncertainty into the system, and the virus of dread began to spread.

The causes of the panic might sound obscure, but the consequences were not. A committee tasked in 1908 with analyzing the events described what happened.

"Two-thirds of the banks of the country [had] entered upon an internecine struggle to obtain cash, had ceased to extend credit to their customers, had suspended cash payments and were hoarding such money as they had. What was the result?... Thousands of men were thrown out of work, thousands of firms went into bankruptcy, the trade of the country came to a standstill, and all this happened simply because the credit system of the country ceased to operate."

By October 22, disaster was imminent-and the government had no tools to avert it. The United States lacked a central bank to ensure there was enough money in circulation to keep credit moving, and there was no lender of last resort. The Treasury did pump money into the banking system, but to no avail. So J.P. Morgan stepped in. Probably the second-most disliked business man in America (after John D. Rockefeller), Morgan knew the financial system was in better shape than the reaction to events warranted; it really was a case of having nothing to fear but fear itself. The tide turned when he more or less locked the nation's top bankers in his library and wouldn't let them leave until they had worked out a solution. The worst was over by Thanksgiving, and Morgan enjoyed a brief period when instead of being loathed as a heartless money-grubber, he was hailed as an economic savior.

It's a century later, and although we've strengthened our institutions formidably, we once again have some turmoil in the credit markets. One of the institutions created in the aftermath of the 1907 panic, the Federal Reserve, has been injecting cash into the financial system to bring interest rates down. I'm pretty darned sure the current turmoil isn't going to require locking the nation's top bankers in someone's library, but wouldn't you love to be a fly on the wall of that library, listening in on strategy sessions, if it did?

Where Did The Book Reviews Go?

The most recent issue of Fast Company makes me think the magazine has dropped their coverage of business books.

Booooooo.

A Different Jack Disagrees

It is not unusual for Mr. Covert and I to have many heated discussions, but it is a different Jack that has taken me to task for a recent post.

Jack Hayhow says that I am wrong-headed about my opinion of fables. I recently threw off a couple of lines about business fables in my post on John Kotter and Our Iceberg Is Melting. Let me take a little more time to unpack my thoughts on the genre.

Fables do make business concepts more accessible, and they make them more simplistic in the process.

When I worked at GE, I had a manager who was enamored with Who Moved My Cheese? Everyone in our 75 person group got a copy. Some folks understood the message and others didn't. And the folks who understood the message already knew what needed to be done. The book did not move our group forward.

I can explain a fable in about 30 seconds to someone else and eliminate the need for them to read the book completely. You can't do the same with a normal 200 page book. You can deliver the elevator pitch, but you can't deliver the nuance. And in a good business book that makes all the difference.

I need more out of what I read. I want to know "the why". This is just my preference. I am sure there is some "Top 40 pop" versus "mid-classical" music analogy that could be used here.

P.S. My one exception on fables is Steve Farber's books. Radical Leap and Radical Edge worked for me.

Podcasts Start Back Up with Zook

We took some time off this summer from our podcasts.

I am kicking off the fall season early with an interview I have been wanting to do for some time.

Chris Zook is the author of three books, his most recent being Unstoppable. I talked with him for almost an hour about how to achieve profitable growth through focusing on the core of your business.

I also asked him what books he would recommend to other books. He says there are three different kinds of books he is attracted to:

• The Classics - Chris says there are a handful of books that everyone should read. These are familiar titles: Comptetitive Strategy, Competing for The Future, and Good To Great.
• Business Histories - Chris says there is much to learn from how companies deal with challenges to their business models. He recommends Rising Tide: Lessons from 165 Years of Brand Building at Procter & Gamble.
• A Step or Two Away - sometimes you can learn alot by getting away from the business category. Chris is currently reading In Spite of The Gods, a wonderful history of India. Another title that Chris thinks fits this is James Gleick's Chaos, which took chaos theory research and showed how it applied to what folks deal with every day.

