Posts for writers; Free is taken to task

I've read a couple of blog posts in the past week or so that are worth considering if you're a writer:

David Pogue, posting on the New York Times blog, answers a reader's question: "When will you share your productivity tips with us? Not everyone can write five books a year, file two columns a week, churn out a daily blog, speak 40 times a year and film a video every Thursday. What are your secrets?" Hint: long work hours, speech recognition, and typing short cuts.

In his blog, Wordwork, journalist Dan Baum calls for the elimination of the nut graph. He says having a paragraph that sums up the writer's thesis is a useful convention for news reporters and newspaper readers, but that it's counterproductive in longer works. I tend to agree.

In the business book world, Wired editor-in-chief Chris Anderson's new book Free: The Future of a Radical Price (Hyperion) is attracting plenty of criticism. First, a blogger named Waldo Jaquith at Virginia Quarterly Review discovered that Anderson had lifted passages in the book from Wikipedia without attribution and Anderson apologized, blaming sloppy editing. Then, Malcolm Gladwell, another popular writer in the one-idea-per-book genre, criticized Free for its sloppy thinking in a New Yorker review. And today, Janet Maslin criticized Free as just plain sloppy in the New York Times' Books of the Times column. Hmmm...seems like a theme is developing.

The French are lovin' it

It wasn't all that long ago that the French were up in arms that their nation was being invaded by McDonald's, the poster company for fast food and poor nutrition. Now, there are approximately 1200 McDonald's in France, including a location a block from the Louvre, and that nation is the company's second most profitable market.

Slate wine columnist Mike Steinberger's story, How McDonald's Conquered France, is a fascinating look at how the global QSR giant accomplished this feat. For instance, McDonald's overcame farmer-driven protests by making the French aware that 70 percent of its ingredients were purchased domestically. It took the time to learn French dining habits (eating is a social event; they prefer to dine in rather than take-out) and designed its locations accordingly. It also acknowledged the food preferences of the French by introducing a host of sandwiches and other products designed especially for their tastes. The end result: McDonalds is serving more than a million customers a day in France.

Steinberger sees the success of McDo, as the French call it, as an indicator of the nation's cultural decline, at least in terms of cuisine, and has written a new book about it, titled Au Revoir to All That: Food, Wine, and the End of France. But there is also a bigger business story or a case study here and somebody ought to write that, too. It sounds like McDonald's has figured out how to go global by acting local...for better or worse.

Leading authors on notable books

I've been helping to launch and edit a new book feature on the strategy+business website called Author's Choice. It's a neat concept: we ask leading business book authors to introduce excerpts that catch their eye from works other than their own. The short excerpts, under 1000 words, are self-encompassed and offer a lesson or insight for managers. We've already got a great pipeline in development and the first installment, announced below, is online. Check it out, and if you're a business book author whose found a pithy excerpt that you'd like to introduce, shoot me a line.

The Statistician Who Ate Humble Pie

New York, N.Y., June 30, 2009 - Why are business and economic forecasts so often wrong, and why can't they be improved? In a new feature from s+b -- Author's Choice -- leading writers select and introduce passages from notable books. In this piece, Nassim Nicholas Taleb, author of The Black Swan: The Impact of the Highly Improbable, introduces an engaging lesson in business forecasting from Dance with Chance: Making Luck Work for You, by Spyros Makridakis, Robin Hogarth, and Anil Gaba.

To read it, click here.

When contracts aren't written in stone

George Haley, a professor of marketing at the University of New Haven, was a very helpful source for a cover story I wrote about selling in China for Selling Power magazine a couple of years ago. A specialist in Asia Pacific, George wrote a book in 1998, with professors Usha Haley and Chin Tiong Tan, on the Overseas Chinese -- an insular and powerful business community in Southeast Asia that I had never heard of before that. It is available now in a new, revised edition titled New Asian Emperors: The Business Strategies of the Overseas Chinese (Wiley).

