What Chief Executives Read
How some of the best business minds get their information
Let's make one thing clear at the outset: the people in this article are not normal. Not by a long shot.
That's because, as we all know, normal entrepreneurs don't read that much. They don't have time; running their companies takes all their energy and then some. Sure, most small-company managers peruse some magazines and trade journals, listen to tapes while commuting, and maybe occasionally pick up something else during an airplane flight. But as for much more -- who has the time?
As anyone familiar with the stresses of growing a company can attest, this attitude makes a good deal of sense. That's why we're continually surprised to find people who swear that, despite the many other demands on their time, they wouldn't miss reading books for anything.
Businesspeople who are consultants or whose companies have already grown large and prosperous are not the only ones who make the time to read. There are managers in all fields, at all stages of success and company development, who make reading an integral part of their strategies. Frequently, they apply the ideas they read about to their companies. Every once in a while -- as in the case of the managers at United Electric Controls Co. -- they say that reading transformed their entire organization.
That, we figured, was worth finding out more about. So we've talked with a number of businesspeople who are avid readers, and for good measure we added a few business authors. We asked them why they read, what's influenced them most, and how -- given an infinite amount of information and a very finite amount of time -- they determine what's worth the effort.
Here are some of their answers.
Occupation: chairman, Stew Leonard's, $100-million dairy store in Norwalk, Conn.
Education: undergraduate work in agriculture
Recommended Reading: How to Win Friends and Influe nce People by Dale Carnegie
Why: It reminds him of the importance of listening and of making other people feel important. "It's the greatest book there ever was. I've read it 15 times. I even bought the tape to listen to in my car."
Reading that Helps Me Run the Company: Leonard reads primarily to remind himself of basic management principles, "the little simple stuff that's so important you forget." He adds, "I look for analogies -- little stories I can use in my business."
As his company grows, Leonard sees his role as spreading those little stories and ideas among his people. But he finds he doesn't have much luck convincing employees to read books by giving them out. So as he's reading a book he likes, Leonard highlights the important thoughts -- and then a secretary summarizes and types those passages for his managers. Similarly, if he finds helpful magazine articles, he cuts and pastes excerpts -- usually the beginning, the end, and a good story from the middle -- to make one-page summaries that he copies and passes out.
Other Favorites: Minding Your Own Business by Murray Raphel
Earl Nightingale's Greatest Discovery: The Strangest Secret
. . . Revisited by Earl Nightingale
Father, Son & Co.: My Life at IBM and Beyond by Thomas J. Watson Jr. and Peter Petre
The Unnatural Act of Management by Everett T. Suters
Beyond Survival by Gerald Coffee
Good Advice by Leonard Safir and William Safire
A Passion for Excellence by Tom Peters and Nancy Austin (not a surprising choice; Leonard is featured in the book) What To Skip: Memoirs by arrogant CEOs
Choosing Books: Leonard selects new books -- one or two a week -- by reading reviews in Publishers Weekly. Keeping Track: For the past 20 years Leonard has excerpted interesting quotes and has filed them in 14 large plastic photo albums under 68 categories, such as analogies, religion, and work. He uses the quotes in the company newsletter, in speeches, and for personal uplift: "I've never picked one up and read it that I didn't feel better."
Occupation: president and CEO, Step Ahead Investments, in West Sacramento, Calif. The $20-million company was #79 on the 1989 INC. 500; it includes a chain of retail stores selling all items for 98 as well as a wholesale liquidation business.
Education: high school
Recommended Reading: Quiet Desperation: The Truth About Successful Men by Jan Halper
Why: "A business is so all consuming that to achieve success there are other parts of your life that must be compromised -- family, friends, marriage, personal pleasure. Quiet Desperation deals with putting the necessary compromises in proper perspective without feeling guilty. The book has helped me cope with guilt."
Straight to the Bottom Line: Cino reads mostly how-to and self-help books, looking for ideas to use in his company or ways to improve his business abilities. But whatever he's reading, he has the day-to-day affairs of his company in mind, as well: "I always look for opportunity."
