s+b's Best Business Books 2011

The annual Best Business Books special section (read or download it here) was published by strategy+business this week. I edited the 7 essays and contributed this opening:

In 2001, when strategy+business published its first Best Business Books section, an irrationally exuberant investment bubble had recently popped and the business world was coping with a global recession. Now, as this feature enters its second decade, another irrationally exuberant investment bubble has popped and the global recession is back with greater ferocity. Apparently there is some truth to the loosely translated epigram of French novelist Jean-Baptiste Alphonse Karr: The more things change, the more they stay the same.

Although they cover a wide variety of topics and fields, just about all of the books featured in the seven essays ahead are rife with dissatisfaction. Many of their authors have tracked down root causes of the destruction of economic value and prescribed radical solutions for them. Judging by the fact that the expert essayists we recruited to cull this year’s stack of business books chose these particular titles, it’s fair to assume that they too would welcome change that alters the status quo.

Professor of business ethics James O’Toole, who has contributed an unbroken chain of insightful annual essays since 2001, leads off with books that illuminate the social role of business. Karr-like, he finds that for all the change we experience, the defining characteristics of “good” companies remain the same over time — as does the inability of leaders to sustain them.

Next, IMD professor Phil Rosenzweig brings his sharp eye for flaws in business logic to his survey of this year’s books on strategy. He chooses three books that eschew formulaic strategic approaches to focus on the fundamental questions executives must consider as they decide the direction of their company.

David K. Hurst, author and our regular Books in Brief reviewer, takes on the always-packed shelves of new books on management. His picks illuminate the struggle for the future of Western management practice and thought — and suggest the kinds of changes, and their magnitude, that may be needed to ensure that we move beyond business as usual.

Award-winning financial journalist David Warsh picks the year’s best books on economics. He discovers many worthy forward-looking books, and focuses on one in particular that describes the oncoming mash-up of national economies, providing what may prove to be a durable framework for making sense of a global economy that will soon be four times its current size.

Journalist Catharine P. Taylor brings two decades of perspective to her roundup of the year’s best books on marketing. She finds a trio of compelling books that reject conventional marketing “window dressing” for more socially responsible and engaging approaches, but adopting such approaches would clearly require some corporate reinvention.

We placed this year’s choices for best leadership books in the capable hands of Barbara Kellerman, a professor at Harvard University’s John F. Kennedy School of Government. In her first best business books essay, Kellerman bypasses leadership theory for leaders’ lives, picking two biographies of American presidents and a presidential memoir that illuminate four lessons for better understanding executive effectiveness.

Finally, strategy+business contributing editor Michael Schrage of MIT’s Sloan School of Management and London’s Imperial College returns to our pages with an essay on the best books on technology. His choices broaden our understanding of how people and technology interact and coevolve, creating innovation ecosystems in the process.

Here are the year’s best business books. I hope you find them as worthy as we do and take some of their ideas to heart. If you do, we might not be reliving this same cyclical chaos 10 years hence.

Be Our Guest - 10th Anniversary Edition

Here's a brief article from D23, the Disney Fan Club, announcing the publication of the revised and expanded edition of Be Our Guest earlier this month. The book has been amazingly successful (over 150,000 copies sold), which tells you something about Disney's expertise at delivering quality service and their ability to market their products.

Ten years ago, Ted Kinni’s book Be Our Guest: Perfecting the Art of Customer Service pulled back the curtain to give readers a look at how Walt Disney Parks and Resorts does business.

Based on DI programs and extensive interviews with their clients, Be Our Guest showcases how Disney builds its entire organization around customers, or in Disney parlance, guests. Now, 150,000 copies later, the Disney Publishing Worldwide book is back on store shelves, freshly updated in time to help celebrate DI’s 25th anniversary.

“The interesting thing about this edition is that the Company itself has grown and entered a lot of different businesses since the first edition,” Ted says. “Because of this, there’s now a whole new range of examples and enhancements to the book.” He cites growth in retail stores, the Cruise Line, travel businesses, and a more global Parks presence. “This book represents a more refined quality service approach that DI has been able to develop these last 10 years,” he says. “When you think of customer service, Disney immediately pops into your mind. It’s really amazing how long Disney has excelled in customer service and how it’s built a successful organization around it.”

I'm working on a second book for Disney Institute now. It's really a dream gig working for a client that has so much great content and such a terrific track record. More on the new book when we get closer to the publication date later next year.

