Company Lore

Reviews of six new business books. Includes tall tales about the launch of Home Depot and IKEA; ways to motivate your hottest employees; and the inspirational story of a banker to the poor.

By Jeffrey L. Seglin | 
 

Book Value

Tall tales from big companies

Ah, sweet merchandising. Built From Scratch: How a Couple of Regular Guys Grew the Home Depot from Nothing to $30 Billion is the story of the founders of the Home Depot, by the founders of the Home Depot: Bernie Marcus and Arthur Blank. It's filled with familiar, even legendary, tales: how the company was founded after Daylin Corp. CEO Sandy Sigoloff, better known as "Ming the Merciless," fired Marcus and Blank from the Handy Dan Home Improvement Centers; and how Ross Perot passed on an opportunity to invest $2 million for a 70% stake in the Home Depot, which would be worth approximately $58 billion today.

Books of this ilk--tales of huge companies with humble origins--seem to share some telling qualities, at least as far as Built from Scratch and Leading by Design: The IKEA Story go. One is that the book has to include your core values. (The Home Depot's are listed up front; IKEA's are at the end.) Another is that your humble origins must be really humble. So the IKEA story traces its entrepreneurial roots to founder Ingvar Kamprad's boyhood, when he sold belts, wallets, watches, and pens out of a brown cardboard box. Oddly, though, a lot is made of Kamprad's youthful attraction to "the Nazi myths and movements of the 1930s." We're also told that in person, Kamprad "reminds you of some venerable African freedom fighter, who with a mixture of humility in the face of the responsibility but with the obvious pride of leadership confronts his people after the liberation." Seems a bit much.

There was an opportunity missed in Leading by Design. It's too much about Kamprad and too little about the business. A better book would have brought the same creativity to the IKEA story that the company brings to its stores.

On the other hand, Cannondale: Handmade in USA does a wonderful job of capturing the feel of the bicycle company. It's the strongest management book of the lot even though its authors aren't traditional management writers and it's published by VeloPress, which specializes in books on biking.

The book also covers the entrepreneurial-roots stuff. We learn that company founder Joe Montgomery's stormy relationship with his father--himself a successful entrepreneur--led him to feel he had something to prove. We learn that Joe stank as an investment banker, that he succeeded as a partner in a New York City restaurant, and that it was the proceeds from selling his share that helped him finance the launch of Cannondale.

But what's really terrific about this book is that you get a sense of the company's passion for its product. The writers don't shy away from talking about design in highly technical terms--the things you learn about tube stiffness!--but for the most part, we're treated to how Cannondale pursued the goal of making the best bicycles in the world. It wasn't always easy. The company seemed to stagger along until it went public, on November 15, 1994. Unlike the executives of a lot of companies, Cannondale's management embraced the new accountability brought on by going public. "We had to mature to a higher level," says Scott Montgomery, Joe's son and a Cannondale executive, "or we would be high-profile, embarrassing washouts."


Show me the money

Ok, here's the deal: hot groups is the new buzz term for bands of people who love their work so much, they never want to leave it. Through anecdotal research, Lipman-Blumen and Leavitt have distilled what makes a hot group hot. If you want hot groups in your company, they say, loosen controls, organize less, check work less frequently, and forget performance evaluations, since they emphasize the individual over the team.

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