December 12, 2004

Best Business Books of 2004

Christmastime brings with it my list of the best business books of the year, and 2004 certainly had some great ones. While I haven't read them all cover to cover (or perhaps any, for that matter), I've spent more than my fair share of time at Border's reading for free (than they probably had in mind when they came up with that idea) and I do hope to get a copy of each of these for my library eventually. Until then, enjoy! As for the order, it's according to my opinion of the impact of the ideas within.

Let me know if I've missed any,

- Arik

Confidence : How Winning Streaks and Losing Streaks Begin and End
by Rosabeth Moss Kanter

Rosabeth Moss Kanter will convince you that the goal of winning is not losing two times in a row. In her view, success and failure are not events, they are self-fulfilling tendencies. "Confidence is the sweet spot between arrogance and despair--consisting of positive expectations for favorable outcomes."

Hardball: Are You Playing to Play or Playing to Win by George Stalk, Rob Lachenauer

Great companies stumble and fall when they lose it. Highfliers crash when a competitor notices they don't have it. Start-ups shut down if they can't develop it.

"It" is a strategy so powerful and an execution-driven mind-set so relentless that companies use it to gain more than just competitive advantage-- they achieve an industry dominance that is virtually unassailable and that competitors often try to explain away as unfair. In their "hardball manifesto," authors George Stalk and Rob Lachenauer of the leading strategy consulting firm The Boston Consulting Group show how hardball competitors can build or maintain an enviable competitive edge by pursuing one or more of the classic "hardball strategies": unleash massive and overwhelming force, exploit anomalies, devastate profit sanctuaries, raise competitors' costs, and break compromises.

Confronting Reality: Doing What Matters to Get Things Right by Larry Bossidy, Ram Charan

In their 2002 bestseller, Execution: The Discipline of Getting Things Done Larry Bossidy and Ram Charan identify why people don’t get results: they don’t execute. Bossidy and Charan are back with another stellar study on organizational behavior that shows how companies can succeed if they return to reality and examine every part of their business. Confronting Reality is based on a simple concept, but many companies approach strategy and execution in a surprisingly unreal manner and even the simplest of measurement methods, like the business model, are not applied correctly.

Cisco, 3M, KLM, Home Depot, and the Thomson Corporation are just a few of the companies that Bossidy and Charan examine. To demonstrate how to examine a business using the business model, Bossidy and Charan map out external variables, financial targets, internal activities, and an iteration stage (defined as a time to "make tradeoffs, apply and develop business savvy") to prove how a dynamically evolving business model will help improve performance.

The Daily Drucker : 366 Days of Insight and Motivation for Getting the Right Things Done by Peter F. Drucker

Revered management thinker Peter F. Drucker is our trusted guide in this thoughtful, day-by-day companion that offers his penetrating and practical wisdom. Amid the multiple pressures of our daily work lives, The Daily Drucker provides the inspiration and advice to meet the many challenges we face. With his trademark clarity, vision, and humanity, Drucker sets out his ideas on a broad swath of key topics, from time management, to innovation, to outsourcing, providing useful insights for each day of the year.

These 366 daily readings have been harvested from Drucker's lifetime of work. At the bottom of each page, the reader will find an action point that spells out exactly how to put Drucker's ideas into practice. It is as if the wisest and most action-oriented management consultant in the world is in the room, offering his timeless gems of advice. The Daily Drucker is for anyone who seeks to understand and put to use Drucker's powerful words and ideas.

The Future of Competition: Co-Creating Unique Value with Customers by C. K. Prahalad, Venkat Ramaswamy

Dwindling profit margins caused by intensified competition, a glut of commodity production and knowledgeable, web-empowered consumers will usher in "a new industrial system" characterized by "co-creating value through personalized experiences unique to the individual consumer." Under the new regime, headstrong consumers will "seek to exercise their influence in every part of the business system," and companies will accommodate them by, for example, allowing them to design their own individualized cosmetics and houseboats (an innovation whose benefits include "emotional bonding with... the company" and "a greater degree of self-esteem"). Rather than simply selling their products and services, companies will design "experience environments" that comfort the consumer in any contingency, such as General Motors' On-Star satellite communications system, which can summon help after an accident, open the car doors if the driver is locked out and direct motorists to the nearest Italian restaurant. Beneath the avant-garde terminology, the book mostly boils down to a medley of strategies to make business more consumer-friendly, like flexible pricing schemes, electronic gadgets that are easy to use instead of baffling, options and add-ons, meticulous market research and lavish customer service and support.

