Books to change the way you do business
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The judges of the Financial Times and Goldman Sachs Business Book of the Year Award on Monday selected The World is Flat by Thomas Friedman as the winner of the inaugural ?30,000 prize, which was presented at a gala ceremony in London.
One test of whether the panel has chosen well will be whether managers adopt the winning title as a useful guide to doing business in the modern world and whether it endures to become one of the great business books of the early 21st century.
As one of the judges Narayana Murthy, chairman and chief mentor at Infosys Technologies, said when selecting the shortlist in September: ?Would you remember [the finalists] three years from now? Have they brought out some kind of discontinuity in how we think about the world? Is there something [in the book] that makes you do anything in a different way?
Here, Thomas Friedman and the authors of the five other shortlisted books lay out the lessons for executives contained in each title, and recommend a surprisingly eclectic list of their own favourite business books.
John Battelle, author of The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed our Culture
Lessons for managers:
?To think long term about the impact of this new technology on both business and culture. We so often get caught up in the here and now ? ?How can I compete or partner with these hot new companies?? ? but a more interesting and potentially informing question is ?What is the impact of these companies on my long term business prospects, and how might I take advantage of those trends?? To ask and answer such questions requires a historical perspective on how things got to where they are now, and the ability to confidently assess potential future paths. It is my hope that the book provides a foundation for addressing these questions, as they relate to companies like Google, Yahoo and Microsoft in particular, and the next stage of development in the internet space in general.
Favourite business book:
?I have to be honest here, I don?t read management books, and from the list of books honoured by the FT and Goldman, my sense is that I am not alone. Narrative is my bag. My favourite book that hints at these issues is [Michael] Lewis?s Moneyball. I read it early, and knew it was going to be a very big book ? it had all the elements: strong characters, a great narrative driving the book, a wonderful topic ? at least in the US ? and the wonderful element of a counterintuitive hook that seemed, upon quick reflection, to be obvious.
Pietra Rivoli, author of The Travels of a T-Shirt in the Global Economy: An Economist Examines the Markets, Power and Politics of World Trade
?Corporate managers ? especially in global companies ? almost by definition are part of the mainstream. And because their days are spent with like-minded souls, over time managers become more embedded in the mainstream and less aware of what is going on at the fringes of society.
?The main lesson for managers from Travels of a T-Shirt is that you need to pay attention to the fringes because what is radical today is often mainstream tomorrow. When I started writing Travels, the radical fringes were talking about doing away with cotton subsidies, monitoring overseas supplier factories and disclosing supplier locations. These ideas were radical in 1999, just as mandatory fire exits at work and restrictions on child labour were radical 100 years ago. Today, all of them are part of mainstream business practice, or at least mainstream discourse. Society?s demands on corporations are always evolving and, more importantly, increasing. To see what business will be expected to do tomorrow, look to the people who sound crazy today.?
?In Travels of a T-Shirt , I took the simplest example ? a $6 T-shirt ? and tried to build out from the simple to illuminate the complex. But some of my favourite books do exactly the opposite by taking on the biggest historical ideas as their territory.
?One book in this category that has stayed with me for years is Ivy Pinchbeck?s Women Workers and the Industrial Revolution. It was written almost 75 years ago, but it is still the best work on the topic of industrialisation. Unfortunately, such a book could never be written today. Though her research is astonishing in its depth, Pinchbeck uses none of the jargon that has accompanied the narrowing of the disciplines, she glides back and forth from economics to sociology, labour relations to gender studies, without ever mentioning any of these words. And, unlike today?s professors ? who write themselves out of their research ? the reader meets Pinchbeck herself on every page.
?To understand what industrialisation means for women, either yesterday or today, there is no better book.?
Constantinos C. Markides, co-author, with the late Paul A.Geroski, of Fast Second: How Smart Companies Bypass Radical Innovation to Enter and Dominate New Markets
?Successful innovation is a coupling process that requires the linking of two distinct activities: coming up with a new idea (ie invention) and creating a market out of the idea (ie commercialisation). The skills and competencies needed for invention are not only different from those needed for commercialisation, but they also conflict with each other. This implies that the firms that are good at invention are unlikely to be good at commercialisation and vice versa. Very few firms are good at both of these activities. Big, established firms are not good at invention but they are excellent at commercialisation.
?Therefore, big established corporations should not even try to create radical new markets. Instead, they should subcontract the creation of new radical products to start-up firms and concentrate their efforts on consolidating these markets. This is a model that is widely used in creative industries such as book publishing, theatre, galleries and movie-making, where companies live and die on their ability to continuously bring creative new products to the market.?
?My favourite business book is Kenichi Ohmae?s The Mind of the Strategist , a book that was originally published more than 25 years ago. The author shows that developing strategy is more an art than a science and that intuition is as important as analysis ? both important points that we seem to have forgotten in the past 20 years! He also argues that there are certain simple but fundamental principles underlying every successful strategy. Thus, the building blocks of the successful Microsoft strategy of today are the same as the building blocks of the strategy which propelled Sears to industry leadership 100 years ago.
