The Smart CEO's Reading List
LEARNING HOW TO LEAD
Corporate Lifecycles: How and Why Corporations Grow and Die and What to Do About It, by Ichak Adizes (Prentice-Hall, 1988)
Company founders rave about the relieved recognition they feel when reading this book -- which outlines the fits and starts and patterns autocratically run companies typically experience while growing, and how to get past them. "It described everything we went through in frightening detail," says John Katzman of The Princeton Review, a test-preparation service based in New York City. "It was my business, in print."
Katzman actually had an unopened copy of the book for almost two years before he saw author and consultant Adizes (interviewed in Inc. in January 1991, [Article link]) at a seminar. He devoured the book when he returned, had his managers read it, and even brought in the Adizes Institute to run a session. "It was a nasty thing; I sat there and heard what was wrong with the company for three days." He says the book changed his business; the company is trying to practice Adizes's theories about broadening and improving the way decisions are made and implemented. "We're moving from a monarchy to, if not quite a democratic system, then a constitutional monarchy."* * *
The Executive Odyssey, by Frederick G. Harmon (John Wiley & Sons, 1989)
A look at the tension springing from the inevitable gap between a leader's capabilities and what's required of him or her, and a prescription for evaluating skills and moving forward. Although the language tends toward new-age cant ("channeling energy," finding "hidden power") some CEOs rank it as the best professional development book out there.
The Greatest Thing in the World, by Henry Drummund (Whitaker House, 1981)
The favorite book of Donald Burr, founder of People Express Airlines. "It's a short book that I still carry around. Drummund was a 19th-century Scottish clergyman, and this is a sermon he gave about Corinthians and how the greatest thing in the world is love. I don't think of it as religious; it's a beautiful piece of prose, and to me the best management book I've ever read. Not that you can read it and know how to run a company. But leadership requires care, compassion, and skill -- and this book speaks to all three quite powerfully," says Burr.* * *
On Becoming a Leader, by Warren Bennis (Addison-Wesley, 1989)
Bennis has written a number of books on leadership, but this synthesis of interviews with notables from Betty Friedan to John Sculley is a favorite. "Especially good," says Jimmy Calano of CareerTrack, a professional training company in Boulder, Colo., "is the last chapter, 'Forging the Future.' It tells how to shift from being a manager to being a leader; it's a synthesis of the book. I think you can learn vicariously, which is why I like to see how high-profile people work."
Also recommended: Bennis's Leaders, written with Burt Nanus (Harper & Row, 1985), which looks at artistic, political, and corporate leaders and finds a common trait in their ability to retain original and compellingly articulated points of view.* * *
The Art of War, by Sun Tzu, translated by Thomas Cleary (Shambhala Publications, 1988)
This volume of ancient Chinese wisdom on waging war (example: the battle is won long before the enemy is even engaged) is consistently rated higher than most modern leadership books. "I think it's 50 times better than all of them," says Tom Golisano of Paychex, a payroll-processing company based in Rochester, N.Y. Business as a battleground may be overworked territory (remember Wess Roberts's Leadership Secrets of Attila the Hun?), but Sun Tzu's treatise still gets cited regularly and enthusiastically.* * *
The One-Minute Manager, by Kenneth Blanchard and Spencer Johnson (Morrow, 1982)
The best-seller admonishing managers to define tasks, measure results, praise regularly, and criticize concisely gets high praise both from executives who hardly ever read and from those who read everything. Some complain the book is too light; others commend its direct and simple style.