Seeing What's Next: Using Theories of Innovation to Predict Industry Change by Clayton M. Christensen, Erik A. Roth, Scott D. Anthony

Every day, individuals take action based on how they believe innovation will change industries. Yet these beliefs are largely based on guesswork and incomplete data, and lead to costly errors in judgment. Now, internationally renowned innovation expert Clayton M. Christensen and his research partners Scott D. Anthony and Erik A. Roth present a groundbreaking framework for predicting outcomes in the evolution of any industry. Based on proven theories outlined in Christensen's landmark books The Innovator's Dilemma and The Innovator's Solution, Seeing What's Next offers a practical, three-part model that helps decision-makers spot the signals of industry change, determine the outcome of competitive battles, and assess whether a firm's actions will ensure or threaten future success. Through in-depth case studies of industries from aviation to health care, the authors illustrate the predictive power of innovation theory in action. A unique, "outside-in" perspective on industry change, Seeing What's Next will help executives, analysts, and investors develop invaluable intuition into the future that matters to them.

The Paradox of Choice: Why More Is Less by Barry Schwartz

Whether we're buying a pair of jeans, ordering a cup of coffee, selecting a long-distance carrier, applying to college, choosing a doctor, or setting up a 401(k), everyday decisions -- both big and small -- have become increasingly complex due to the overwhelming abundance of choice with which we are presented.

As Americans, we assume that more choice means better options and greater satisfaction. But beware of excessive choice: choice overload can make you question the decisions you make before you even make them, it can set you up for unrealistically high expectations, and it can make you blame yourself for any and all failures. In the long run, this can lead to decision-making paralysis, anxiety, and perpetual stress. And, in a culture that tells us that there is no excuse for falling short of perfection when your options are limitless, too much choice can lead to clinical depression.

The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits by C. K. Prahalad

The world's most exciting, fastest-growing new market? It's where you least expect it: at the bottom of the pyramid. Collectively, the world's billions of poor people have immense entrepreneurial capabilities and buying power. You can learn how to serve them and help millions of the world's poorest people escape poverty.

It is being done-profitably. Whether you're a business leader or an anti-poverty activist, business guru Prahalad shows why you can't afford to ignore "Bottom of the Pyramid" (BOP) markets.

Got Game by John C. Beck, Mitchell Wade

Think video games are kids' stuff? Think again. Provocative new data shows that video games have created a new generation of employees and executives-bigger than the baby boom-that will dramatically transform the workplace. And according to strategists John C. Beck and Mitchell Wade, managers who understand and harness this generation's distinct attributes can leap far ahead of their competition.

Got Game shows how growing up immersed in video games has profoundly shaped the attitudes and abilities of this new generation. Though little-noticed, these ninety million rising professionals, through sheer numbers, will inevitably dominate business-and are already changing the rules.

Free Prize Inside! by Seth Godin

Purple Cow taught marketers the value of standing out from the herd, which is how companies like Krispy Kreme and JetBlue made it big. But it left readers hungry for more: How do you actually think up new Purple Cows? And how do you get them adopted by risk-averse Brown Cow companies? Free Prize Inside delivers those answers and much more. It’s a fun guide to doing innovative marketing that really works when the traditional approaches have all stopped working. Thirty years ago, the best way to sell something was to advertise it on television. But today’s consumers are cynical, and your product or service had better be more than just hype and clever advertising. Even better, it ought to come with a market-changing innovation—a free prize inside.

You don’t have to spend a fortune to create something cool that virtually sells itself. Think of simple but powerful innovations like the Tupperware party, Flintstones vitamins, G.I. Joe (a doll just for boys), Lucille Roberts (a gym just for women), and frequent flier miles. Free Prize Inside will teach you how to create those kinds of blockbusters at your own company without a bunch of MBA-brainwashed marketers. You don’t have to be a genius—you just need curiosity, initiative, and a strategy for overcoming resistance when you champion your idea.