For Cino, opportunity crops up in some strange places. Take an article in a local paper about a truck accident. Too bad, most people would think and turn the page. Cino, on the other hand, already had designs on the tomato paste the truck had been carrying. It, he reasoned, probably now belonged to some insurance or trucking company -- which might be willing to sell at a price below market value.
Or take an article in INC. two years ago about a consulting firm's traumatic experience with a dishonest employee. It was a cautionary tale -- or that's what we saw. Cino saw something different: the company ended up with a warehouse of auto parts the employee had bought with embezzled funds. Those parts, Cino figured, might be cheap.
In his search for deals, he reads three papers, six or eight magazines, four or five business weeklies, listens to business radio, and watches financial news. "We need exposure to as many situations as possible to buy something at a price below 98¢," he says. "To do that, you've got to be turning over a lot of rocks."
Keeping Track: Cino tapes quotes and anecdotes from his reading, then intersperses them with brief Step Ahead ads to play for callers on hold. "We've had people request that they get back on hold; they wanted to hear the rest of the story."
GEORGE N. HATSOPOULOS
Occupation: chairman, president, and founder of the Waltham, Mass.-based Thermo Electron Corp., a $579-million manufacturer of heat-transfer and energy-conversion products.
Education: Ph.D. in mechanical engineering
Recommended Reading: The Age of Diminished Expectations: U.S. Economic Policy in the 1990s by Paul Krugman
Why: "We cannot automatically expect the growth in the standard of living and the economy that we've seen in the past will take place without making some hard choices. This book is very informative about those choices, and it's not very technical."
Reading that Helps Me Run the Company: Now that his company is large, Hatsopoulos sees one of his main duties as looking at the big picture, both economically and technologically. In that role, he can keep his managers up-to-date while they concentrate on running the business. His job, he feels, requires staying abreast of current events, as well as many scientific and economic papers. "A lot of the planning that we're doing does relate to how we visualize the future," he says. "If you make an error, it will cost you a lot." Hatsopoulos uses what he's learned about economics, for example, to better evaluate the many varied forecasts that economists produce.
Occupation: founder, The Tom Peters Group, a $10-million consulting and training-products company in Palo Alto, Calif. Wrote Thriving on Chaos; coauthor of In Search of Excellence and A Passion for Excellence.
Education: M.B.A. and Ph.D. in business
Recommended Reading: The Soul of a New Machine by Tracy Kidder
Why: "If you want to construct a good R&D strategy, take your favorite textbook on R&D planning and burn it and reread The Soul of a New Machine. It's business anthropology, a good, rich explanation of the mess and confusion of organization life."
The Soul of a New Machine isn't Peters's favorite business book, however. That, The Social Psychology of Organizing by Karl E. Weick, isn't one he recommends for popular consumption. "It's a thin, very academic text that I read in 1971. It set everything I thought I knew about anything from a professional perspective totally on its ear; it was just so completely antithetical to the great traditions of organizational thinking. A lot of it is stuff that today lesser mortals call corporate culture. The corporate-culture thing has been so simplified, cheapened, bastardized -- but what Weick was writing was the real true grit without the phony labels."
Peters thinks Kidder's book deals with the same issues in a more readable fashion. "Kidder is doing, Kidder is operationalizing what Weick is writing about -- without creating the theoretical tangle. Then you put the two together, and you've got magic."
Reading Plan: If we could lay out Tom Peters's reading plan, we figured, that would really give INC. readers some ideas to think about. There's just one catch: there isn't one. "I am mortally and morally opposed to the idea that there should be a plan," says Peters. "I find that idea disgusting because 90% of what I find that's interesting comes from someplace other than where it's supposed to come from. So I take perverse pride in being a garbageman of the first order." That means skimming management books and countless trade magazines, looking for case studies of interesting companies -- and not worrying until much later about how to organize them.