What's up at Freakonomics

Dubner and Levitt have been quite busy this week. On Monday, the NYT welcomed their blog with open arms. If you're a fan of their blog, be sure to change your RSS feed.

Dubner was a guest on Wednesday's Good Morning America. Though the NY storms caused a bit of interference so you can find a text version here. Yesterday, they announced their Q&A session with Mad Money's Jim Cramer. Feel free to submit questions for Cramer to be answered later.

And they invited Arthur Brooks, Tyler Cowen (another economics author), Mark Cuban, Barbara Ehrenreich and Nassim Nicholas Taleb to ponder the economics of street charity.

Enjoy your Friday.

Miscellany

Todd's post on Monday showed that we've referenced Chris Anderson's Long Tail more often than any other title in the past, so we obviously like the book. But what books does Chris Anderson like? Well, he liked David Weinberger's Everything is Miscellaneous enough to write a blurb for it. You may know David as a co-author of The Cluetrain Manifesto. Praise from Chris Anderson off the back cover of Everything is Miscellaneous...

The world is messy, like it or not, and it's only going to get messier as the web destroys rules and rule makers. You can either complain about the chaos and wish for the good old days of order, or you can read this book and understand why delirious disorder will soon make us all smarter.

I took Chris's advice and read the book, and I really enjoyed it. One of my favorite chapters is entitled Social Knowing, in which he discusses the differences between Britannica and Wikipedia.

The trust we place in Britannica enables us to be passive knowers: You merely have to look a topic up to find out about it. But Wikipedia provides the metadata surrounding an article-edits, discussions, warnings, links to other edits by the contributors-because it expects the reader to be actively involved, alert to the signs. This burden comes straight from the nature of the miscellaneous itself.

Give us a Britannica article, written by experts who filter and weigh the evidence for us, and we absorb it passively. But set us loose in a pile of leaves so large that we can't see its boundaries and we'll need more and more metadata to play in to find our way. Deciding what to believe is now our burden. It always was, but in the paper-order world where publishing was so expensive that we needed people to be filterers, it was easier to think our passivity was an inevitable part of learning; we thought knowledge just worked that way.

Increasingly we're rejecting the traditional assumption of passivity. For ten years now, customers have been demanding that sites get past the controlled presentation of "brochureware". They want to get the complete specifications, read unfiltered customer reviews, and write their own reviews-good or bad. [The web site for the movie The Da Vinci Code made a point of inviting anyone to discuss the religious controversy of the film; by doing so, the studio reaped media attention, marketing buzz, and audience engagement.] Citizens are starting not to excuse political candidates who have web sites that do nothing but throw virtual confetti. They want to be able to explore politicians' platforms, and they reward candidates with unbounded enthusiasm when the candidates trust their supporters to talk openly about them on their sites.

In a miscellaneous world, an Oz-like authority that speaks in a single voice with unshakable confidence is a blowhard. Authority now comes from enabling us inescapably fallible creatures to explore the differences among us, together.

For 2,500 years, we've been told that knowledge is our species destiny and calling. Now we can see for ourselves that knowledge isn't in our heads: It is between us. It emerges from public and social thought and it stays there, because social knowing, like the global conversations that give rise to it, is never finished.

There was a fascinating conversation about all this between David Weinberger and Andrew Keen, author of The Cult of the Amateur, that Todd linked to in a previous post. if you missed it the first time around, I'd highly recommend it.

The Perfect Pair: Never Eat Alone and Highrise

Never Eat Alone is a 2005 book written by Keith Ferrazzi. The subtitle "The Ultimate Networker Reveals How To Build a Lifelong Community of Collegues, Contacts, Friends, and Mentors" sums up the book pretty well. We have an excerpt on our site from Chapter 17 - "The Art of Small Talk" and here is a video of Ferrazzi speaking at a Microsoft event.

Highrise is the new contact management product from Chicago-based 37signals. We use the web-based application here at 800-CEO-READ and think it is awesome. Using Highrise has finally pulled everyone together with a common way to see who we know and what is going on.