The Art Of The Start by Guy Kawasaki

What does it take to turn ideas into action? What are the elements of a perfect pitch? How do you win the war for talent? How do you establish a brand without bucks? These are some of the issues everyone faces when starting or revitalizing any undertaking, and Guy Kawasaki, former marketing maven of Apple Computer, provides the answers.

The Art of the Start will give you the essential steps to launch great products, services, and companies—whether you are dreaming of starting the next Microsoft or a not-for-profit that’s going to change the world. It also shows managers how to unleash entrepreneurial thinking at established companies, helping them foster the pluck and creativity that their businesses need to stay ahead of the pack. Kawasaki provides readers with GIST—Great Ideas for Starting Things—including his field-tested insider’s techniques for bootstrapping, branding, networking, recruiting, pitching, rainmaking, and, most important in this fickle consumer climate, building buzz.

Changing Minds by Howard Gardner

Minds are exceedingly hard to change. Ask any advertiser who has tried to convince consumers to switch brands, any CEO who has tried to change a company’s culture, or any individual who has tried to heal a rift with a friend. So many aspects of life are oriented toward changing minds—yet this phenomenon is among the least understood of familiar human experiences. Now, eminent Harvard psychologist Howard Gardner, whose work has revolutionized our beliefs about intelligence, creativity, and leadership, offers an original framework for understanding exactly what happens during the course of changing a mind—and how to influence that process.

Drawing on decades of cognitive research and compelling case studies—from famous business and political leaders to renowned intellectuals and artists to ordinary individuals—Gardner identifies seven powerful factors that impel or thwart significant shifts from one way of thinking to a dramatically new one. Whether we are attempting to change the mind of a nation or a corporation, our spouse’s mind or our own, this book provides insights that can broaden our horizons and improve our lives.

The Wisdom of Crowds by James Surowiecki

While our culture generally trusts experts and distrusts the wisdom of the masses, New Yorker business columnist Surowiecki argues that "under the right circumstances, groups are remarkably intelligent, and are often smarter than the smartest people in them." To support this almost counterintuitive proposition, Surowiecki explores problems involving cognition (we're all trying to iden?ify a correct answer), coordination (we need to synchronize our individual activities with others) and cooperation (we have to act together despite our self-interest). His rubric, then, covers a range of problems, including driving in traffic, competing on TV game shows, maximizing stock market performance, voting for political candidates, navigating busy sidewalks, tracking SARS and designing Internet search engines like Google. If four basic conditions are met, a crowd's "collective intelligence" will produce better outcomes than a small group of experts, Surowiecki says, even if members of the crowd don't know all the facts or choose, individually, to act irrationally. "Wise crowds" need (1) diversity of opinion; (2) independence of members from one another; (3) decentralization; and (4) a good method for aggregating opinions. The diversity brings in different information; independence keeps people from being swayed by a single opinion leader; people's errors balance each other out; and including all opinions guarantees that the results are "smarter" than if a single expert had been in charge. Surowiecki's style is pleasantly informal, a tactical disguise for what might otherwise be rather dense material. He offers a great introduction to applied behavioral economics and game theory.

The Medici Effect by Frans Johansson

Why is it that so many world-changing insights come from people with little or no related experience? Charles Darwin, after all, was a geologist when he proposed the theory of evolution. And it was an astronomer who finally explained what happened to the dinosaurs.

Frans Johansson argues that breakthrough ideas most often occur when we bring concepts from one field into new, unfamiliar territory. In this space-which Johansson calls "the Intersection"-established ideas clash and combine with insights from other fields, disciplines, and cultures, resulting in an explosion of totally new ideas. The Medici Effect-referring to a remarkable burst of creativity in Florence during the Renaissance -shows us how to get to the Intersection and how we can turn the ideas we discover there into pathbreaking innovations.

From the insight that created the first Cherokee written language to the ideas that enabled scientists to read the mind of a monkey-The Medici Effect is filled with vivid stories of intersections across domains as diverse as business, science, art, and politics.

Johansson reveals the core principles-including breaking down associative barriers, routinely combining unlike concepts, and executing past your failures-that can enable individuals, teams, and entire organizations to create their own "Medici effects" in any arena of work and life.

