In its premier issue in 1995, strategy+business reviewed five books. One of them was the fifth anniversary edition of Peter M. Senge’s The Fifth Discipline: The Art and Practice of the Learning Organization (Doubleday Currency, 1990), which introduced the concept of the learning organization to a broader audience. This book remains as relevant today as it was when it was first published. That’s no mean feat, given the changes that have occurred in the past 20 years.
Some of the most far-reaching of these changes have occurred in publishing, which has become digital and migrated online. This has created a sea change in the ways that ideas are communicated, the likes of which hasn’t been seen since Johannes Gutenberg invented the printing press 550 years ago.
Some observers are concerned that this change is fundamentally altering not only how we write and read, but how we think — and not altering it for the better. In his new book, a polemic titled The Shallows: What the Internet Is Doing to Our Brains (W.W. Norton, 2010), Nicholas Carr describes how the skimming and skipping that characterize online information gathering actually reroute the neural pathways in our brains. Carr warns that this could cause us to lose the capacity for the kind of mind-focusing “deep reading” that books engender, and the reflection and creativity that result from it.
Whatever the prevailing trend in reading may turn out to be, it is clear from 15 years of book coverage in s+b, written by a host of distinguished reviewers, that there is much to be thoughtful about. Executives who go back to the best books that s+b has covered over the years would gain a valuable source of information and insight. These are the rare books that have expanded the corporate lexicon and changed the way we do business.
Peter M. Senge’s The Fifth Discipline is surely one of the most influential management works of the past two decades. Senge, who founded the Center for Organizational Learning at MIT’s Sloan School of Management, pegged the problems that companies commonly encounter to the inability to adapt to changing circumstances — in his words, to learning disabilities. He asserted (borrowing a theme from Arie de Geus) that organizations that are capable of learning possess a valuable competitive advantage, and went on, in the core chapters of the book, to lay out the now-familiar five components necessary to create such organizations: systems thinking, personal mastery, mental models, shared visions, and team learning.
Paul Idzik, then a Booz & Company partner, reviewed The Fifth Discipline on the occasion of the book’s fifth anniversary. “Senior executives are devoting more of their time these days to fostering a culture of learning within their organizations,” wrote Idzik. “They realize that many of the recurring problems they deal with would be more quickly and productively resolved if they managed and belonged to a learning organization.” That is still true; the organizational learning disabilities that Senge noticed (such as a fixation on short-term events that obscures the big picture) are still very much with us, and the learning disciplines still provide a remedy when practiced.
The list of seminal books that s+b reviewed must also include The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits (Wharton School Publishing, 2005), a paean to the uplifting effect of capitalism on the human condition, by the late University of Michigan professor C.K. Prahalad. This book is so compelling that it was featured as one of the year’s best business books in 2005 in two categories, strategy and globalization.
Prahalad tallied up the 4 billion people who lived on incomes of less than US$1,400 per year, and posited the original idea that they make up a largely untapped market valued at trillions of dollars in aggregate. In their essay on the best business books on strategy, former Booz & Company Partners Chuck Lucier and Jan Dyer picked the book as “essential reading” for four reasons: the emerging market business models it described; the crucial new source of corporate growth it identified; the competitive threat that companies serving the bottom of the pyramid represented; and the likelihood that the low-cost, high-volume models would eventually migrate to developed markets. The Fortune at the Bottom of the Pyramid, they wrote, provided “a rare glimpse into the future — for those with eyes to see — of the extraordinary opportunities waiting in uncharted and seemingly impassable waters.”
A third seminal book covered in s+b’s pages is one whose relevance grows along with the ecological impact of our industrial society. In Cradle to Cradle: Remaking the Way We Make Things (North Point Press, 2002), William McDonough and Michael Braungart, an architect and chemist, respectively, identified the conventional “take, make, and waste” product cycle as a major contributor to our environmental problems. They proposed that human industry be redesigned to echo nature, in which every major nutrient is endlessly recycled.
“Consider this thought experiment, which appears in [the book]: What would it take to run your company the way the Menominee tribe of Michigan runs their forest?” wrote Joe Flower, a regular s+b contributor, who reviewed Cradle to Cradle in his Knowledge Review essay on sustainability in the Spring 2009 issue. “In 1870, the Menominee counted 1.3 billion board feet of standing timber on their 235,000 acres of land. Over the last 138 years, they have harvested 2.3 billion board feet, and now they have 1.7 billion board feet. Neat trick. Maybe you’re not in a resource-extraction industry; maybe your capital doesn’t grow on trees. But isn’t there an equivalent potential achievement in your sector?”