In the 37 Signals customer forum, there is a post titled Never Eat Alone: Highrise's Companion Book? A couple of users feel the techniques described by Ferrazzi join perfectly with 37signals' software. Check out the post.

I find interesting these ties between software and business ideas. David Allen's Getting Things Done has inspired dozens of independent software developers to create code that mimics the GTD principles. In the paper world, you can look at how well Franklin Day Planners fit with Steven Covey's Seven Habits (so much so the two companies merged).

Five Business Book Classics - The Essay

I wrote a piece for the July/August issue of Corporate Dealmaker. The magazine did eight pages on business books and their impact on the M&A industry. Here is my contribution where I discuss books that should be on every executive's reading list:

And Don't Forget The Classics

There are M&A books, and there are business books that should be required reading for every executive. Here are five guaranteed to help you be more productive and make smarter decisions.

by Todd Sattersten

Books on mergers and acquisitions often take a distinct nuts-and-bolts approach. No mystery there: Deals are complex projects and dealmakers want practical advice on how to execute them. Even for dealmakers, though, transactions are just part of a bigger strategic picture, on where decisions of many kinds are needed. Every executive, dealmaker, or otherwise, is ultimately judged on the quality of the decisions he or she makes, and there's no shortage of books aimed at helping those managers make smart choices. Here are five that should be on every executive's reading list.

1 - "Competitive Strategy" by Michael Porter

If you boil business down to its essence, you are left with two key elements--strategy and execution. Strategy is deciding what direction to go, and execution is how to get there. Michael Porter's "Competitive Strategy" gives us the clearest view of the first element. Strategy is about competition, and prior to the book's 1980 publication, competition was defined as other companies operating in the same industry. Porter's five forces model created a much richer view, adding suppliers, buyers, substitutes, and new players to the definition. Those added dimensions made Porter's work ground-breaking. Without Porters' model, it is hard to see how PC manufacturers' margins quickly shrank in the 1990's. The cause was not competition among industry players, but the superior bargaining power of their two primary suppliers--Intel and Microsoft. In my industry of publishing, substitutes have become the primary source of competition as readers' attention is diverted to other forms of media.

2 - "Execution" by Larry Bossidy, Ram Charan, and Charles Burck

But strategy is only one half of the equation. An organization must be able to carry out the plan and "Execution", released in 2002, is one of the best book out there on the topic. In their book, Bossidy, who spent 40 years running industrial conglomerates, Charan, who provides insights as a guru to Fortune 500 CEOs, and writer and editor Burck mapped out "a system for getting things done through questioning, analysis, and follow-through." Identifying and developing leadership talent lies at the core with the goal not to evaluate people for what they are doing today, but for the positions they will hold tomorrow. Leaders then lay out clear goals everyone in the organization can understand, follow-through to clear internal obstacles, and reward the doers who are producing results. Finally, organizations that understand execution inject a healthy dose of realism into their culture through open, informal dialogue to eliminate false consensus and by making needed changes today rather than waiting for tomorrow for things to get better.

3 - "In Search of Excellence" by Tom Peters and Bob Waterman

"In Search of Excellence", published in 1982 was the result of a McKinsey project started five years prior to find out what successful organizations look like. The authors found that the most effective organizations were those that recognized the irrationality of the humans that inhabited them. Those companies were clear about their beliefs and created a strong value system that acted as a compass for organizational decision-making. Inside companies like Boeing, 3M, and Hewlett-Packard, Peters and Waterman found small, passionate teams accomplishing big, game-changing feats and meetings taking place in hallways as executives exercised management by walking around.

4 - "Good to Great" by Jim Collins

Jim Collins also looked at successful companies in his 2001 best-seller. Using a methodical approach, Collins identified companies that went from average to sustained periods of growth. Walgreens, Pitney-Bowes, and Nucor were among the 11 companies that made the cut and his book's metaphors have become a lexicon for business in the 21st century-the flywheel, BHAGs (big hairy audacious goals), level 5 leadership, to name a few.