Among many other things, the book explains one of the most disconcerting elements of Chinese business culture for Westerners -- the cavalier attitude to contracts -- as follows:

Many Western businesspeople in Asia have problems with the seeming flexibility of contractual agreements in Asia. The Bundesbank's difficulty in collecting on some of its loans to Chinese companies, including government-owned firms, presents a classic example. When Chinese debtor companies ceased paying in loans, Bundesbank representatives demanded resumption of payment. Their Chinese counterparts responded by arguing that circumstances had changed, and hence the terms of the contract must change. Contractual flexibility follows Chinese custom.

Contractual flexibility took hold among Chinese businesspeople because of the nature of their business. Business-to-business transactions occurred largely between long-time associates at the very least, if not actual family members. Hence, if circumstances changed abruptly in favor of one party to the transaction and to the substantial detriment of the other, they would renegotiate the contract so that neither party would suffer unbearably from changed circumstances. This consideration offered to one's trading partner stemmed from self-interest. An unhappy trading partner might not only refuse to do any further business with the offending individual, but also campaign against him within his network, or even offer evidence against him with imperial authorities.

Welcome to the next depression

Richard Posner isn't afraid to use the "D" word. He says we're in a depression -- as defined by a steep decline in output, a widespread sense of crisis, costly remediation efforts, and long-term impacts.

In A Failure of Capitalism: The Crisis of '08 and the Descent into Depression (Harvard University Press), Posner persuasively argues that this meltdown wasn't caused by rotten financiers or grasping investors. Instead, the depression was caused by a systemic flaw -- everybody acted rationally and that caused an economic bubble that, like bubbles do, popped.

I won't go into the details; you really should read the book - even if it gets a little long as the same basic argument gets recycled through each element of Posner's thesis. But there is one section worth calling out for corporate consideration: it deals with why companies tend to get caught out when bubbles pop and this portion of it adds some fuel to the debate over executive compensation.

Riding a bubble can be rational even though you know it’s a bubble. For you can’t know when it will burst, and until it does it is expanding and that means that values are rising rapidly, so that if you climb off the bubble you will have foregone a large profit opportunity. As Citigroup’s then CEO put it in July 2007, “When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.” (He didn’t know it, but the music had stopped.)

The tendency of corporate management to cling to a bubble and hope for the best – or, equivalently, the tendency to maximize short-run profits – is strengthened if, as on Wall Street during the boom, executive compensation is both very generous and truncated on the downside. For then every day that you stay in you make a lot of money, and you know that when the bubble bursts you’ll be okay because you negotiated a generous severance package with your board of directors. Limited liability is a factor, too; neither an executive heavily invested in his company’s stock nor any other shareholder will be personally liable for the company’s losses should it go broke.

And how do executives get such a sweet deal? Well, the board will have hired a compensation consultant who will have advised generosity in fixing the compensation of senior management and as part of that largess will have recommended that senior executives receive a fat severance package (a “golden parachute”) if they are terminated. The consultant will have told the board this because if the board is generous to senior management, senior management may out of gratitude hire the consultant to do other consulting for the firm. And the board will have listened to the consultant’s recommendation because the board will have been predisposed to be generous with senior executives’ salaries. Most members of a corporation’s board of directors will be senior executives themselves. And because a firm’s chief executive officer has a say in whether board members are reelected to the board, the higher a board member thinks CEO compensation should be, the more boards he will be invited to join.

The more generous an executive’s compensation and the more insulated his compensation package is from any adversity that may befall his company, the greater will be his incentive to maximize profits in the short run – especially in a bubble, where the short run is highly profitable but the long run a looming disaster.

The inscrutable ways of publishers

I stumbled on Ved Mehta's Remembering Mr. Shawn's New Yorker: The Invisible Art of Editing (Overlook, 1998) at a library book sale -- 50 cents, such a deal! This book in Mehta's multi-volume memoir titled Continents of Exile deals with his years as writer for the New Yorker and his experiences being edited by William Shawn, one of the all-time greats. All writers and editors should read it for insights into their work.