Bottling customer experience

For a couple of years now, I've been editing a monthly feature on the strategy+business website named Author's Choice, in which one author introduces an excerpt from another author's book, but just got around to introducing one myself. It's from a really good new book by the co-founders of Method Products that explains how they built a successful consumer packaged goods company in one of the most competitive product niches - household cleansers. Here's the intro:

The best customer experiences tend to come from companies with major service components, like Disney and Ritz-Carlton. Their business models place them face-to-face with customers, and their fortunes rise and fall on their ability to provide compelling experiences, as Starbucks discovered a couple of years ago. But most product companies, especially those that don’t sell directly to end-users, don’t think quite as rigorously about customer experience.
Enter Method Products. Method is one of those delightfully quirky entrepreneurial stories. In the late 1990s, two 24-year-old guys — an ad man and a climate researcher — take off on a ski weekend and decide that the home cleaning products industry is ripe for a shakeup. Never mind that it’s a mature, relatively stagnant market dominated by powerful brand names like Procter & Gamble and the Clorox Company. Never mind that everybody else is starting e-businesses. Never mind that they are two 24-year-old guys on a ski weekend talking about cleaning products. By 2010, their privately held company is generating annual revenues somewhere north of US$200 million; it counts major retailers, including Target, Whole Foods, and Auchan, among its accounts; and the big dogs are tracking it.
How did Method do it? One way, as detailed in the excerpt below from the new book by Method cofounders Eric Ryan and Adam Lowry, was by zeroing in on the abysmal experience associated with so many home cleansers, such as the eye-tearing, nose-burning, skin-irritating sensations that can transform a minor decision about who is going to clean the bathroom into a domestic negotiation of epic proportions...read the excerpt here

MacArthur in The Washington Post

It was cool to see No Substitute for Victory pop up in The Washington Post's "On Leadership" blog . They published the following excerpt from getAbstract's summary of the book:

The stereotypical military general wields authority like a blunt instrument: Issue an order and it's followed. The reality of military leadership is more complex, as this intriguing study of General Douglas MacArthur shows. MacArthur took a deliberate, nuanced approach to inspiring his troops. His arsenal included motivation, knowledge, intimidation, praise and self-deprecation. Authors Theodore and Donna Kinni combine a short biography, compelling anecdotes and a keen understanding of MacArthur's career and personality to build this episodic analysis of his approach to strategy, motivation and management. They include relevant study questions after each chapter. getAbstract recommends this to managers who need to take their leadership skills to boot camp and to those who enjoy good military tales.

MacArthur’s strategic rules
Douglas MacArthur was born in 1880 into an Army family. He served in World War I, became the head of West Point and served in World War II. At 70, General MacArthur remained a force in world affairs as the leader of U.S. troops in Korea. He always employed strategic skills and concepts that still offer useful guidance to managers:

"Define and pursue victory" – In any endeavor, the definition of success can differ. If you don't have a clear definition of victory, you cannot win. In Korea, MacArthur knew that he had to outline victory clearly, although this ultimately cost him his job. President Harry Truman defined victory as a sullen stalemate. MacArthur defined it as absolute victory; his criticism caused Truman to relieve him from duty. Korea today remains divided; North Korea remains an international political problem.

"Understand the situation" – As a young officer, MacArthur gained a reputation as a leader who went into battle with his troops. He wanted to get to the front so he could evaluate events for himself. Later, when his rank made it hard for him to accompany the troops, he built an intelligence-gathering team that reported directly to him.

"Use every available means" – MacArthur knew he couldn't fight today's war with yesterday's strategies, so he got creative. When he had to move forces from Australia to the Philippines during WWII, he did not let WWI logistics hold him back. Hampered by shortages of supplies and men, he hatched a "triphibious" approach, combining ground troops with air and naval forces. Stretching scarce supplies was his trademark. Short of supplies in 1947, he created "Operation Roll-Up" to refurbish leftover WWII gear in Japanese factories. This reclamation project armed U.S. troops for the Korean War. MacArthur became known for doing "more with less."

“Manage the environment” – In Papua, New Guinea, MacArthur's men were decimated by an unexpected enemy: malaria. Most of his troops were ill. He formed a task force to tackle the epidemic and soon greatly reduced infection rates, while Japanese troops continued to suffer from rampant malaria. "Nature is neutral in war," MacArthur later wrote, although he noted elsewhere that the army that adapts to the terrain wins.

“Utilize surprise" – Unpredictability was a MacArthur hallmark. He attacked the least obvious places, only after seeming to prepare for an assault elsewhere. Trapped on Corregidor, he escaped not by submarine – the most obvious method – but by unheard-of PT boats. He sent troops into heavily Japanese-fortified Manila to free U.S. prisoners of war. He figured no one would expect him to broach an armed city…

Click here to read on and receive a free summary of this book courtesy of getAbstract, the world's largest online library of business book summaries . (Available through June 1, 2011.)