5 - "The Effective Executive" by Peter Drucker

Before Stephen Covey's "Seven Habits" and David Allen's "Getting Things Done", Peter Drucker det the standard for books on productivity with "The Effective Executive". Decision-making, playing to your strengths, and "first things first" are all presented with the signature clarity Drucker brought to the study of management.

Todd Sattersten is vice-president of 800-CEO-READ and author of an upcoming book from Portfolio on the 100 best business books of all time.

Excerpt from WATCH THIS, LISTEN UP, CLICK HERE

Yesterday I posted a new excerpt on the Excerpts blog. It's from Chapter 1 of WATCH THIS, LISTEN UP, CLICK HERE by David Verklin and Bernice Kanner.

"This means that we're exposed to an estimated 3,000 ads a day. That's counting highway billboards, posters in trains, buses, and bathroom stalls, commercials in movie theaters, holograms on buildings and taxis, "talking" grocery shelves, and stickers on food (CBS has stamped eggs with ads for its shows). But that doesn't take into account all the bumper stickers, t-shirt slogans, and ads on people's anatomy that we see (yes, Dunkin' Donuts paid college kids to panel their foreheads with messages about great coffee). And that 3,000-ad tally doesn't count the now almost ubiquitous product placements embedded in films, TV shows, and games.

No wonder some are calling this the Age of Interruption. Commercial avoidance has become a high art. Seven out of 10 people wish they could will the ads away. But it's not the advertising they hate as much as the uninvited disruption."

Here's a direct link to the excerpt: http://800ceoread.com/excerpts/archives/007181.html

And the book: http://800ceoread.com/products/?ISBN=978047005643

Excerpt from The Last Chance Millionaire

The following is a brief excerpt from the book The Last Chance Millionaire by Douglass R. Andrew.

The Pitcher of Water Versus the Empty Glass

When I give seminars, this is the moment that I introduce the most memorable visual aids I have ever used. Picture yourself holding an empty drinking glass in one hand and a pitcher containing water in the other. The glass represents your house. For simplicity's sake, let's say it is worth $100,000. It's an asset. Let's say you have $100,000 of cash in the bank (the pitcher) -- that's liquid wealth. The glass is empty because you have not put a penny into your house, but on paper, on a balance sheet, you would still list it as a $100,000 asset. Meanwhile the pitcher of water represents another asset -- $100,000 in cash.

What's the total amount of your assets? $200,000. What happens if you pour the water into the glass? You have reduced your assets by $100,000. You've combined $100,000 in cash to a glass already listed as an asset worth $100,000, and all you have to show for it is $100,000. You have cut your assets in half!

On the other hand, when you separate the liquid cash from the glass-sized house that is free and clear, you double your assets. That's what happens when you separate equity from your house and put it in a liquid investment. But you're not finished. Assume the empty glass-house appreciates at an average of 5 percent a year. After one year, what's the value of the empty glass? $105,000. If you pay off the mortgage on the glass (pour the water -- or money -- back into the house) what is it worth? The same $105,000 -- whether it is mortgaged or it is free and clear -- because equity has no rate of return when it is trapped in a house.

Next, pour the water from the glass back into the big pitcher. You've just removed $100,000 from your house and put it into an investment earning -- let's say -- 10 percent. At the end of the year, how much money will you have in that pitcher? Look at that! It's grown to $110,000! In your other hand is your house, worth $105,000 at the end of the same year, thanks to appreciation.

Leave the water in the pitcher.

How much have you earned by separating your equity from your house in the course of just a single year? $15,000. How much would you have earned if you had left the water in the glass? Only $5,000 -- one-third as much.