It goes without saying that Mehta also has a way with a story, including this vignette about his adventures with book publishers:

I engaged in battles to get jacket designs in keeping with the spirit of the book. The battles eventually resulted in tasteful, if quiet, jackets, but publishers regard presentation as their preserve, and what they saw as my meddling seemed to have the effect of making them feel redundant. My interference was resented even more when it had to do with jacket copy. Yet the jacket copy that each of the publishers provided not only was completely at variance with the character of the book but was so badly written that when I showed an example to a colleague, Renata Adler, she exclaimed," It seems to have been written by a lower form of humanity!" The publishers and I went back and forth on several versions, and finally both just threw up their hands and told me to provide them with something.

This cracked me up because I have yet to get jacket copy from a publisher that looks like it was written by someone who actually read the book. I'm not sure that publishers even try to write good copy; maybe they send drivel knowing full well that the author will be compelled to fix it. I always have and thanks to Mehta, I now know I'm not the only one.

One question: Les Leopold

Les Leopold's readable new book, The Looting of America: How Wall Street's Game of Fantasy Finance Destroyed Our Jobs, Pensions, and Prosperity—and What We Can Do About It is out this month from Chelsea Green. Les directs two nonprofits, The Labor Institute and The Public Health Institute, which are aimed at educating union workers on public policy issues.

The crux of Les' thesis, if I can summarize without subverting, is that the roots of this recession lie in the gap between productivity and real wages, which began growing in the early 1970s. Instead of going to workers in the form of wages, who would have spent the money on real goods and services that grow economies, productivity gains began going to owners and executives, who, having all the stuff they needed, invested the money. All this new money seeking good returns led to risky lending practices and financial instruments, which, in turn, led to the current mess.

This is a provocative and debatable argument, and certainly one that will resonate in pro-labor circles. My question for Les: In pegging the financial meltdown in the U.S. to the decoupling of productivity gains and real wages, the underlying inference is that those gains – or a larger portion of them – were wrongly diverted away from wage earners. What caused this divergence and why are wage earners entitled to a larger portion of productivity gains?

Here's his reply:

There really is no consensus on why productivity and wages diverged so dramatically. I can only give you my read. I think several trends entwined to undercut the price of labor.

First was what we call “globalization” which, in this case, refers to the ability of corporations to move capital quickly to all parts of the globe. The Bretton Woods agreements, which ended in the early 1970s, had previously prevented such rapid movement of investment capital. But after its collapse, corporations could set up shop in low-wage areas and import the final products back into the United States. American labor, in effect, was in direct competition with workers all over the globe.

This led to the second factor: the decline of unions. The globalization process and its impact on U.S. workers could have been mitigated, in my opinion, had the labor movement been stronger. But labor union density had been in a secular decline since the mid-1950s. Why that happened is a much longer story, but the impact was two fold: First, unions could not moderate national policies on deregulation, capital flight and cheap imports; and second, unions could not effectively bargain hard at the workplace.

The third set of factors involved a shift in political power to the upper income brackets. During the Reagan era and beyond, social programs were slashed, taxes on the wealthy were reduced, the minimum wage was not increased to keep up with the cost of living, and labor laws were weakened.

I don't think we can blame new technologies for the transfer of productivity gains. The computer revolution came later as did the Internet. Manufacturing was becoming more and more automated throughout the 1950s and 1960s. In fact, there was much hand-wringing in the late 1950s about the impact of automation on work and the rise of leisure --- what would workers do with all their free time?

That's why my main point is the following: The distribution of the fruits of productivity is more like a tug of war – a genuine struggle between the investor class and the rest of us. It’s not automatic. Policy impacts the division of the pie.