Gurus, Hired Guns, and Warm Bodies by Stephen R. Barley, Gideon Kunda

Over the last several decades, employers have increasingly replaced permanent employees with temporary workers and independent contractors to cut labor costs and enhance flexibility. Although commentators have focused largely on low-wage temporary work, the use of skilled contractors has also grown exponentially, especially in high-technology areas. Yet, almost nothing is known about contracting or about the people who do it. This book seeks to break the silence.

Gurus, Hired Guns and Warm Bodies tells the story of how the market for temporary professionals operates from the perspective of the contractors who do the work, the managers who employ them, the permanent employees who work beside them, and the staffing agencies who broker deals. Based on a year of field work in three staffing agencies, life histories with over seventy contractors and studies of workers in some of America's best known firms, the book dismantles the myths of temporary employment and offers instead a grounded description of how contracting works.

Strategy Maps by Robert S. Kaplan, David P. Norton

More than a decade ago, Robert S. Kaplan and David P. Norton introduced the Balanced Scorecard, a revolutionary performance measurement system that allowed organizations to quantify intangible assets such as people, information, and customer relationships. Then, in The Strategy-Focused Organization, Kaplan and Norton showed how organizations achieved breakthrough performance with a management system that put the Balanced Scorecard into action.

Now, using their ongoing research with hundreds of Balanced Scorecard adopters across the globe, the authors have created a powerful new tool-the "strategy map"-that enables companies to describe the links between intangible assets and value creation with a clarity and precision never before possible.

Kaplan and Norton argue that the most critical aspect of strategy-implementing it in a way that ensures sustained value creation-depends on managing four key internal processes: operations, customer relationships, innovation, and regulatory and social processes. The authors show how companies can use strategy maps to link those processes to desired outcomes; evaluate, measure, and improve the processes most critical to success; and target investments in human, informational, and organizational capital.

Who Stole My Customer?? Winning Strategies for Creating and Sustaining Customer Loyalty by Harvey Thompson

Who's stealing your customers? Why is it happening? How can you stop it? These are the toughest questions facing virtually every enterprise. Who Stole My Customer?? is your complete guide to planning and implementing customer loyalty processes that really work-because they're built around what your customers really want.

Harvey Thompson helps you view your business and its processes through your customer's eyes … and you might be shocked at what you see. You'll systematically discover the real drivers of customer loyalty in your business, so you can focus your customer relationship investments for maximum value. Drawing on his unsurpassed experience at IBM and other world-class enterprises, Thompson shows exactly how to rebuild every touchpoint around your customer's needs … and overcome every obstacle that stands in your way. You won't just improve customer retention for a quarter or two: you'll build resilient customer relationships that resist competition for years to come.

Current customers are up to nine times as profitable as new ones, but keeping customers has never been tougher. Traditional "customer satisfaction" programs and "Have a Nice Day" platitudes won't cut it anymore. It's time you developed a customer-defined, outside-in vision of your business, plus the capabilities and infrastructure to make it real. Who Stole My Customer?? shows you how to do it. Harvey Thompson led customer-focused process improvement at Lou Gerstner's IBM, helping to drive one of the greatest transformations in business history. Drawing on his experiences with IBM and other world-class enterprises, he'll help you discover how your customers have changed, what they're expecting now, which facets of customer satisfaction actually drive loyalty … and where you're most vulnerable.

What Matters Most by Jeffrey Hollender, Stephen Fenichell

Traditionally, the answer to this question has been straightforward: growth, quarterly profits, and shareholder value. Everything else was an "externality," which is economists' jargon for "someone else's problem." But as Jeffrey Hollender and Stephen Fenichell tell us, the bottom line isn't enough anymore. Not because corporations have suddenly become enamored of losing money, but because consumers, shareholders and the general public are demanding better behavior. They want businesses to be better citizens-to do more to make sure their products are healthy and safe, their manufacturing processes cause as little pollution as possible, and their employment policies are humane and not harmful to local communities. Across the country and the world, there's an evolving consensus that we need new standards to measure and reward business performance.

