STRATEGY

What? Me Worry?

Reviews of four new business books -- two on minimizing risks and competing with the big guys, one on how to effect change, and one about setting up a home office. Plus: what Cosmi CEO George Johnson is reading.
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Book Value

Low risk, change, and other stuff we need

  • Low Risk High Reward, by Bob Reiss, with Jeffrey L. Cruikshank (Free Press, 2000)
  • Outsmarting Goliath, by Debra Koontz Traverso (Bloomberg Press, 2000)

The second chapter of Low Risk High Reward alone is worth the price of the book. In it, author and entrepreneur Bob Reiss, who founded a three-time Inc. 500 company called R& R, writes about what he refers to as "numeracy," the numbers equivalent of literacy. Reiss lays out the key numbers that all CEOs should know if they want to have a grasp of their companies' health. He prescribes taking a regular financial snapshot of your company by updating cash-flow statements, doing a cost analysis of your products, and creating break-even analyses both for the company and for each new product. Understanding such numbers, he writes, can minimize the risk that any financial surprise, like a cash shortage, will creep up on you.

The genius of Reiss's book lies in how he makes it abundantly clear that the success of his companies -- including R& R, which produced a successful TV Guide-based trivia game -- has not resulted from any dramatically new, earth-shattering ideas. "Tinkering at the margins is what most businesses are really about," he writes. You take someone else's idea, work it a bit, and make it just a little bit better. By selling a proven idea to a market that you know wants that product, you're effectively minimizing risk.

What makes Reiss's advice stand out is that it's clear he's speaking from his own experience in the trenches. Instead of droning on about the need to write a mission statement, for instance, he suggests that if you don't intend to follow your mission statement, then you shouldn't bother to write one; having no mission statement at all is better than having your employees see you as a hypocrite. He's also refreshingly honest about the fact that he finds the idea of a formal business plan to be "highly overrated." He claims he's never had a written business plan and believes that the only time you really need one is if you're planning to raise money.

Debra Koontz Traverso makes a similar attempt to give simple tips to readers in Outsmarting Goliath. Although her advice is sometimes good, it's more often predictable (get a good mentor) or even downright silly ("Get a credit card with your company name on it, preferably a gold or platinum card"). Outsmarting Goliath is chiefly about posturing -- trying to appear to be something that you're not -- rather than about doing the things you do so well that customers will be beating down your door, regardless of your size. And that's how you really achieve equal footing with the big guys.


A Change Would Do You Good

  • Change the World, by Robert E. Quinn (Jossey-Bass, 2000)

Somewhere toward the midpoint of Change the World: How Ordinary People Can Achieve Extraordinary Results, Robert E. Quinn writes that because of the uncertainty in today's business environment, leaders feel obliged to create a "vision" for their company. "Typically a top management team goes off for three days. They hole up in a room with lots of flip charts and go to work," he writes. When all's said and done, they print the words on small cards and pass them out to the workforce; then the cards are "ignored and things go on as before."

Quinn challenges the reader to care enough to change that. What lies at the heart of his new book is the notion that the only way organizations can hope to change for the better is if the individuals involved in them have the courage to stop acting out of self-interest and instead pursue shared goals for the group.

Quinn, a professor at the University of Michigan Business School, does a nice job of blending in practical examples of what works and what doesn't work in business. He acknowledges that having leaders behave in a way that's truly best for the organization is risky to the individual, and leaders will have to overcome their own fear of failure to take such risks, especially when their behavior falls outside the norm.

Quinn is not arguing for any squishy, New Age type of feel-me-feel-you behavior. In fact, he makes a compelling argument for the place hierarchy has in any business in which you expect decisions to get made. When people complain about hierarchy, he argues, what they're really talking about is a static environment in which nothing gets done. "Hierarchies become frozen bureaucracies due to the failure of human courage," he writes. Demonstrating that courage involves persuading others in your organization with your acts rather than with hollow words spoken out of fear of being deemed out of step. The latter brings creativity and productivity to a halt.

Most of us experience fear or anxiety when we're challenged, writes Quinn. But change agents within organizations "see the need to both challenge and support people, recognizing that only when they feel supported and relatively safe will they take risks." Only in such an environment, argues Quinn, can an ordinary company transform itself into something extraordinary.

Home Is Where the Hard Drive Is

  • Outfitting Your Home Business for Much Less, by Walter Zooi, with Paul and Sarah Edwards (Amacom, 2000)

On any given day in any given bookstore, you'll be able to find at least half a dozen books that want to tell you how to set up your home office. Among those books is a subcategory of titles that tell you how to buy the stuff you need to run your home business.

There's always a market for such books, but the content quickly becomes dated. A decent, although not foolproof, rule of thumb is to grab whichever book is the most recent. With that in mind, you wouldn't go wrong in choosing Walter Zooi's Outfitting Your Home Business for Much Less (in spite of the fact that the title begs the question "Much less than what?").

Still, for my money, the best and most current advice on buying basic stuff for your home office is served up every week by Walt Mossberg in his Personal Technology column for the Wall Street Journal. He's by no means exhaustive about everything you'll have to buy, and the column isn't targeted specifically at the home-business market, but his advice is among the best and most practical available. Plus, since his column appears weekly, the information is current.

Once a year Mossberg writes a column on buying a desktop computer and another on buying a laptop. You can find his most recent columns online at www.ptech.wsj.com/archive.html.


EXECUTIVE READER

GEORGE JOHNSON
Chairman and CEO of Cosmi Corp., a $25-million software publisher based in Rancho Dominguez, Calif.

On his nightstand
Futurize Your Enterprise, by David Siegel. "Siegel thinks that everyone in the manufacturing business will eventually have to convert to a consumer-driven way of doing business, which means a lot of hand-holding and direct contact between manufacturers and the ultimate customer," Johnson says. "I don't disagree with the analysis; I just don't see it happening in the next 10 years, as he predicts. I'm 67, and I've seen aggressive forecasts come and go. If what he predicts happens when he thinks it's going to happen, it would be a miracle."

Escapist fare
Sahara, by Clive Cussler. "Right now I'm really into Cussler, who has about 18 adventure books, all of which feature a character named Dirk Pitt. What I like about his stuff is that you know the characters will escape in the climactic scene. In my company I know that, like Cussler's characters, we'll survive long enough for the next story to come out," Johnson says. --Mike Hofman


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Last updated: May 1, 2000




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