There is, however, an additional and very important factor to consider, no matter whether you favor more money for working people or more for the investment classes. I think we are living through a real life experiment about what happens when you let too much money accumulate at the top: It runs out of tangible investment opportunities in the real economy and much of it ends up in Wall Street’s fantasy finance casino.

There is a relationship between the rising gap between the super rich and the rest of us, and the crashing of the economy. Such were the conditions before the Great Depression and those conditions almost led us there again. I believe that for the sake of the entire economy, it is best to narrow the income/wealth gap.

Strategy when chaos is the new normal

Marketing guru Philip Kotler and business strategist John Caslione say that battening down the hatches in a recession often does more harm than good. The most common mistakes:

• Resource allocation decisions that undermine core strategy and culture
• Across-the-board spending cuts versus focused, measured actions
• Quick fixes to preserve cash flow that puts talent at risk
• Reducing marketing, brand, and new product development spending
• Responding to declining sales with price discounting
• Decoupling from customers by reducing sales-related expenses
• Cutting back on training and development
• Undervaluing suppliers and distributors

So what should you be doing in a recession? The same things you are doing during good times, say Kotler and Caslione, co-authors of the new book, Chaotics: The Business of Managing and Marketing in the Age of Turbulence (Amacom). They say that the nature of the business world has changed in such a way that thinking in terms of cycles is counterproductive - rather, companies must create strategies that are capable of responding and adapting to a continuous stream of "disruptive innovations and big unexpected shocks."

The three keys to such a strategy, according to the authors: early warning systems that alert leaders to sources of turbulence; scenario planning to allow fast, flexible response; and a scenario selection process based on prioritization and risk exposure. Read more at their website...

McIntyre's editing rules

John McIntyre, director of the copy desk at The Baltimore Sun, an affiliate faculty member at Loyola College of Maryland, and a former president of the American Copy Editors Society, pulled together a funny - and informative - list of 25 rules of editing. Here's the first five:

1. The project will require three times the planned time to achieve one-third of the desired result (McIntyre’s Ratio).
2. Writers will never straighten out it’s and its.
3. No matter how many times an article is edited or proofed, some reader will find a mistake in it.
4. To reporters, all deadlines are fungible.
5. Percentages will have been miscalculated 42 percent of the time...read the rest of the rules here.

P.S. I probably violated Rule 20 in the first sentence, but I like the way it looks.

Political risk and the fat tail

Having a degree in poli sci, I've been especially interested in The Fat Tail: The Power of Political Knowledge for Strategic Investing (Oxford, 2009) by Ian Bremmer and Preston Keat of Eurasia Group, a political risk consulting firm. The so-called "fat tail" is a bump in the end of a distribution curve in which the probability rises that something highly unlikely - and therefore often ignored by managers - may actually occur. The book makes a strong case that political risks often reside in the fat tail and that global companies must identify and manage these risks (although the details on how that is done are less well documented). There's a short Harper magazine Q&A with Bremmer posted here.

There's also an article by Andrew Rice on South Africa and Jacob Zuma, who may well become that nation's leader later this year, in the latest issue of Portfolio that reiterates the importance of recognizing and managing political risk. In it, Rice describes Zuma's rise to control the ANC party and the major implications it may have for the business environment in South Africa.

Making sure marketing pays

A lot of what I read about marketing sounds like a lot of baloney. I just can't figure out how a polo sponsorship or a billboard or a storefront on Second Life creates profitable sales - and while marketers can talk a great game, none of them ever seem to have the numbers to prove they actually won it.

That's why I found working with Les Moeller and Ed Landry, partners at Booz & Co., on their book, The Four Pillars of Profit-Driven Marketing: How to Maximize Creativity, Accountability, and ROI (McGraw-Hill), such an enlightening experience. These guys aren't just saying that you should know whether your marketing spend pays off, they show you how to measure marketing ROI and use that knowledge as the basis for enhanced profitability, creativity, and accountability.