Peters argues that innovation in ideas is like innovation in companies -- a disorderly process that never takes place as planned. "The whole problem I have with pattern is that you're ready to read things at certain times and not at others." He cites the example of Future Perfect by Stanley M. Davis, which he put down unfinished in 1987. Two years later he picked it up and found it one of the most important business books of the decade.
Keeping Track: Putting down and picking up a book after two years may sound in keeping with the author of Thriving on Chaos. But how does Peters organize his clippings until he's ready to read them?
Generally, he doesn't. Peter's main organizing principle is the pile -- piles of books lying around, piles of papers waiting for the time to be right. Most of the piles aren't structured, "but I have a pretty good feel in my head as to what's in them." Gradually the piles spill over into file boxes, and when it's time to write, Peters plows through them with a dictating machine. For his current book, there were about 10 boxes, yielding 400 to 500 pages of notes. Although Peters plans his books before he goes stack searching, he is "disappointed if the process of going through the piles doesn't change them dramatically," he says.
Occupation: CEO, Computer Output Printing Inc., a 23-employee electronic-printing company in Houston.
Education: B.S. in math
Recommended Reading: The Magic of Thinking Big by David J. Schwartz
Why: Plata read the book when he was 22, and it changed his view of life, he says. "I'm Hispanic, and I grew up in an environment where the way you sought happiness was to limit your expectation level. I was reared around people who spent all their time telling themselves to be satisfied with what they had; in fact, it was socially incorrect to aspire to more. And that book said, no, the way to seek happiness is to accelerate your expectation level and then allow yourself and all your talents to catch up to that level. It was a whole new paradigm for me."
Reading that Helps Me Run the Company: "I probably give and pass out as many books as some small bookstores," Plata jokes. His employees, for example, all received a copy of I Know It When I See It by John Guaspari. "We use that throughout our company as a bible on quality. And there's no excuse for not reading it because it can't take you longer than a lunch hour." Plata also requires that employees choose books they want to read as part of their annual goals.
Plata's in the book-giving business because he's trying to ensure that his employees -- and the people with whom he does business -- share his working assumptions. Reading "provides a common communication experience among people," he says. "If you and I have both read The Magic of Thinking Big, there are certain things we can talk about and refer to in the book."
Take The Regis Touch by Regis McKenna, a book that promotes strategic alliances among large and small companies. In the mid-'80s, Plata gave away several hundred copies to contacts at big computer companies. "We wanted them to get the idea of networking four to five years ago, before it was the byword in business -- and with tiny companies like ours. It worked extremely well. You'd go into people's offices, and there would be their Regis Touch, and they'd be talking about networking. We were able to develop some extremely good business alliances early on, before everybody else was trying."
Plata clearly uses ideas that he's read about. In particular, The Gold-Collar Worker by Robert E. Kelley has influenced his ideas about managing today's young, educated "knowledge workers." These gold-collar workers want a chance to act independently and see the results of their work, and view their careers as businesses to be managed, Kelley writes. Plata implemented Kelley's ideas through a companywide monthly bonus system, so that employees could see the results of their efforts more.
Choosing Books: Plata picks books based on friends' recommendations, Wall Street Journal reviews, and monthly synopses from Soundview Executive Book Summaries, a book-review service in Bristol, Vt. Plata is so convinced of the value of sharing reading that his next aim is to get the book-review company to set up a volume discount, so he can distribute copies of their synopses to all his business contacts. "My goal is to have 1,000 people in the United States reading the same book summary each month. Then when we talk, we'd all have some common experience."
Occupation: CEO, CareerTrack Inc., a professional training company. Founded in 1982, the Boulder, Colo., company has been on the INC. 500 three times and had 1989 revenues of $62.5 million
Education: B.A. in business marketing
Recommended Reading: The Executive Odyssey by Frederick G. Harmon
Why: "It was probably the most important book of my career. There was one chapter that really knocked me out. It was on how CEOs tend to be lousy listeners. It's speaking and communicating that got them where they are, yet listening is the skill that makes them most effective once they get to the top."