The emergence of Corporate Social Responsibility is more than just a PR tactic, sales strategy, or management trend. It's the future of business. It's what companies have to do to survive and prosper in a world where more and more of their behavior is under a microscope.

The Dumbest Moments in Business History by Adam Horowitz, Mark Athitakis, Mark Lasswell

Business 2.0 magazine publishes an annual cover story called "The 101 Dumbest Moments in Business." Featuring 101 hilarious items about the year’s most unbelievably stupid business blunders, it’s hugely popular with its more than half a million print subscribers—and with the two million people who read it on the Web this year. In The Dumbest Moments in Business History, the editors of Business 2.0 have compiled the best of their first four annual issues plus great (or not so great, if you happen to be responsible) moments from the past.
From New Coke to the Edsel, from Rosie magazine to Burger King’s "Herb the Nerd," the book’s highlights include:

• a Romanian car plant whose workers banded together to eliminate the company’s debt by donating sperm and giving the proceeds to their employer
• the Heidelberg Electric Belt, a sort of low-voltage jockstrap sold in 1900 to cure impotence, kidney disorders, insomnia, and many other complaints
• the time Beech-Nut sold "100% pure apple juice" that contained nary a drop of apple juice
• the Midas ad campaign featuring an elderly customer ripping open her blouse and showing her "mufflers" to the guys in the shop
• a London videogame maker that sought volunteers who would allow the company to place ads on the headstones of deceased relatives

Grouped by theme—bosses gone bad, criminally creative accounting, etc.—The Dumbest Moments in Business History is a fun and funny look at the big-time ways that big-time companies have screwed up through the decades.

Beyond the Core by Chris Zook

All companies must grow to survive-but only one in five growth strategies succeeds. In Profit from the Core, strategy expert Chris Zook revealed how to grow profitably by focusing on and achieving full potential in the core business. But what happens when your core business provides insufficient new growth, or even hits the wall?

In Beyond the Core, Zook outlines an expansion strategy based on putting together combinations of adjacency moves into areas away from, but related to, the core business, such as new product lines or new channels of distribution. These sequences of moves carry less risk than diversification, yet they can create enormous competitive advantage, because they stem directly from what the company already knows and does best.

Based on extensive research on the growth patterns of thousands of companies worldwide, including CEO interviews with twenty-five top performers in adjacency growth, Beyond the Core (1) identifies the adjacency pattern that most dramatically increases the odds of success: "relentless repeatability;" (2) offers a systematic approach for choosing among a range of possible adjacency moves; and 3) shows how to time adjacency moves during a variety of typical business situations.

The Corporation by Joel Bakan

Bakan, an internationally recognized legal scholar and professor of law at the University of British Columbia, takes a powerful stab at the most influential institution of our time, the corporation. As a legal entity, a corporation has as its edict one and only one goal, to create profits for its shareholders, without legal or moral obligation to the welfare of workers, the environment, or the well-being of society as a whole. Corporations have successfully hijacked governments, promoting free-market solutions to virtually all of the concerns of human endeavor. Competition and self-interest dominate, and other aspects of human nature, such as creativity, empathy, and the ability to live in harmony with the earth, are suppressed and even ridiculed. Bakan believes that, like Communism, this ideological order cannot last and that corporate rule must be challenged to bring balance and revive the values of democracy, social justice, equality, and compassion.

Killing The Sale by Todd Duncan

There are approximately 12.2 million salespeople in the United States—that’s about 1 out of every 23 people! Salespeople are everywhere, selling everything imaginable. Some are making a killing, but a greater percentage end up victims of the sales industry—and their own mistakes. Some are normal bumps in the road toward success. Others are more damaging. But many are fatal to a career.

Duncan addresses these catastrophic mistakes with clarity and directness. Whether you’re a seasoned sales professional or someone considering sales as a career, Duncan’s wisdom can help you avoid errors in perception, practice, and performance that could not only kill a sale but also your career.

On Paradise Drive by David Brooks

Take a look at Americans in their natural habitat. You see suburban guys at Home Depot doing that special manly, waddling walk that American men do in the presence of large amounts of lumber; super-efficient ubermoms who chair school auctions, organize the PTA, and weigh less than their children; workaholic corporate types boarding airplanes while talking on their cell phones in a sort of panic because they know that when the door closes they have to turn their precious phone off and it will be like somebody stepped on their trachea.

