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."
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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."
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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."
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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.
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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.
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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."
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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:
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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.
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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.
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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.