Reading that Helps Me Run the Company: "I have a weekly meeting with senior staff, and I always hand out at least two or three articles that I think our managers would find useful. I almost see myself as the screening person -- I try to give them the cream of what I come across." Calano also regularly implements specific ideas that he finds while reading; for example, he completely revamped his performance-review system several years ago along the lines suggested by Andrew S. Grove in High Output Management
Where I Do My Best Reading: Calano thinks it's important to have a reading center. "It should be comfortable. You have to have just the right chair -- one with low arms -- and nonglare lighting." Calano's center is in his home study, where he also has pen, paper, and dictation machine to record his reactions.
Reading Plan: "This is going to sound a tad compulsive, but it really works for me." Calano sets a goal: the number of books he's going to read in a year. "I create numbered lists with blank spaces and fill in the titles. This year I went further; I went through my library and pulled about 20 titles I want to read in 1990 and put them in categories, such as big ideas, marketing, biographies."
Getting Through Magazine Buildup: "Years ago I had this one room in my home that collected all of my unread magazines. And it got so bad, the stacks got so tall that I just shut the door and didn't want to deal with it. I figured there had to be a better way." Here's what he came up with: having his assistant copy the tables of contents of the 20 to 25 magazines he subscribes to. Calano then circled the articles he felt were pertinent, and his assistant copied them. That way he could keep the original issues intact for reference. "I am essentially creating my own magazine each week. When I go on a trip, I just take that thin little file and pitch the articles when I'm through reading them." More recently Calano decided to get second subscriptions to clip -- "I missed things like four-color photographs."
Occupation: CEO, Diedre Moire Corp., recruiting firm based in East Brunswick, N.J., with revenues of $2.3 million; #139 on the 1988 INC. 500.
Education: high school
Recommended Reading: The Entrepreneur's Manual by Richard M. White
Why: "The best book I've ever read for an entrepreneur starting out; I used it extensively when I first built my own business. It doesn't go into detail about any one subject, but it discusses everything and puts it into a frame of reference. It's been very helpful in setting objectives; that book was what started me writing plans, and now I have plans for everything. There are a lot of other books I read that cover the same subject matter in more detail -- but that's the best all-around guide and primer."
Reading that Helps Me Run the Company: Reuning is convinced reading can teach him anything. "If you know how to look for books, it's great. You can go into any marketplace you want and do just about anything you want, because other people have done it, and in how-to books they'll tell you what went wrong and what went right." Whenever Reuning plans to try something different, he contacts the local librarian for help tracking down resources. "A lot of our marketing stuff comes right out of books. Our current direct-mail piece was designed purely by formula from a direct-marketing book." He is constantly trying out things he reads: recently he began implementing Harvey Mackay's advice in Swim with the Sharks Without Being Eaten Alive to create a file of personal information on customers.
Choosing Books: "I go into the new-nonfiction section of the bookstore once a month and look at the business titles. I usually purchase most of them. I have easily 1,500 books."
Books as Mentors: "Sometimes it's hard to get actual mentors, models that you can talk to all the time. I use biographies that way. If I'm in a certain situation, I'll think about the biography of two or three people who were doing the same kinds of things. Sometimes I'll go back and skim them for chapters that apply. You draw your conclusions based on what those successful people typically would have done." Where'd he get that idea? From a book, naturally: Reuning was inspired by Think & Grow Rich by Napoleon Hill, which discusses the value of using great people as role models.
Passing the Word Along: Reuning figures that since there is no established career preparation for becoming a recruiter, his company had better provide one. As part of the company training, Diedre Moire has an internal lending library of roughly 400 volumes, 120 videos, and 1,000 tapes. "A big part of the strategic design of our culture is learning, teaching people how to learn."
MARINA P. ZAZANIS
Occupation: CEO, NMR of America Inc., in Morristown, N.J., a $15-million company that installs and maintains medical-imaging systems; #40 on the 1990 INC. 100.