"But, but, but -- the mortgage wasn't free! I had to pay some interest." That's right, you did. Let's say the mortgage was at 7.5 percent. That's $7,500 subtracted from $15,000 for a net gain of $7,500, instead of just $5,000. You are still 50 percent ahead than if you had not removed the equity from your house. If the mortgage interest is deductible, then the net cost of the mortgage is really not $7,500, but $5,000 in a 33.3 percent marginal tax bracket. So the net profit is $10,000 ($15,000 minus a net, after-tax mortgage expense of $5,000) -- or twice as much as you made if the house was paid off!

Here's another quick analogy: Would you rather have one horse working for you or two? Can two horses work for you, even if you owe money on one of the horses?

The object of this demonstration is that no matter what else you do, when you separate your equity from your house, you increase your assets. Even though there is a charge for doing that -- the simple interest you pay on a mortgage -- it makes a whole lot of sense to take out a mortgage and use it to make your assets grow.

Do you recall the president of the bank I mentioned at the start of this chapter? What you've just done -- taken out a mortgage and used the money to make more money -- is what he did. You didn't make billions, but you made a profit in the same exact manner. By separating equity from your house, you give it the ability to earn a rate of return. Employ this strategy each year, and the profits will compound.

Copyright © 2007 Douglas R. Andrew

The Last Chance Millionaire by Douglass R. Andrew
Published by Warner Business Books; June 2007

links for 2007-08-07

• On-Ramps, Off-Ramps >> New York Times | Opening the On-Ramp for Women
  "Why is it," the task force asked, "that after decades of creating opportunities for women and proactively nurturing diversity, companies are still struggling with the challenge of retaining and advancing women?"
  (tags: businessbooks organizational_development women)

800-CEO-READ's Long Tail of Interest

I am fascinated by Chris Anderson's The Long Tail. These power law curves exist in so many facets of the world.

We pulled data yesterday on our linking behavior to books on our site and...

...and what do we see again.

We have linked to 1267 books in the last three years and here are the top twenty five most linked to books:

#1 The Long Tail - 31 links
#2 The World Is Flat - 29 links
#3 Battle for the Soul of Capitalism - 29 links
#4 Good to Great - 23 links
#5 Prepared Mind of a Leader - 21 links
#6 Freakonomics - 20 links
#7 Made to Stick - 19 links
#8 Mavericks at Work - 19 links
#9 Blink - 17 links
#10 Radical Edge - 17 links
#11 Purple Cow - 15 links
#12 The Number - 14 links
#13 Brand It Yourself - 14 links
#14 The Wal-Mart Effect - 14 links
#15 Ten Rules for Strategic Innovators - 13 links
#16 Hard Facts - 13 links
#17 Purpose - 13 links
#18 Growing Great Employees - 13 links
#19 Small Is the New Big - 13 links
#20 Whole New Mind - 12 links
#21 No Asshole Rule - 12 links
#22 The Power of Unfair Advantage - 11 links
#23 The Ultimate Question - 11 links
#24 Winning - 11 links
#25 Citizen Marketers - 11 links

Fall preview: Giving Notice by Freada Kapor Klein

We've had a steady flow of advanced copies of fall books. I thought I would go through a few of them, this week, and give you a preview of what's coming. Below is part of a press release that accompanied the book Giving Notice: Why the Best and the Brightest Leave the Workplace and HOW YOU CAN HELP THEM STAY by Freada Kapor Klein, coming out in October.

Klein focuses on the hidden causes that are destroying workplace meritocracy (a system based on rewarding ability and talent). Giving Notice is "low on jargon and filled with common sense approaches to solve the current imbalance" of minorities and women in positions of leadership. This book is one of many we're seeing on the "international war for talent." It also fits nicely into a growing group of books on the current (and ineffective) career model. Using a combination of quantitative research and anecdotal evidence, Klein addresses nation-wide and world-wide biases, unconscious ideas about stereotypes and commonly accepteed business practices, and the economic, corporate, and human capitol costs of the brain drain. From the press release:

Corporate Leavers: What My Employer Could Have Done to Help Me Stay

This revealing survey is based on the Level Playing Field's exclusive Corporate Leaver's Study conducted in January 2007. LPFI began with 19,000 potential survey subjects to yield 1,700 professionals and managers who met our criteria and completed the survey.**

People of Color: Very likely to have stayed if employer had...