Looking at all this, you might come to the conclusion that we Americans are not the most profound people on earth. Indeed, there are millions around the world who regard us as the great bimbos of the globe: hardworking and fun, but also materialistic and spiritually shallow.

They've got a point. As you drive through the sprawling suburbs or eat in the suburban chain restaurants (which if they merged would be called Chili's Olive Garden Hard Rock Outback Cantina), questions do occur. Are we really as shallow as we look? Is there anything that unites us across the divides of politics, race, class, and geography? What does it mean to be American?

Call of the Mall by Paco Underhill

Paco Underhill has a genius for retail. As a follow-up to the bestseller Why We Buy, he has written an arch entertaining ethnography of the shopping mall. Energized by two dripping cinnabons, Underhill guides readers on a walking tour to encounter senior mall walkers, teen jean and hoodie shoppers, shoe fetishists, six second sales greeters, kiosk vendors and food court diners.
He nails our ambivalence about indoor shopping saying, "the mall, like television, is an easy American target for self-loathing. We look at the mall and wonder: is this the best we could do?" He gets the devil in the details with wonderful riffs about global malls, parking spaces, the "free" gift with cosmetics, retail tribalism (Nordstrom versus Ann Taylor, Pac Sun versus Abercrombie) and why CD and bookstores have returned to city streets. But Underhill doesn't whine. When he critiques multiplex theatres, raunchy bathrooms or the absence of coatrooms, he also offers witty suggestions. For example, how to turn a well-appointed restroom into a profit center.

Underhill is convinced that online shopping and fatigued boomer shoppers are leading to the "post-mall era." This kind of prediction makes The Call of the Mall a great read. It is a smart, observant meditation--one that suggests the past and the future of our shopping culture.

The Naked Corporation by Don Tapscott, David Ticoll

If you have to be naked, you had better be buff. We are entering an extraordinary age of transparency, where businesses must for the first time make themselves clearly visible to shareholders, customers, employees, partners, and society. Financial data, employee grievances, internal memos, environmental disasters, product weaknesses, international protests, scandals and policies, good news and bad; all can be seen by anyone who knows where to look. Welcome to the world of the naked corporation. Transparency is revolutionizing every aspect of our economy and its industries and forcing firms to rethink their fundamental values.

The Keystone Advantage by Marco Iansiti, Roy Levien

In biological ecosystems, "keystone" species maintain the healthy functioning of the entire system. Why? Because their own survival depends on it. This book argues that business ecosystems work in much the same way-one company's success depends on the success of its partners.

Based on more than ten years of research and practical experience within industries from retail to automotive to software, The Keystone Advantage outlines a framework that goes beyond maximizing internal competencies to leveraging the collective competencies of one's entire network for competitive advantage.

Does IT Matter? Information Technology and the Corrosion of Competitive Advantage by Nicholas G. Carr

Expanding his article published in the May 2003 Harvard business review, Carr argues that as information technology has become more powerful and affordable, it has transformed from a proprietary technology used by companies to gain an edge into an infrastructural technology shared by all competitors. He contends IT is now a simple factor of production necessary for competitiveness but insufficient for advantage.

Predictable Surprises by Max H. Bazerman, Michael D. Watkins

Bazerman and Watkins, faculty at the Harvard Business School, define predictable surprises as "an event or set of events that take an individual or group by surprise, despite prior awareness of all of the information necessary to anticipate the events and their consequences." They cite as examples the tragedy of 9/11 and Enron's collapse. Insisting theirs is not 20/20 hindsight, they explain how many disasters are preceded by clear warning signals that leaders miss or ignore. Characteristics of predictable surprises include when leaders know a problem exists and that problem does not solve itself and gets worse, the human tendency to maintain the status quo, and the reality of a small vocal minority (special interests) that benefit from inaction. Future predictable surprises include government subsidies, global warming, government's ignoring future financial obligations in medical costs and retirement commitments, and the large obligations airlines have in frequent flyer miles.

Posted by Arik Johnson at December 12, 2004 05:01 PM | TrackBack