?For me, this is the best book ever written on strategy ? it demystifies the subject and argues for some eternal ?truths? about strategy.?
Steven D. Levitt and Stephen J. Dubner, authors of Freakonomics: A Rogue Economist Explores the Hidden Side of Everything
Levitt: ?I think the most important lesson for managers in our book is that the conventional wisdom is often wrong. This is true in society as a whole and also within organisations.
?Most businesses I have been involved with have a large set of ?truths? that are shared by all involved and rarely, if ever, challenged. These truths relate to what customers want, how products should be distributed, the importance of advertising, how pricing should be done, what lines of business the company should be in, etc. Often, however, when one scrutinises such beliefs, the data don?t support the gospel. Our book is all about forcing yourself to ask why we believe what we believe, rather than simply accepting it.?
Dubner: ?We look at the world from a different angle by exploiting the following methodology: 1) be willing (indeed, eager) to up-end the conventional wisdom; 2) work hard to get the data you need, from whatever sources necessary, to fully understand your field of interest; 3) ask the questions of those data that might seem unseemly, perhaps even vaguely heretical, because oftentimes the only way to get beyond the veil of modern life is to ask such questions.?
Levitt: ?My favourite business book is A Whack on the Side of the Head by Roger Von Oech. It certainly is not a traditional business book. It is a book about how to generate ideas.
?My view is that business people spend too little time trying to generate ideas and too much time making reports.
?I always go back to this book when I am stuck in a rut.?
Dubner: ?Choice and Consequence by Thomas Schelling. From one of the most creative economists in history, a hugely readable and vastly educational look at how economic thinking can be applied to any aspect of life. It was good to see that Schelling finally won the Nobel Prize this year, primarily for his work in game theory.?
James B.Stewart, author of DisneyWar: The Battle for the Magic Kingdom
?A cautionary tale from the age of the imperial chief executive, the events of DisneyWar served as a case study in a recent Columbia Business School class I attended. One of the management themes that emerged was the importance of checks and balances, and the willingness of a CEO to encourage and sometimes act upon dissenting views. Early in CEO Michael Eisner?s tenure, when Disney was essentially run as a triumvirate of Eisner, president Frank Wells, and studio chief Jeffrey Katzenberg, with meaningful oversight from the board, Disney thrived.
?After Wells?s tragic 1994 death, Eisner consolidated power, drove Katzenberg out of Disney and turned him into a competitor, and stacked the board with pliant cronies and others with blatant conflicts of interest. Irwin Russell, a director and chairman of the compensation committee, was Eisner?s personal lawyer, the same person who negotiated his Disney employment contract. Disney?s financial and creative performance spiralled downwards.
?DisneyWar?s detailed dissection of Eisner?s manipulation of board members, including his purge of those who dared to dissent, is an object lesson in how not to manage a board of directors, as a Delaware Chancery Court judge noted in a widely followed recent opinion. Ultimately no one?s interests were served by a CEO whose unchecked ego ran amok: certainly not shareholders, whose investment has never recovered the value it had in 1998; not Disney?s customers of recent tepid animated fare like Home on the Range; not even Eisner himself, driven from power by a shareholder revolt, his once glowing reputation in tatters.?
?To Joan Didion, V.S. Naipaul and Tom Wolfe, I owe the inspiration and ambition to write non-fiction that rises to the level of fiction, but All the King?s Men by Robert Penn Warren remains my favourite book many years after first reading it in college. Mesmerised by the narrative, I lost sleep finishing it and discussed it avidly with fellow students. Since then I have re-read it for inspiration, especially while working on Blood Sport, my book on politics, real estate and the new South during the Clinton years. I continue to be amazed by the complexity and nuance Penn Warren captured within an intricate but always clear narrative, the depth of characterisation and his sympathy for his flawed but richly human characters, and the timelessness of its broad themes.
?It is also a frankly ?realistic? work, set squarely in the worlds of politics, law and business. It is a novel, but one based on actual people and events in Depression-era Louisiana. To me it embodies the power of a factual narrative to entertain, inform, and to some degree touch the hearts and minds of those who read it.?
Thomas Friedman, author of The World is Flat: A Brief History of the Globalized World in the 21st Century
?Most important lesson: think horizontally. The world is moving from a place where value was created in vertical silos of command and control to a world where value is increasingly going to be created horizontally by how you connect and collaborate ? how you synthesise this with that. The big breakthroughs are going to come from putting biology and computer science together (biomedicine) or math and marketing (Google). So think flat, think horizontally. It?s great to have people who can forge dots, it?s even better to have people who can connect them.?
?My favourite business book: A Whole New Mind: Moving from the Information Age to the Conceptual Age by Dan Pink.?
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