COMPETING IN THE MARKETPLACE
Changing the Game: The New Way to Sell, by Larry Wilson and Hersch Wilson (Simon & Schuster, 1987)
"I've read 50 books about selling, and this one is the best," says Robert Sloss of Connor Formed Metal Products, based in San Francisco. Half popular, half academic, "it speaks to how to change the way you're perceived in the market. We're in a hard-to-distinguish-us-from-the-rest business -- metal fabrication -- and this book got everybody thinking about how we needed to change from selling product to selling service. It pulled everybody together; if people had trouble understanding me, they could understand the book." Salespeople now pass information about accounts to people in customer service and on the shop floor, heightening awareness of customer needs. Chapters 1 through 6, describing types of customers and how to successfully serve them, are required reading for Connor employees.* * *
Building a Chain of Customers, by Richard J. Schonberger (Free Press, 1990)
Outlining the relationship between suppliers and vendors, the book describes how everyone in an organization can be part of customer service, by redefining who, in fact, customers are. Don Emery's Reference Software International, in San Francisco, has adopted as "theme of the year" the idea of viewing everyone the company deals with as part of the customer chain. "I don't think anyone finished the book," Emery admits, "but if you just read chapters 1 through 3, it will inspire ideas. It's made us think about how we communicate internally and how we need to consider even one another as customers."* * *
Getting to Yes, by Roger Fisher and William L. Ury (Houghton Mifflin, 1981)
Fisher is a Harvard law professor, Ury a lecturer on negotiation. Their collaboration is excellent for executives who find themselves dealing with lots of constituencies -- bankers, vendors, and so on -- says Cecil Ursprung of Reflexite, a manufacturer in New Britain, Conn. "I've tried about everything in the popular press and on tape about negotiation, and this is the best. It talks about how the best deals are when we all win. Not much on tactics, but great on the process."* * *
Positioning: The Battle for Your Mind; Marketing Warfare; and Bottom-Up Marketing; by Al Ries and Jack Trout (McGraw-Hill; 1981, 1985, and 1988)
Al Ries and Jack Trout have written several extremely popular books about marketing that are widely regarded as classics in the field. Their first, Positioning: The Battle for Your Mind, defines positioning and how it's a place you reach, not something you do. Marketing Warfare likens the marketplace to -- you guessed it -- a battlefield, and claims companies are in defensive, attacking, flanking, or guerrilla modes. And Bottom-Up Marketing argues that while most people devise a grand strategy and delegate tactics to execute it, smarter ones find tactics that work and derive strategies from them.* * *
Marketing Management, by Philip Kotler (Prentice-Hall, 1988)
A textbook on the elements of marketing and how to incorporate them into strategic planning. Reference Software International's Emery, who also teaches marketing at San Francisco State University, says it's the best of the 50 books on the topic he's read.
WHAT KIND OF COMPANY SHOULD THIS BE, ANYWAY?
The Goal, by Eliyahu M. Goldratt and Jeff Cox (North River Press, 1986)
A breezy, easy-to-read novel, The Goal is one of those books that whole companies read and seem to end up transformed by. It tells the story of a manufacturing plant where inventories are out of control and families are falling apart; a Boy Scout troop learns to find and break down the bottlenecks in its system that are inflicted by Herbie, a slow walker and a metaphor for points where problems occur. "Our company ended up going on 'Herbie hunts' after reading the book," says David Armstrong of Armstrong International, in Three Rivers, Mich. "We look to find the problems that cause excess inventory, in order to improve on our speedy delivery time."* * *
The Breakthrough Strategy, by Robert H. Schaffer (Ballinger, 1988)
The theme here is the need to define breakthroughs -- incremental goals that can be met in short periods of time -- to get companies to use more than the 40% to 60% of their potential they're likely using now. "The whole message is in the first 75 pages," says one chief executive. "It's an important book, though, because it can expand your idea of what is possible and what you can be."* * *
Deming Management at Work, by Mary Walton (Putnam Publishing, 1991)
W. Edwards Deming's theories on quality and management in Japanese and U.S. companies are well regarded; unfortunately, most executives say Deming's own writing is too turgid and dense to wade through. Mary Walton's book is a middle ground: a 14-page summary of Deming's doctrine, coupled with case histories of six companies that use his revolutionary techniques. Provocative for service as well as manufacturing companies.
Innovation and Entrepreneurship, by Peter F. Drucker (Harper & Row, 1985)
It's hard to pick one Drucker book from the 20-plus he's written; Drucker is considered by many to be among the most brilliant thinkers about management, and it seems as if most company founders have their own favorite Drucker book. This one, using catchphrases such as "hit them where they ain't" and "fustest with the mostest," focuses on innovation and how it differentiates entrepreneurs from small-business owners. Another oft-recommended Drucker work: Management: Tasks, Responsibilities, Practices (Harper & Row, 1974).* * *
The Strategist CEO, by Michel Robert (Greenwood, 1988)
Is your company product-driven or customer-driven? Your answer, Robert believes, should determine how you make strategies and allocate resources. Sue Marks of ProStaff, a Milwaukee-based temp agency, credits this book with helping her and her managers recommit to putting temp training ahead of searching for new business. "We already knew these things were important to us," she says, "but the book put it in a strategic-planning context." Her key chapters: 6, 11, 12, and 14.