A Global Trend
If books were to morph into shallow, short-form online works, we would miss those titles that take deep dives into the new trends that are shaping and reshaping our world. One of the most far-reaching and implication-laden of these trends has been globalization, and during s+b’s publishing tenure, a library’s worth of books on the topic have appeared. Among the most influential and widely read of them was Thomas L. Friedman’s The World Is Flat: A Brief History of the Twenty-First Century (Farrar, Straus and Giroux, 2005), which Howard Rheingold, a leading observer of the social changes stimulated by technology, chose as the best business book of 2005 in the future category.
Friedman, the foreign affairs columnist for the New York Times, argued that globalization entered a new phase around the turn of the millennium. Whereas Globalization 1.0 was fueled by the drive for empire by nation-states beginning in 1492 and Globalization 2.0 was driven by the international expansion of enterprises starting around 1800, Globalization 3.0 was driven by “the newfound power of individuals to collaborate and compete globally.” This power derived from 10 “flatteners,” according to Friedman, which were all directly related to digital technologies and networks.
Friedman’s flat world explained many of the challenges that companies were facing in a global economy, but business readers had to wait for the publication of Pankaj Ghemawat’s Redefining Global Strategy: Crossing Borders in a World Where Differences Still Matter (Harvard Business School Press, 2007) for a measured, strategic response. In it, the author, a professor of global strategy at IESE business school in Barcelona, takes issue with Friedman’s boundaryless “flat” world. Ghemawat points out that there are still plenty of speed bumps for companies that rush into the global fray with a one-world strategy that doesn’t account for the myriad differences between nations.
The core of the book is devoted to Ghemawat’s CAGE framework, a means of understanding the cultural, administrative, geographic, and economic dimensions of nations and making sure they are reflected in companies’ business strategies. “With its combination of solid data, illuminating case studies, and helpful concepts, this book is an effective antidote to both millennial and apocalyptic visions of globalization,” wrote s+b’s longtime Books in Brief reviewer David Hurst in the Spring 2008 issue.
Managerial Art and Craft
Although many management books might benefit from a shorter format, we wouldn’t want to lose a word of the best of them. The books of Henry Mintzberg, McGill University’s iconoclastic professor of management studies, are terrific examples of the latter category and the career-expanding insights such works can stimulate, especially the concisely titled Managing (Berrett-Koehler, 2009).
Mintzberg has always been more interested in the realities of managing than its theories. In his first book, The Nature of Managerial Work (Harper and Row, 1973), he shadowed five CEOs to see how their daily work jibed with the various theories of management in vogue at the time. In writing Managing some 30 years later, he bookended his body of work with a similar project — this time following 29 managers. This exercise confirmed Mintzberg’s conviction that managers are facilitators, who leverage “the natural propensity of people to cooperate in communities.”
“Management books often make me feel like I should head back to boot camp. But reading Managing, ...I found my own managerial insecurities melting away,” wrote Judith Samuelson, the executive director of the Aspen Institute Business and Society Program, who featured the book in her best business books essay in Winter 2009. “Mintzberg reminds us that most managers are prey to events and demands they do not control, and that a wide range of styles can work well for a boss. Balance is the key: keeping up with the hectic pace of business yet making time for reflection; driving change yet maintaining stability; leading and collaborating; leavening analysis with judgment.”
Larry Bossidy, former chairman of Honeywell International, and Ram Charan, a prolific consultant, are also great proponents of the realist school. In their book Execution: The Discipline of Getting Things Done (Crown Business, 2002), they assert that CEOs have three primary responsibilities: analyzing the business environment and their companies, closing the gap between desired outcomes and actual performance, and, especially, ensuring execution.
In choosing Execution as a 2002 best business book of the year in the leadership category, Bruce A. Pasternack, then a senior partner at Booz & Company, and James O’Toole, a professor at the University of Denver’s Daniels College of Business, noted the book’s emphasis on practical advice on everything from strategy making to plant inspections. “We ended up making pages of useful notes,” they wrote, “and in discussions about the book with clients and colleagues, we noted they are doing the same.”
MIT management professor emeritus Edgar Schein has written a perfect companion volume to the two previous books. In Helping: How to Offer, Give, and Receive Help (Berrett-Koehler, 2009), Schein deconstructed the act of helping, and in doing so created a valuable guide to a task that many managers face, but few truly understand and effectively execute.
“We often ignore [Schein’s] principles amid the daily course of life, taking for granted relationships and exchanges that may not be what they seem. We get lazy,” wrote Charles Handy, a noted management observer, in his review of the best business books on leadership in the Winter 2009 issue. “I found this little book a salutary reminder of too many lapses on my part, while it also explained why some of my well-intentioned attempts to help only led to worsening relationships. Any aspiring leader would do well to review his or her own behavior in the light of this very useful guide.”
Two closely related business book genres that require long-form writing are corporate histories and the biographies and memoirs of leaders. Books of this sort can be sanitized to the point that they become cures for insomnia, but when driven by a spirit of open and honest inquiry, they have the power to compel and inspire.