The book just came out and here are a few links for more info:

You can read the Introduction and download a chapter at the book's web site. You can also read an excerpt from Chapter 4 in the new issue of strategy+business.

I helped write the book, so I'm biased, but if you're one of the people responsible for allocating or spending marketing dollars or responsible for making sure that those people produce great results, I'd say it's a must read...especially in this economy.

Learning from heretics

I didn't get a chance to post when the new, expanded edition of Art Kleiner's The Age of Heretics (Jossey-Bass), a very readable history of the influence of a handful of radical thinkers on management from the 1940s onward, hit the shelves. But now is as good as time as any, especially since Art will be conducting a free webinar based on the book next week. Here are the details:

The Age of Heretics: Lessons from Three Generations of Management Thinkers with Art Kleiner

Join strategy+business editor Art Kleiner in a live interactive webinar as he discusses the nature of effective leadership in times of change.

The most valuable management principles and practices often started as countercultural – including high performance management, group dynamics, teamleadership, quality, and diversity. In this Webinar, Art Kleiner will discuss the nature of corporations and the role of the heretics – the people who raise difficult questions on behalf of the organizations they work for. These days, with conventional wisdom failing, heretics are needed more than ever. Art will tell the stories of heretics who succeeded (and some who failed), and what we can learn from them.

Date and time: February 24, 2009 12:00 pm, Eastern Standard Time

To sign up: click this link

The Mametian perspective

Figuring it would cut the holiday saccharinity, I picked up David Mamet's meditation on the movie business, the essay collection Bambi vs. Godzilla. And it did, of course; Mamet's take on labor, management, and business is as tough as it gets. I particularly enjoyed this passage on the development path of producers, which if you substitute the word "customer" for "audience," should give every manager pause:

...the young bureaucrat-in-training, as he progresses in the bureaucratic hierarchy, will discover - some quickly; others, their eventual lackeys, with less speed - that success comes not from pleasing the audience but from placating his superiors until that time it is reasoned effective to betray them.

He learns in short to bide his time.

And as time goes by, this suborned young person becomes each day less capable of first uttering and then framing a non-bureaucratic thought.

Impulses of joy, of wonder, indeed, of rage and grief are repressed until they are no longer consciously felt.

This is called "growing savvy."

This person, like a member of a sexless marriage, ceases to feel affection, lust, desire for the permitted object, and, as in that marriage, this energy is diverted into (inter alia) depression, abuse, and treachery.

The successfully matriculated executive, marginally concerned wth art and diminishingly concerned even with "product," devotes his new wisdom and increased leisure to opportunities for trickery, greed, stock manipulation, and merger, as in any business.

Five rules for successful leadership

No matter what the economic climate, there are always plenty of leadership books in the business section of the bookstore. In fact, there are so many leadership titles that it's difficult to parse them to get down to the basics. Into the breach step Dave Ulrich, Norm Smallwood, and Kate Sweetman, who are themselves partly responsible for the crowded shelves.

In their new book, The Leadership Code (Harvard Business Press), the trio, all principles at The RBL Group, seek to boil successful leadership down to five rules. I'm not vouching for the scientific accuracy of the results -- the basis for the five rules is a survey of "hundreds of studies, frameworks, and tools," as well as the expert opinions of 15 leading leadership thinkers and the authors' best judgements. But the rules sound right. Here's the list direct from HBP:

Rule 1: Shape the Future – Strategic leaders answer the question, “Where are we going?” They figure out what direction the organization must take to succeed. They test their ideas pragmatically against current resources and they work with others to determine how to get from the present to the desired future.

Rule 2: Make Things Happen – The “executor”dimension focuses on the question, “How will we make sure we get to where we are going?” Executors translate strategy into action. They understand how to make change happen, how to assign accountability, and how to make sure that teams work well together.

Rule 3: Engage Today’s Talent – Leaders who optimize talent today answer the question, “Who goes with us on our business journey?” Talent managers know how to identify, build, and engage people to get results now. They generate intense personal, professional, and organizational loyalty.