KEEPING UP WITH THE WORLD OUTSIDE
The Machine That Changed the World, by James P. Womack, Daniel T. Jones, and Daniel Roos (Rawson Associates, 1990)
"Lean production" -- how the Japanese have it, how Americans need it, and how it affects everything from dealing with customers to coordinating supplies -- is the concept explored in this summary of a five-year study on the auto industry by the Massachusetts Institute of Technology. Scott Cook of Intuit, a Menlo Park, Calif., software developer, says the book has inspired him to implement some of its prescriptions -- for how people are trained to the way they report to one another. Of all the books he's read about Japanese techniques, says Cook, "If I had to recommend one to start with, this would be it. MIT researchers? I thought it would be dry as dust. But it's clear and well written. The introductory summary and next chapter on production are marvelous in themselves."* * *
The Age of Unreason, by Charles Handy (Harvard Business School Press, 1989)
Handy forecasts a new organizational paradigm that some say is already here: companies that have scaled down to their business cores, subcontracting out nonessential operations. What CEOs like is his thinking about how the work force will change. "Some workers are going to want a great deal more flexibility about how they run their lives," says Bill Krause of 3Com, a computer networking company in Santa Clara, Calif. "The book is really thought-provoking about how you might structure your company to take advantage of that."* * *
The Borderless World, by Kenichi Ohmae (Harper Business, 1990)
The suggested volume on going global. "It's a quick book," says Paul Nelson of YSI, a scientific instrument manufacturer in Yellow Springs, Ohio, "and it helped to stimulate our own thinking."* * *
The Reckoning, by David Halberstam (William Morrow, 1986)
It's hard to recommend 640 pages on anything, but this is a classic -- a good read on the shifting fortunes of Ford and Nissan, and what they reveal about business in the United States and Japan. Recommended over Halberstam's new book, The Next Century (William Morrow, 1991), which gets mixed reviews for its take on the rising economic prominence of Japan and Germany.* *
The Second Industrial Divide , by Michael J. Piore and Charles F. Sabel (Basic Books, 1984)
A macroeconomic book outlining the transformation of manufacturing: how we've moved from the age of mass production into an age of specialized manufacturing, which rewards flexibility and savvy use of technology over size. For an overview, see Inc.'s interview with the authors, in the September 1985 issue.* * *
The March of Folly, by Barbara W. Tuchman (Knopf, 1984)
"Maybe my favorite book of all time," says Joline Godfrey of Zeb Gardenia, a learning-game design company in Ojai, Calif. "It has six historical examples, from the Trojan Horse to Vietnam, that show how we insist on doing things that are in our own worst interest. Not a business book per se, but it shows how leaders who say, 'I didn't know, I didn't have enough information,' really may just not be paying attention to what's right in front of them."* * *
Barbarians at the Gate: The Fall of RJR Nabisco, by Bryan Burrough and John Helyar (Harper & Row, 1990)
Nobody claims this tale from the LBO underworld will help you run your company better, but no other book has received such wide mention. Or such unqualified raves. Gossipy, soap operalike, Kitty Kelleyesque in its skewering of page-one celebrities.
MONEY: THE LOWDOWN
Most executives don't refer to books -- textbooks or others -- for internal cash management. But those who do have some favorites:* * *
What Every Manager Should Know About Financial Analysis, by Alan S. Donnahoe (Simon & Schuster, 1989)
This is for the CEO who's not a CFO. Math for nonmathematicians, according to John Mackey of Whole Foods Market, a retailer and distributor in Austin.* * *
Techniques of Financial Analysis, by Erich A. Helfert (Dow Jones-Irwin, 1986)
Several CEOs cited this as a good refresher for all that econ they've forgotten since college. And Patrick Sansonetti, formerly of Prime Computer and now at Advent International, a venture capital group, uses it as "a reference book for tearing into the financial aspects of a company. It's good for valuing a business." A practical guide to reports, projections, implications of financing options, cost accounting, and cost controls.* * *
Cash Flow Problem Solver, by Bryan E. Milling (Chilton, 1984)
Out of print, but still available from the publisher's stock, this book helps with the basic calculations needed to understand your company's cash flow. It covers concepts such as inventory turns and how to monitor average days outstanding. A good first book for someone who's still on manual systems and finds the numbers side a bit intimidating.