Education: B.A. in English
Recommended Reading: The Greek Passion by Nikos Kazantzakis
Why: " The Greek Passion is about Holy Week and a Passion play being performed in a Greek village. It's a story about how the people take on the parts of the characters. You get a tremendous amount of analysis of character. Kazantzakis gives you the person, but he also gives you what's underneath the person in great depth. The book was very powerful to me."
Reading that Helps Me Run the Company: Like most CEOs, Zazanis has to keep up with business news. However, she says it's the fiction and poetry she's read all her life that helps her understand the people she works with. "Really," she says, "what is a company? It's the people." Usually the insight into human nature her reading brings her is general, but every once in a while it's quite specific. "In every business there are people in sales. To understand them, I go back to Death of a Salesman. It must be a difficult life; they're away from home a lot; they're eating alone a lot. And all those relationships -- people in sales must wonder, are these people really my friends, or is it business? Reading that book helped me understand why salespeople might take certain liberties that would not be acceptable in other areas."
Zazanis approaches new business situations as if she were starting to read a novel -- looking for clues about the characters and plot as she tries to figure out how the story will end. "What is a novel? It's a slice of life. It's an adventure. And I see business that same way. I think that as a result of reading novels and understanding the structure, I can understand the plot that's going to develop within my own company."
Occupation: CEO, Age Wave Inc., a training and consulting firm specializing in products and services for an aging population; speaker; and author of eight books, most recently Age Wave.
Education: Ph.D. in psychology
Recommended Reading: Flatland by Edwin A. Abbott Why: "It was one of the most useful books I've ever read. A lot of my perspective on redesigning America for an aging population comes from having read Flatland. The book describes this world that has only two dimensions in it. By the time the book is over, you can see how to function and relate to the other beings, all of whom are in the same two dimensions as you. At the end of the book they discover there are three dimensions. And it blows your mind! You say, 'There can't be three dimensions!' To me, that exercise of constructing an artificial world and then seeing how everything has to shift if you add a new dimension to it is similar to imagining how our world would need to change to be better designed for an aging population."
Reading that Helps Me Run the Company: The more Dychtwald learns about business, the more he swears by science fiction. He's always been a science-fiction fan, but ever since he started his own business in 1983, he finds he needs fantasy as an antidote more and more. "I get more of my ideas about longevity and aging from novels and science fiction than I do from stuff in the field. The more ordered and rigid my life has gotten in the world of business, the more I find it's really important for me to read science fiction -- because most creativity happens around the edges of normal reality." Among his favorites:
Dune by Frank Herbert
Time Enough for Love by Robert A. Heinlein
The Mind Parasites by Colin Wilson
Son of Man by Robert Silverberg
The Foundation Trilogy by Isaac Asimov
Keeping Track: Dychtwald does read a great deal of nonfiction material in his field. He also has an assistant comb through magazines and newsletters, looking for articles on aging and on industries in which the company currently has projects. When he needs to learn more about particular subjects, Dychtwald hires clipping services or the business research firm Find/SVP. He also recruits people he meets around the country to exchange interesting articles with him; he estimates he gets about 20 articles a day that way.
Choosing Books: Dychtwald asks other people for their five favorites. "It's terrific, because usually people have their own cherished list, and instead of having to hunt from bookstore to bookstore, I can simply ask."
The Employees of United Electronic Controls
The Company: a 59-year-old, $36-million industrial sensor and controls manufacturer based in Watertown, Mass.; winner of the 1990 Shingo Prize for manufacturing
Recommended Reading: The Goal: A Process of Ongoing Improvement by Eliyahu M. Goldratt and Jeff Cox
Why: "Until The Goal, I don't think I had ever read anything about manufacturing, and it flat out contradicted everything we believed." -- Charles Thompson, production manager and a 41-year UE veteran.
"Everybody was talking about it. I found it very interesting. It gives you more insight into what you're doing." -- Joan Sampson, testing department
"It's a novelette, kind of the elegant trash of manufacturing. It's not a good book in the literary sense, but people would read it." -- Bruce Hamilton, manufacturing VP
"You begin to change the names of the characters to the people that you work with. The book changes people's focus. It makes you think about what are the real thought processes of manufacturing. People were saying, 'This is great. You should read it -- but you can't have my copy." -- Bonnie Rafuse, manufacturing education manager
Reading that Helps Us Run the Company: UE started its reading program for a simple reason: money. UE needed to change -- and books are far cheaper than consultants.