Rule 4: Build the Next Generation – Leaders who are human capital developers answer the question, “Who stays and sustains the organization for the next generation?” Talent managers ensure shorter-term results through people, while human capital developers ensure that the organization has the longer-term competencies required for future strategic success.

Rule 5: Invest in Yourself – At the heart of the leadership code is personal proficiency. Effective leaders learn from success, failure, assignments, books, classes, people, and life itself. Leaders who demonstrate personal proficiency follow rules about developing and increasing personal insight so that they model the change they want to see in others.

One question: Dan Carrison

I was fascinated by the FBI’s Ten Most Wanted Fugitives List as a kid. In those pre-digital days, the Ten Most Wanted - do not approach, they are armed and dangerous - were hung on a clipboard in the local post office. I carefully perused them to be sure none of them were masquerading as my neighbors, friends' parents, or elementary school teachers - or perhaps, just buying a few stamps to send Christmas cards to their gangs.

Dan Carrison, a partner in Semper Fi Consulting and founder of ghostwritersinthesky.com, has resurrected my interest in the list. Dan's new book (his fourth to be published by AMACOM) is From the Bureau to the Boardroom: 30 Management Lessons from the FBI. As the title suggests, the book mines the Federal Bureau of Investigation (which is celebrating its centennial this year, by the way) for business ideas.

I asked Dan about the Most Wanted list - why it was effective and whether it has any business applications. Here's his generous and thought-provoking answer:

I, too, was fascinated, as a kid with the FBI's Most Wanted posters. My first impression was always, "Those tough-looking guys don't stand a chance, with the FBI on their tail." But as I grew older, I wondered why the FBI published their 10 Most Wanted list. After all, they could keep the list as an internal document for all law enforcement agencies, and spare themselves the possibility of public criticism for not having captured a high profile criminal.

The FBI, by broadcasting the names and faces of its Most Wanted criminals, is leveraging the eyes and ears of the tens of millions of citizens who gaze upon the list. It is also creating a whole new level of oversight from the general public. The "pressure is on" to perform! I also think that once our goals are announced, they have a better chance of being achieved, through the benevolent serendipity of the universe.

This concept could work equally well in private enterprise. A Top Ten list of “most wanted” customers, if posted conspicuously, would alert all within the organization—from the boardroom to the mail room—of the desired business that is still “roaming free.” Why shouldn't that be common knowledge? It might surprise many a CEO to discover how few employees in the wide organization have even an inkling of the top targets of the sales department.

The effect could be galvanizing; the list would be a constant reminder of the most desirable accounts “out there” in the marketplace. Each “poster” would be modeled after the real thing—with a flattering photo of the CEO the company wants to do business with, some organizational stats, and a “reward” to the employee who contributes to the establishment of business relations.

Now every employee would be “in the know” and explicitly recruited in the quest. And one never knows what can happen when the entire workforce is being leveraged. For example: a clerk in accounts payable may have a friend who works in the “top tenner” company’s purchasing dept.; a delivery man may have noticed something unusual driving by the company—such as a strange truck pulling away from the loading dock, suggesting a change of vendors; an IT tech may have read something on an industry blog that portends change (and opportunity!) within the top tenner’s infrastructure.

These little bits and pieces of information could prove to be very helpful to the company’s strategists. But the information will not be communicated unless the rank and file is involved in the hunt for new business. A conspicuous Top Ten list would keep the company’s goals fresh in everyone’s mind—especially if there were to be a Reward (such as a tropical vacation for two) for information leading to the “capture” of the client.

By publishing its top ten target customers (i.e., through conspicuous ads and commercials), the company would, like the FBI, invite the pressure of the public. Stockholders would ask about the progress made in reining in the top ten accounts at every shareholder meeting. Business journalists would reference the list, and perhaps even make fun of its ambitiousness. The current suppliers of the top ten companies would be put on notice that determined competition is coming after them and not afraid to say so. And the targeted customers? They would love it!