• 34 percent: Offered better management which recognized your abilities


• 30 percent: Offered schedule flexibility such as flex time, alternative working hours, or telecommuting


• 29 percent: Offered to pay you more fairly


• 29 percent: Offered a more positive work environment

Gays and Lesbians: Very likely to have stayed if employer had...

• 43 percent: Offered more or better benefits


• 41: Offered to pay you more fairly


• 35 percent: Offered schedule flexibility such as flex time, alternative working hours, or telecommuting

Caucasian Women: Very likely to have stayed if employer had...

• 24 percent: Offered to pay you more fairly


• 20 percent: Offered schedule flexibility such as flex time, alternative working hours, or telecommuting


• 20 percent: Offered more or better benefits

Caucasian Men: Very likely to have stayed if employer had...

• 28 percent: Offered to pay you more fairly


• 20: Offered more or better benefits


• 18 percent: Offered better management which recognized your abilities

The survey also included results that indicated which aspects of work life each group felt more strongly about than their colleagues. It's interesting to see that people value the same things, just in different orders and strengths. Some might say, "we already know this," or "this is intuitive," to which one might respond, "so what are you doing about it?"

**Level Playing Field Institute was founded by Dr. Freada Kapor Klein in 2001. The Institute promotes innovative approaches to fairness in higher education and the workplace.

Today's Quote

If I could get my membership fee back, I'd resign from the human race.

Fred Allen

Riding the Freakonomics Wave.

The WSJ picks on the latest economic books saying they're overlooking a more bedrock rule -- that of supply and demand (free access today). From the WSJ:

In Discover Your Inner Economist, Tyler Cowen, an economics professor at George Mason University, talks readers through economic rationales for dating (flowers work because they are expensive), charity (give to those who aren't asking) and eating well (at expensive restaurants, avoid dishes that rely too heavily on top-quality raw ingredients). But sales of other new titles that aim to explain weird phenomena in economic terms don't bode well for Mr. Cowen's book: More Sex Is Safer Sex, by Steven E. Landsburg, and The Economic Naturalist, by Robert H. Frank, have sold just 12,000 copies combined since their spring releases according to data from Nielsen BookScan, which tracks approximately 70% of retail book sales. Meanwhile, an expanded edition of "Freakonomics," which came out in October, has sold 119,000 copies since January. In his book, Mr. Cowen describes a potential explanation: a marketing principle called "scarcity of attention."

A New Season begins - August 2007 Books

I know it is only a few of days into August, but we are starting to see and think about the fall.

Jack is quoted today in a Bloomburg News story about Dream Manager by Matthew Kelly. He is a little more positive about the book than might be evident from the quote. We'll be featuring it as a Jack Covert Selects this month.

I have been reading a really interesting book called Super Crunchers by Ian Ayres. I am writing a couple of posts now about the book and we'll be reviewing it this month as well.

Here are couple other titles making an August release:

• Recruit or Die: How Any Business Can Beat the Big Guys in the War for Young Talent by Chris Resto, Ian Ybarra, and Ramit Sethi
• What Made Jack Welch Jack Welch: How Ordinary People Become Extraordinary Leaders by Stephen H. Baum with Dave Conti
• Remarkable Leadership: Unleashing Your Leadership Potential One Skill At A Time by Kevin Eikenberry

Comments down

There is a weird error coming up when you try to post a comment right now and leaves you unable to save the comment.

We are working on it and I'll post something when we get it fixed.

Update: They are working perfectly now. We would love to hear from you. :)

Today's Quote

Positive: being mistaken at the top of one's voice.

Ambrose Bierce

links for 2007-08-02

• Discover Your Inner Economist >> The Washington Post | Hire Yourself
  "We may have been Keynesians once, but times change. We are all Freakonomists now."
  (tags: economics economist businessbooks business)