Inc.'s editor recommends three books on business and management for people who usually balk at these topics. Also covered is a pending bill that may increase the failure rate for small companies.
I love books. honest, I do. I just don't like most business and management books. Nevertheless, this being a season for reading, I've come up with some business books (sort of) that I'd recommend even to my mother, although I probably wouldn't suggest she take them to the beach.
Visual Explanations: Images and Quantities, Evidence and Narrative BY EDWARD R. TUFTE (GRAPHICS PRESS, 1997, $45)
It wasn't long ago that Edward Tufte's books were known only to a small, cultlike following in the design community. That's hardly surprising, considering that they bear titles such as The Visual Display of Quantitative Information, Envisioning Information, and Visual Explanations. But recently, the Yale professor's work--in both book and seminar form--has caught on with businesspeople, from investment bankers to engineers running high-tech companies. The reason, I suspect, is technology. The personal computer has made mountains of information available to us all--and left us struggling to evaluate and organize it in meaningful ways (the very definition of modern management, according to Peter Drucker). That's precisely what Tufte writes about--making complex information accessible. If you haven't read his work before, start with Visual Explanations, and don't expect to breeze through it. Tufte is not a quick read. If you spend time with him, however, you'll begin to develop the discipline we'll all need to prosper in the information age.
Thoughts of Chairman Buffett: Thirty Years of Unconventional Wisdom from the Sage of Omaha COMPILED BY SIIMON REYNOLDS (HARPERBUSINESS, 1998, $12)
Usually, I hate books of business aphorisms. Most are stupid little exercises in self-promotion by people who have nothing to say but think no one will notice if they say it short. Thoughts of Chairman Buffett is altogether different. If you never intend to read the masterly but time-consuming Buffett: The Making of an American Capitalist, by Roger Lowenstein, buy this little volume of Buffett quotes and keep it with you at all times. Besides being the world's most successful investor, Buffett is also the master of the one-liner, a Dorothy Parker or Groucho Marx of capitalism. Most of the quotes in this little book relate to investing: "I will tell you the secret of getting rich on Wall Street. You try to be greedy when others are fearful, and you try to be very fearful when others are greedy." Some are just homespun Nebraskan wisdom: "What I want people to say when they pass my casket is, Boy, was he old!" Others seem to have been uttered with an Inc. audience in mind: "Business management can be viewed as a three-act play--the dream, the execution, and the passing of the baton."
The Undertaking: Life Studies from the Dismal Trade BY THOMAS LYNCH (NORTON, 1997, $23)
There aren't many business books that come with endorsements by Jim Harrison and Elmore Leonard, but here's one. It's by Thomas Lynch, who isn't a CEO. He's a director--a funeral director. He makes that perfectly clear in the first paragraph of his book, titled (appropriately enough) The Undertaking: "Every year I bury a couple hundred of my townspeople. Another two or three dozen I take to the crematory to be burned. I sell caskets, burial vaults, and urns for the ashes. I have a sideline in headstones and monuments. I do flowers on commission." You won't find great management lessons here, just prose to die for (so to speak) and an eloquent evocation of small-business life in an old economy in which family, friends, and neighbors weave a rich tapestry of business life that's often absent in our increasingly abstract new economy.
'Knowledge is worthless until it is taught.' --Rosabeth Moss Kanter, author of When Giants Learn to Dance and The Change Masters, making the point that in the future companies will have to be teaching organizations rather than learning organizations
Killing the Patient
A bill pending in the U.S. House of Representatives could, if passed, accelerate the failure rate of small companies. The bill, H.R. 3150, grew out of work done by the National Bankruptcy Review Commission (NBRC), which submitted its report last October. Included was a proposal to revamp the Chapter 11 reorganization process for small businesses.
There are, in fact, problems with the current process. For one thing, it hurts small companies by forcing them to languish in Chapter 11 for months or even years. It also imposes onerous, and expensive, disclosure requirements that further diminish a small company's chance of successfully reorganizing.
H.R. 3150, if enacted, would create a mandatory "fast track" for small companies. The bill's proponents say it will offer a much-needed form of economic triage, speeding up the recovery process for viable businesses and quickly pulling the plug on the rest.
But critics say the new law would simply provide a fast track to the graveyard. Babette A. Ceccotti, one of the two NBRC commissioners who dissented on the small-business recommendation, believes that small companies, forced to meet more stringent filing requirements within a shorter time frame, will not even seek to reorganize. UCLA acting law professor Kenneth Klee calls the bill "mean-spirited." Banks, he contends, were the driving force behind it, and he says it's "designed to help small-business lenders, not small businesses."
Harvard Law School professor Elizabeth Warren, a senior adviser to the NBRC, agrees that the new provisions "strengthen the hand of institutional lenders." She further notes that the bill creates an incentive for struggling small companies to increase their liabilities. How? By changing the definition of small-business debtor from a company with $2 million in unsecured debt to one with $5 million. "This suggests you should run up more debt before you go under," she says. "You'll have a much better shot at reorganizing."
Jeffrey L. Seglin is headed to Harvard's Center for the Study of Values in Public Life to pursue a 1998-99 fellowship on ethics in business, which grew out of his Black and White column. The latest installment is "Would You Lie to Save Your Company?"
Associate editor Joshua Macht spent five weeks doing market research of his own before writing " The New Market Research." In the process, he discovered a whole new set of tools that smart companies are using to find out what customers really want.
Staff writer Christopher Caggiano explored how some companies are using psychological testing to guide almost every facet of their human-resources management, from recruiting to the creation of teams. His report is " Psycho Path."
Staff writer Marc Ballon does a fine job of reporting in " Extreme Managing," but it's a good thing he doesn't have culinary aspirations. Since visiting fast-food franchisee D. L. Rogers, he's talked about nothing but cherry limeade and hand-battered onion rings.