Just imagine a CEO picking up the Wall Street Journal and seeing his/her own “Wanted” photo posted, and his company listed as the stated business goal of a vendor—publicly, fearlessly, audaciously. The impression could be nothing but positive. The name of the vendor would be forever ingrained in the CEO's consciousness. He would investigate. What kind of company are they? And look! One of the Top Ten has been “captured" and is now doing business with this audacious supplier. The CEO might call that company and ask about their experience with the bold supplier; he might tell his purchasing department to entertain a quote. He might say to himself, “Surely, a vendor willing to go to these lengths—publicly—to acquire my business would do much in the way of customer service to keep it.”

To carry this somewhat fanciful, but eminently doable, metaphor further, there would even be a certain amount of public pressure now exerted on the target customer. He might be asked by his own shareholders or BOD members, “Why haven’t you done business with this vendor who has laid his reputation on the line to work with you? Have you at least spoken to him?”

A vendor is known by its customers; that’s why so many marketing campaigns are eager to list the prestigious organizations already being served. But a vendor can also be known by the customers it wants to serve. The higher the ambition, the stronger the company looks—for surely it wouldn’t aspire to serve a premier customer if it couldn’t actually provide the service. A supplier with the courage to take on such an imaginative initiative as a Top Ten List of Most Wanted Customers would surely be a salient feature on the business landscape.

A criminogenic business world?

I've been following Bernard Madoff's story in the New York Times and Reuters. They say that Madoff has admitted to a $50 billion fraud based on Carlo Ponzi's simple, but timeless pyramid scheme. In the process, Madoff, the former chairman of the NASDAQ, allegedly suckered highly sophisticated investors with too-good-to-be-true returns and perpetrated a business crime that rivals the Enron scandal. The story reminded me of a short book review I wrote for Business 2.0 back in Dec. 2005, when it was still a magazine, titled "Coming Soon: More Scandals."

(Business 2.0) – In the 1990s, corporate America became "a two-bit securities scam." That's the premise of Pump and Dump, a comprehensive history of new-economy scandals, out this month from Rutgers University Press. Authors and sociologists Robert Tillman and Michael Indergaard posit that, in recent years, the two sides of Wall Street merged--the one inhabited by big bankers, and the shady side defined by the "pump and dump," the practice of promoting stocks just long enough to profit from them. (In one grisly example, the book tells of two online stock promoters who were murdered in a Mafia-style execution.) As Congress gutted industry regulations and investor protections over a period of 25 years, the seamy side became the norm. The power brokers behind WorldCom, Enron, and dotcom IPOs all embraced the pump-and-dump idea: Get rich by shifting risk to someone else.

The new-economy crash, the book concludes, had less to do with irrational exuberance than with the birth of a criminogenic business environment. Given loopholes in Sarbanes-Oxley and the organizational change that still linger, the authors predict that new schemes will emerge. If you thought corporate scandals were history, Pump and Dump will make you think again.

A criminogenic business environment? Seems like that's a concept worth mulling over as the Madoff story unravels and the current financial crisis continues to evolve.

Ignorance was bliss

Queen of business communication Dianna Booher has written a new book, Booher's Rules of Business Grammar: 101 Fast and Easy Ways to Correct the Most Common Errors (McGraw-Hill), which is precisely what the title promises. It also comes with an invitation to test your "grammar IQ" online at Booher'sRules.com. Of course, I couldn't resist that. I answered the 25 multiple-choice questions and some of them were tough. I figured I probably missed one or two, but what the hell, copy editors and proofreaders need to earn a living, too. Then, I got my score...76 percent! Now, I'm reading the book.

s+b's Best Business Books 2008

I had the pleasure of working with a great team of writers while editing this year's Best Business Books special section in the Winter 2008 issue of strategy+business. Congrats to all the Best Books authors and the essay writers. The entire pdf is available here; my intro is below:

Social critic John Ruskin once wrote, “Life being very short, and the quiet hours of it few, we ought to waste none of them in reading valueless books.” Agreed, but that’s easier said than done when the production output of business books exceeded 7,600 titles last year.