Orwell on writing

George Orwell - author of Animal Farm and Nineteen Eighty-Four, you know the guy - took on the doublespeak that passes for political prose in a 1946 essay titled "Politics and the English Language." He offered six rules for writing clearly that all of us would do well to follow:

1. Never use a metaphor, simile, or other figure of speech which you are used to seeing in print.

2. Never use a long word where a short one will do.

3. If it is possible to cut a word out, always cut it out.

4. Never use the passive where you can use the active.

5. Never use a foreign phrase, a scientific word, or a jargon word if you can think of an everyday English equivalent.

6. Break any of these rules sooner than say anything outright barbarous.

SPC and healthcare

I think Atul Gawande, surgeon, New Yorker staff writer, MacArthur Award winner, etc., etc., is the best healthcare writer around for two reasons. First, his writing epitomizes the best New Yorker nonfiction, which I’ve been reading ever since cutting my teeth on John McPhee’s inquires into everything from Bill Bradley’s basketball chops to birch-bark canoes. Second, and more important, Gawande, unlike many writers who approach healthcare as proverbial blind men, sees the whole elephant. He looks at the woes of U.S. healthcare from a Deming-like systemic perspective that would behoove anyone concerned with healthcare reform anywhere in the world. Remember W. Edwards Deming?

Gawande’s most recent foray into the healthcare wilds, “The Hot Spotters" takes us to Camden, New Jersey, where a family physician named Jeffrey Brenner got the city’s three main hospitals to give him access to their medical billing records and analyzed the data on a desktop computer. He discovered that “just one percent of the hundred thousand people who made use of Camden’s medical facilities accounted for thirty per cent of [the city’s entire healthcare] costs.”

Brenner then set up a program to provide these “super-utilizers” of healthcare with greater attention and more education. The results: Over the long term, the hospital visits of the first 36 patients in the program were reduced by 40 percent per month and their average total monthly hospital bill dropped by 56 percent from $1.2 million to just over $500,000. Gawande points out that the net savings are lower (because of the extra attention these patients need from primary care physicians, among other things), “but they remain, almost certainly, revolutionary.” Clearly, if they could be extrapolated over Camden’s 1,000 one percenters, they could put a real dent in the city’s overall healthcare costs.

Gawande says Brenner’s program is “a strange new approach to health care: to look for the most expensive patients in the system and then direct resources and brainpower toward helping them.” This “new” approach is, of course, classic statistical process control – analyze your process outcomes, pick out the biggest variations from the mean, and address them. It’s SOP for manufacturers. If it was for healthcare systems, too, lots of low-hanging fruit would surely be revealed. But healthcare systems aren’t like manufacturing plants and their supply chains.

The major players in healthcare – doctors, hospitals, and insurers – are drowning in data, but they aren’t sharing it. The fact that Brenner got three hospitals to hand him their medical records is nothing short of amazing. And if providers and payors did start pooling and analyzing their patient data, who’s going to address the outliers that are revealed? Brenner had to scare up grants to run his program because, as Gawande writes, “that’s not how the health-insurance system is built.” That alone seems like a pretty good argument for rebuilding it.

Beauty and the beast

Tina Brown's Newsweek has an interesting new back page feature -- a guest column called My Favorite Mistake. It's probably going to turn out to be a back-handed way for famous people to stroke their own egos. But I got a kick out of the inaugural column which featured this story from movie mogul Harvey Weinstein:

One of my all-time classics happened when I took a plane to England and ran into Kate Moss and Linda Evangelista on the flight. They were both dating friends of mine and couldn’t have been happier to see me. They wanted to initiate me, as I was a two-pack-a-day smoker, into their habit of smoking in the bathroom on the plane. So, whenever one of them was there, I got away with it. But the one time I tried it myself, I got caught. I said to the attendant, “When I smoked with Kate Moss, you never busted me,” and he replied with the magic words: “You are no Kate Moss.” Could there be a truer statement? They nearly arrested me, and I had to go to court and pay a small fortune for my activities...read the rest here

Customer experience reading list

I wrote a "knowledge review" discussing my picks for the essential books on the topic of customer experience that appeared in the Fall 2010 issue of strategy+business, but I forgot to mention it here. So, belatedly, here's the article opening set in my adopted home town, a link to the rest, and the book list:

Greetings from Williamsburg, Va., an outpost on the new frontier called the experience economy. Well, maybe not so new. John D. Rockefeller Jr., the only son of Senior, who was, of course, the founder of Standard Oil and an iconic figure in the rise of the unfettered industrial economy, began buying up this sleepy Tidewater town in the 1920s. Junior’s vision: Create a living museum that would protect the heritage of the United States and transport everyone who paid the price of admission back to the revolutionary 1770s to experience colonial life, right down to the horse manure.

