Baker’s Dozen Best Business Books (Plus A Few)
Today I was in one of the most interesting Sage Summit sessions I’ve been in. Interestingly I don’t think it was one where I actually directly learned anything. Rather it’s one where I’ve managed to pick up a great deal of potential learning or stated another way I’ve learned about a few more books to add to my unlibrary.
Note: All links on book titles are links back to Amazon.com.
This is a list of Ron Baker’s thirteen (give or take) favorite business books. In order for a book to make this list, Ron Baker’s criteria are: Does it change your world view? Or does it change how you act? To make this list these books had to do both for Ron.
13 – Black Swan – Nassim Nicholas Taleb – The title of the book is a metaphor. When England sent convicts to Australia there was the belief in the “civilized world” (aka Europe) that there was no such things as a black swan anywhere in the world. However on arriving in Australia these “colonists” discovered black swans. It took them some time to accept that these were indeed swans and that yes they were indeed black. The point being that while risk is something you can measure, creativity always takes us by surprise.
One example in the book talks about Las Vegas casinos having incredible control systems and how they almost never lose money due to theft. However they lost one performer who was mauled by a tiger and they never saw that coming and yet we all sit here after the fact (playing Monday morning quarterback) and explain how of course we expected it. That’s a black swan. 9/11 was a black swan. It’s the black swan events that change the course of history. It’s what we don’t know that makes life fun.
Also check out: Presentation for The Long Now Foundation by Nassim Taleb
Robert’s Two Cents:I’ve personally owned this book for at least a year and never read it. It’s difficult to get started but (allegedly) well worth it if you can get going reading it.
12 – Start With Why – Simon Sinek- “People don’t buy what you do, they buy why you do it.” MLK didn’t say “I have quarterly projections.” He said, “I have a dream”. Sinek talks a lot about companies that have lost their Why because they have lost their leaders over the years in his book. What you believe and why you do things have a lot to do how you do things. The emotional side is the part of your brain that doesn’t understand language. What really motivates us?
The corollary of this is not to sell to people who want what you have. It’s to sell to people who believe what you believe. You want to hire people who believe what you believe.
Also check out: Simon Sinek’s Ted Talk on Start With Why
Robert’s Two Cents:I’ve seen Simon Sinek’s Ted Talk video several times now and listened to the audio of it even more. I also listened to half of the audio book version on the train to Washington DC Friday night. The audio book was really good. It is read by Simon Sinek himself who is passionate about the material in the book and he makes it really enjoyable.
11 – Abolishing Performance Appraisals – Tom Coens & Mary Jenkins- “Appraisal is primarily the paper-shuffling that sanctifies decisions already made.” Coens, an attorney, dispels the idea that you need to do annual appraisals to prevent a lawsuit and even cites why annual appraisals may hurt you in the event of a lawsuit. They also discuss ways to replace the performance appraisal.
Why do we wait for a fixed date to deal with issues? Nobody really takes them serious and they are frequently late.
Peter Drucker’s management letter is a good replacement for the performance review. This is the model that Proctor & Gamble uses.
A book written by Samuel Culbert is a good one on this topic too. Provides a better replacement, Get Rid of the Performance Review!
Robert’s Two Cents:I have only had 3 performance appraisals ever that were performed on time and almost all of them were predetermined reports where I just read through it or the person giving the review essentially read through it and we both signed it.
10.5 – Why Work Sucks – Cali Ressler & Jody Thompson– ROWE (Results Only Work Environment): Cali Ressler and Jody Thompson setup a ROWE at Best Buy corporate headquarters. In a ROWE, you work when and how you work. You get paid for results regardless of how you work and how long it takes. Meetings are voluntary. One of the problems they were trying to fix was that they wanted to eliminate the Sludge (negative comments about how other people work). They implemented one department at a time. There were approximately 2,790 people at Best Buy HQ working within their ROWE when Ressler and Thompson completed their project and they achieved an in crease in productivity of 35%.
If you are judged based on results, won’t you make sure you understand what your boss wants?
Definition of ROWE – Free to do whatever and whenever you want, as long as the work gets done.
ROWE is like Tivo for your work.
Social pressure; don’t do your work, voted off the island.
Reward the outcome, not the activity.
Removes sludge, presenteeism.
2,790 Best Buy employees under ROWE; 35% increase in overall productivity, retention up, lightning rod for talent
Best Buy is going to test ROWE in retail outlets next
We don’t understand how to keep people accountable for results. Our systems are setup to track efforts.
Robert’s Two Cents:While technically not one of the 13 books on Ron Baker’s Baker’s Dozen, we spent a not insignificant amount of time talking about this book. I think the reason Ron has dropped this book from his Baker’s Dozen is because there is another work later on this list that more accurately describes what he thinks a workplace should look like. See # 8 on the list for more.
10 – The Strategy and Tactics of Pricing – Thomas Nagle & Reed Holden – Best book ever written on pricing. There are newer editions by Nagle and other authors. This is the book that puts pricing on the map. Tom Nagle puts economic horsepower behind pricing theory in the book. In subsequent editions of this book, Nagle has other co-authors. Reed Holden has another book on pricing, Pricing with Confidence.
The book discussed the cost plus pricing model:
Product – Cost – Price – Value – Customer
And introduces the following model:
Customer – Value – Price – Cost – Product
“The single most important decision in evaluating a business i sprucing power” – Warren Buffet
Robert’s Two Cents:I haven’t read either book. I do own Pricing with Confidence and plan to read it sooner than later.