The first book was even free. A salesman left a copy of The Goal at UE in late 1985 to help explain some software he was selling. The company never bought the software, but it did buy the book -- and its message.
UE was actively seeking a new message as it struggled with skyrocketing costs. Bruce Hamilton found The Goal -- a message about increasing productivity packaged as a novel -- inspiring. He lent his copy to someone on staff and asked Rafuse to buy a half-dozen more. When those quickly disappeared and Hamilton still had more requests, he and Rafuse realized they were on to something. Eventually, the company bought a copy for every employee and conducted workshops about how The Goal's message applied to UE. More than 100 of the company's 370 employees voluntarily attended.
Those workshops led to other books and other workshops and to an education process that is transforming the company. This year, UE won the Shingo Prize as the U.S. company best practicing the ideas of Shigeo Shingo, the Japanese quality expert who helped design the famous Toyota just-in-time production system. Some of the measurements that helped the company win the prize: between 1987 and 1989 UE reduced inventories by nearly 50%, cut quoted manufacturing lead times from 16 to fewer than 4 weeks, and increased on-time deliveries from 60% to 95%.
Perhaps the most radical change is in the company's openness to employees' ideas. In the first six months of 1990 UE's employees contributed 456 ideas to the suggestions system, says company president David Reis. Before 1986, he notes, the system averaged about one suggestion per year.
In the end, Shingo's ideas have had the biggest influence on UE. A small core group of employees have read his work, and they've spread the ideas throughout the company. Shingo isn't the only writer being read at UE, though. Rafuse has assembled a lending library of nearly 300 volumes. The company has also bought employees their own copies of books they want to keep as a resource. That's expensive, but it's worth the cost, Rafuse says. For example, she has bought at least 10 copies of Shingo's Non-Stock Production, which cost $75 each. One idea implemented from that book saved the company about $75,000.
Other Favorites From The UE Library: The works of Shigeo Shingo, especially A Revolution in Manufacturing and Non-Stock Production
Zero Inventories by Robert W. Hall
World Class Manufacturing by Richard J. Schonberger
Poka-Yoke: Improving Product Quality by Preventing Defects edited by Nikkan Kogya Shimbun Ltd. and Factory
The Art of Innovation tape series by Rosabeth Moss Kanter
My Favorite Book on Motivating
Peak Performers by Charles Garfield
This book really got us focused. Before I read Peak Performers, we had a mission statement that was a page and a half long. Garfield's book pointed out that most peak performers set goals that can be captured in a single statement. After I read that, I distilled our mission into one sentence: to be the first national physicians-supply company.
Everyone now knew what we were shooting for -- 94 stores in five years. That goal would mean opportunity and career advancement for them. And that was motivating. We grew from 12 to 24 company stores the next year, and our sales jumped 54%. -- Patrick Kelly,
CEO, Physician Sales & Services Inc., Jacksonville, Fla.
My Favorite Book on Leadership
The Wisdom of the Sands by Antoine de Saint-Exupéry
This is a rich book. Saint-Exupéry portrays a chieftain of a city trying to keep his tribe from crossing the desert to look for better land. His challenge is to keep them in the city where they already have all they need. Everything Saint-Exupéry's leader does is directed toward keeping his people together, helping them survive. It's a very basic message: we must provide for one another, work with one another, and depend on one another.
At Johnsonville, we want people to be happy, but never satisfied. Saint-Exupéry talks about a man giving up a piece of his life to become something. We want people to see themselves becoming something. People should be continuously learning and striving to make something bigger and better of themselves. We try to make sure that happens. We aren't making just sausage here. I use the business to make great people. I don't use people to make a great business. If everyone is moving forward and working together, then the sausage will take care of itself.