Colonial Williamsburg, the restored capital of England’s Virginia colony, has attracted tens of millions of visitors since then, including long-reigning Queen Elizabeth II, who visited her ancestral fiefdom first in 1957 and again, 50 years later, in 2007. It also spawned an entirely new local economy based on feeding, lodging, and entertaining all those visitors and providing housing and services for people who found jobs there, as well as for former tourists who decided, as I did, that it would be a nice place to live. The entire greater Williamsburg area is a testament to the transformative power of a compelling customer experience...read the rest here

Here are the books covered in the article:

B. Joseph Pine II and James H. Gilmore, The Experience Economy: Work Is Theatre and Every Business a Stage (Harvard Business School Press, 1999)

Bernd H. Schmitt, Experiential Marketing: How to Get Customers to Sense, Feel, Think, Act, and Relate to Your Company and Brands (Free Press, 1999)

Lewis P. Carbone, Clued In: How to Keep Customers Coming Back Again and Again (FT Press, 2004)

Leonard L. Berry and Kent D. Seltman, Management Lessons from Mayo Clinic: Inside One of the World’s Most Admired Service Organizations (McGraw-Hill, 2008)

Lior Arussy, Customer Experience Strategy: The Complete Guide from Innovation to Execution (4i, 2010)

Gosia Glinska, James H. Gilmore, and Marian Chapman Moore, “The Geek Squad Guide to World Domination: A Case for the Experience Economy,” (Darden Business Publishing, 2009), DVD

Jeanne Bliss, Chief Customer Officer: Getting Past Lip Service to Passionate Action
(Jossey-Bass, 2006)

Management ala Google?

Adam Bryant wrote a good article in today's business section of The New York Times. It appears that Google, which has been promoting people into management based on their technical skills, ended up with a bunch of managers who were lousy at managing people. Go figure!

This situation gave rise to Project Oxygen, which sounds like a pretty exhaustive analytical study of Google employees aimed at discovering how they want their bosses to behave. The findings, as reported in the Times, revealed the following 8 behaviors in priority order:

1. Be a good coach. Provide specific, constructive feedback, balancing the negative and positive. Have regular one-on-ones, presenting solutions to problems tailored to your employees' specific strengths.


2. Empower your team and don't micromanage. Balance giving freedom to your employees, while still being available for advice. Make stretch assignments to help the team tackle big problems.


3. Express interest in team members' success and personal well-being. Get to know your employees as people, with lives outside of work. Make new members of your team feel welcome and help ease their transition.


4. Don't be a sissy: Be productive and results-oriented. Focus on what employees want the team to achieve and how they can help achieve it. Help the team prioritize work and use seniority to remove roadblocks.


5. Be a good communicator and listen to your team. Communication is two-way: you both listen and share information. Hold all-hands meetings and be straightforward about the messages and goals of the team. Help the team connect the dots. Encourage open dialogue and listen to the issues and concerns of your employees.


6. Help your employees with career development.


7. Have a clear vision and strategy for the team. Even in the midst of turmoil, keep the team focused on goals and strategy. Involve the team in setting and evolving the team's vision and making progress towards it.


8. Have key technical skills so you can help advise the team. Roll up your sleeves and conduct work side by side with the team, when needed. Understand the specific challenges of the work.

This all seems very basic, although it is worth noting that technical expertise came in dead last. But I wouldn't want to have to parse some of this advice. "Don't be a sissy?" Really? Nevertheless, Google says it bumped up the performance of three-quarters of its managers using these rules. Read the entire article here...

Leadership ala Keith Richards?

I've been reading Keith Richards' memoir, Life (Little Brown, 2010), which is jaw-dropping and hilarious - sometimes by turns, sometimes simultaneously, when I came across a leadership lesson of all things. Keith is talking about how when National Service (mandatory service in the armed forces) was abolished in England in 1960, he suddenly found himself with a couple of years of free time, when out pops this passage:

My life had been plodding along nicely until I found out there was no National Service. There was no way I was going to get out of this goddamn morass, the council estate, the very small horizons. Of course if I'd done it, I'd probably be a general by now. There's no way to stop a primate. If I'm in, I'm in. When they got me in the scouts, I was patrol leader in three months. I clearly like to run guys about. Give me a platoon, I'll do a good job. Give me a company, I'll do even better. Give me a division, and I'll do wonders. I like to motivate guys, and that's what came in handy with the Stones. I'm really good at pulling a bunch of guys together. If I can pull a bunch of useless Rastas into a viable band and also the Winos, a decidedly unruly band of men, I've got something there. It's not a matter of cracking the whip, it's a matter of just sticking around, doing it, so they know you're in there, leading from the front and not from behind.
And to me, it's not a matter of who's number one, it's what works.