Our annual review can help. It whittles the towering stacks down to three dozen books, covered in 10 essays written by a stellar group of commentators, including distinguished newcomers to this magazine like Margaret Wheatley and seasoned veterans like James O’Toole.

In choosing the year’s best business books, we made long lists of likely candidates, but each writer selected which works to read and review for himself or herself. That makes the connections and contradictions between these essays all the more unexpected and interesting.

For example, Nell Minow, cofounder of the Corporate Library, points out that biographies and memoirs are always subject to inherent bias in the selection and presentation of facts. We see this bias in the contrast between Ted Sorensen’s memoir, Counselor, one of Minow’s selections, and the portrait of Sorensen that Robert Schlesinger paints in White House Ghosts, one of Michael Schrage’s picks as a best book on rhetoric.

Another example: Wheatley and Carole Schwinn’s passionate and provocative essay on capitalism and community reviews books that explore the collision of the Western economic perspective and globalization. The theme reemerges in Kishore Mahbubani’s The New Asian Hemisphere, a selection of former Economist editor Marc Levinson in his essay on globalization, and then surfaces again in Pankaj Ghemawat’s Re­defining Global Strategy, a selection in the strategy essay by IMD Professor Phil Rosenzweig.

The business ramifications of digital technology echo through Catharine P. Taylor’s insider’s review of marketing books and the essay on innovation by New York Times Magazine contributing writer Jon Gertner. And it returns again in Clayton M. Christensen’s Disrupting Class, a selection in the essay on books about human capital by strategy+business Contributing Editor Sally Helgesen.

Ultimately, choosing best books in any genre is a wonderfully subjective pursuit in which the only opinion that really counts is that of the individual reader. You may agree or disagree with our choices for this year’s best business books, but be assured they are all worthy of your quiet hours.

No nepotism required

Hey! Google Alerts emailed me an unexpected link to my nephew, Nick. Nick took a course in Peru last summer and he brought back a thoughtful, honest, and engrossing story about the trip titled An Open Window--and I'm very happy to report that I can say that as a reader and editor, not just as an uncle. You can read about what he discovered on a bus trip through wheat fields high in the Andes here.

By the way, Nick's an English major, who is graduating from VCU next month. I'd guess that my brother is ready to give up his long-term lease on the kid and given this sample of Nick's work, I think any magazine would be lucky to take over payments.

An Insider's Guide to Deal Making

I've been immersed in M&A for much of 2008 - not making deals, but helping edit two books about them. One of them has been released, and thanks to the economics of e-books and the beneficence of Booz & Company and strategy+business, you can download it for free!

The CFO as Deal Maker: Thought Leaders on M&A Success is a unique collection of interviews with 15 CFOs of major companies in diverse industries. These are M&A insiders who been involved in some of the biggest deals in recent years: Jose Antonio Alvarez, who helped Spain's Banco Santander grab a piece of the $98.5 billion acquisition of ABN Amro; Mutlaq H. Al-Morished, who engineered Saudi Basic Industries' $11.6 billion acquisition of GE's plastics division; and, Aditya Mittal, who managed Mittal Steel's $38 billion acquisition of Arcelor. Add in the interviews with the CFOs at Johnson & Johnson, Telefonica, E.ON, Henkel, BASF, etc., and you've got an M&A dream team.

These interviews are impressive not just for the credibility and experience of the subjects, but also for their content. Each subject was interviewed by a team composed of Booz & Company M&A experts and a professional journalist. The result is a set of very tight and pithy interviews that are filled with practical, actionable ideas. Admittedly, having been involved with the project, I'm prejudiced, but it won't cost you anything to see if I'm just blowing smoke.