9 – The Only Thing That Matters – Ken Albrecht– The book that Introduced Ron to the idea of value pricing. The book is about Total Qualty of Service (TQS). From here Ron made the leap from the ideas in this book to the idea that the billable hour made for a horrible customer experience. Albrecht is a fantastic writer. This isn’t his best written work.
Why does the government call us taxpayer? Why do we call customers clients? What happened to the word customer?
Robert’s Two Cents: My secret confession in this list is that I had the realization that the billable hour didn’t make sense after only working as a staff consultant for six months. I still haven’t fixed that and converted to fixed fee engagements. It really makes the most sense. Done right, it means a lot of work upfront that despite Ed Kless’ protestations otherwise isn’t very likely to be paid upfront by the customer.
8 – Seven Day Weekend – Ricardo Semler– The ideas in this book are even more extreme than a ROWE. Semler’s company has no org chart, business plan, corporate strategy, short or long-term budget. It has no mission statement, CEO, job descriptions, career plans, HR department, or expense report audits. He hires people not needed who can contribute value. His company places ads that say “We’re not hiring but if you have something to contribute come in and talk to us”.
Most people flourish under freedom, flexibility and responsibility.
Several interviews and talks: http://www.youtube.com/results?search_query=Ricardo+SemlerI’m still looking for one that he gave as a talk at Wharton.
Interesting article: http://www.bbc.co.uk/worldservice/learningenglish/work/handy/semler.shtml
Robert’s Two Cents:I really want to read this book. The guy sounds like a man after my own heart. This is the book that I think bumped the ROWE book off the official list. The one thing I’ve discovered recently is that some employees really crave the structure that is provided by an 8 to 5 cubicle job.
7 – Profit Beyond Measure – H. Thomas Johnson- Studied Toyota and their lack of a cost accounting system and he explains how they operate in this book. For us that’s like operating without time sheets. They use Target Costing. Toyota is looking at what it will cost them to build the car before they begin building the car and often before they build the prototype.
Robert’s Two Cents:I’ve read a summary of this book before. I know we discussed the material in at least one of my managerial accounting classes back in college.
6 – The Sum of Our Discontent – David Boyle – What you can measure you can manage is BS. This inspired Ron’s Measure What Mattersbook. This is where the suggestion of looking at KPI as Key Predictive Indicators comes from.
Paul Dunn who cowrote The Firm of the Futurewith Ron recommended this book to Ron.
Robert’s Two Cents: I’m actually in the process of Reading Ron’s Measure What Matters. It’s a great book. It’s probably the second easiest to read (after Implementing Value Pricingwhich I still haven’t finished).
5 – The Future of Management – Gary Hamel- He writes about what the firm of the future looks like. He focuses on Google and Goretex. Management as a discipline has not evolved since the industrial era. All of our management concepts are at least 50 years old. And most of them are over 100 years old. We’re not an industrial economy any more.
Robert’s Two Cents:
4 – Business As a Calling – Michael Novak– Michael Novak is a theologian. He makes the moral case that enterprise is a moral venture. He discusses Carnegie and how he intended to give away all of his wealth before his death and he failed due to compounding interest. He talks about the seven internal responsibilities of business and seven external responsibilities of business.
Robert’s Two Cents:This sounds like a good book about how you can be a good business person and a good citizen at the same time.
3 – Minding the Store – Stanley Marcus- The father of customer service. You’re not in business to make a profit, but you’re in business to render a service that is so good people are wiling to pay a profit in recognition of what you’re doing for them. It’s the story of Neiman Marcus. He ran it through the Great Depression and never didn’t make a profit. He invented the fashion show. This is the best book on customer service ever.
His CMO for 20 years, there are two things that exceeded his expectations the bohemian club and Sofia Loren.
Stanley Marcus is alleged to have said, “A market never came into my store to buy anything, but a lot of customers sure did“.
Robert’s Two Cents:While it is Stanley Marcus’s autobiography, this is really a treatise on how to provide good customer service.
2 – Wealth and Poverty – George Gilder- Written in 1981. The US must overcome the materialist fallacy. Wealth and poverty. Ron Baker says, “If you read only one book from this list read this one twice. Find the 1981 version if you can”.
Profit is an indicator of the altruism of a business.
Robert’s Two Cents:Another book on how business makes the world a better place. And if Ron Baker says I need to read it twice, I should at least read it once.
1 – Peter Drucker: Shaping the Managerial Mind – John E. Flaherty- You wouldn’t need an MBA if you read everyone of Drucker’s books. He focused on the people side of management and he thought management should considered to be a liberal art. Sales and marketing are not complementary. They are adversarial. If your marketing department did their job sufficiently, you wouldn’t need sales people. Drucker coined the terms knowledge worker and privatization.
Ethics are ethics. There is not such thing as business ethics.
Drucker wasn’t right about everything. He was right about a lot of things. Ultimately he helps you sharpen your thinking.
Also: Effective Executive.
Robert’s Two Cents: Honestly, I’ve read some Drucker over the years since Ed Kless introduced me to him in 2005 at the Sage Consulting Academy. It’s all good stuff. I know Ron said if you only read one book from this list read Wealth and Poverty, but for me, this would be the one to read. Plus it’s number one on the list.
For a more complete list check out Ron Baker’s Shelfari list of his All Time Top 100 Business Books