David Packard’s memoir, The HP Way: How Bill Hewlett and I Built Our Company (HarperBusiness, 1995), traces how the now-famous business partners founded an electronic instrument business in a garage in Palo Alto, Calif., with $538 in capital; their startup grew into a $100 billion global corporation. Published just a year before Packard’s death, the book illuminates a leader’s role in creating and transmitting a performance culture.
The Hewlett-Packard culture was a direct reflection of the pragmatic philosophies of the company’s founders. The cofounders believed in participative goal setting, decentralized authority, and a humane form of accountability that moved employees up until they reached their limits and then moved them around until they found their niches. Neither Hewlett nor Packard had any vision: They just wanted to make a profit making innovative and high-quality machines that addressed their customers’ needs.
And so they did. “Balancing the goals of the company with the realities of the marketplace and the needs of both stockholders and employees is what HP has achieved. It has done this while also producing a series of innovative products, which contributed mightily to business and the country,” wrote Robert Cranny in s+b’s second issue. “The HP Way should be kept in a corner of every office and den. It’s good just to know it’s there.”
Louis V. Gerstner Jr. is another leader who famously eschewed the “vision thing” for pragmatic management — and saved IBM in the process. In Who Says Elephants Can’t Dance? Inside IBM’s Historic Turnaround (HarperBusiness, 2002), Gerstner explains in detail how to restructure a massive organization — radically changing its business model, cutting costs, and reengineering its processes — and remake its culture without flying it into an unrecoverable tailspin.
“There are a few good leaders, and a few good new leadership books,” wrote Pasternack and O’Toole on naming Who Says Elephants Can’t Dance? one of 2003’s best business books in the leadership category. “Louis V. Gerstner Jr. gets the nod on both counts.”
And finally, there is Alice Schroeder’s monumental biography of Warren Buffett, The Snowball: Warren Buffett and the Business of Life (Bantam, 2008), which successfully undertook the delicate task of ferreting out what makes the Oracle of Omaha tick, with his permission. Schroeder’s portrait is especially compelling because she never sidesteps the real Buffett for easy answers. Instead, wrote O’Toole, who selected the book as one of 2009’s best business books in biography, “Schroeder offers us a nuanced portrait of a surprisingly complex and insecure man whose life is full of paradoxes and contradictions.” It’s good to know that even the most successful businessperson of our time is more man than mogul.
For greater insight into how technology will change publishing in the years to come, Clayton Christensen’s The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail (Harvard Business School Press, 1997) is a good place to turn. The book, which David Hurst reviewed in the spring of 2001, introduced Christensen’s seminal theory of disruptive technologies and described their cyclical effect on industries.
Christensen, a professor at Harvard Business School, says that successful companies in a given industry are almost always focused on improving their products and the technologies that underlie them. This creates innovation races in which the industry’s offerings outpace the needs and desires of customers. New competitors inevitably arise, deploying disruptive technologies to serve customers in more effective ways, but the incumbent industry leaders ignore them as inconsequential. Eventually, the new competitors eclipse the industry leaders, and the cycle starts again. How does this relate to publishing? Well, one hint comes from Amazon, which announced that its e-book sales had overtaken hardcover sales as I wrote this article.
Disruptive technologies bring us full circle to Nicholas Carr. Before the publication of his current volume, Carr generated controversy with Does IT Matter? Information Technology and the Corrosion of Competitive Advantage (Harvard Business School Press, 2004). In it Carr suggested that IT was well on its way to becoming a “commodity technology.” The idea that IT had become merely an ante in the game of business, rather than a winning hand, understandably outraged many denizens within this sector. They were, after all, still reeling from the tech-led recession in 2001 and 2002 when the book arrived.
When Steve Lohr, a technology reporter for the New York Times, looked at the book in his Knowledge Review in the Summer 2004 issue, he found flaws, saying that “Carr’s desire to fit everything neatly into his thesis leads him astray” and his “thesis is often the same kind of straitjacket of standardization that packaged software, as he says, is for companies.” But Lohr found Carr’s indictment of “faith-based investment in technology” spot on. “The value is not in the bits and bytes,” concluded Lohr, “but up a few levels in the minds of the skilled businesspeople using the tools. Large chunks of the technology may be commoditizing, but how you use it isn’t. That is where competitive advantage resides.”
The same can be said for books. Books probably won’t disappear anytime soon, but their real value is not in their pages. It is in the minds of managers and how they put what they read to use. The best insights being codified in the best business books and then deployed thoughtfully is the way that management knowledge develops these days — and books are therefore one of the great vehicles of progress in our world.
- Theodore Kinni is senior editor for books at strategy+business. He has written or collaborated on 13 business books.