Book Value

Creating wealth and giving it away

  • Future Wealth, by Stan Davis and Christopher Meyer (Harvard Business School Press, 2000)
  • Robin Hood Was Right, by Chuck Collins, Pam Rogers, and Joan P. Garner (Norton, 2000)

Authors Stan Davis and Christopher Meyer predict that in the years to come, everything, including human talent, will be traded in efficient capital markets. Their notion is that at a time when "money is everywhere, and brains are scarce," the market will soon start pricing people, just as it now prices businesses and commodities.

Driving that change, the authors suggest in Future Wealth, is the fact that the "control of wealth is tilting from institutions to individuals," who now manage their own retirement plans and thus take more responsibility for their future than people did in our corporate-culture past. The result is that "middle-class wealth is no longer an oxymoron," which means that people now "see their work lives not as jobs, but as a series of risk management choices."

Read this and you might get a nagging thought: what happens when the bull market ends? The authors do address that obvious concern -- in one sentence: "Of course, the bull market's end will affect these attitudes -- at least temporarily."

Such facile conclusions and the tendency to hitch big ideas to ephemeral events may weaken the book, but Davis and Meyer still offer a compelling prognostication for any fan of free markets. And to be fair, the book is designed to be the opening salvo in an ongoing dialogue with readers. Yet it would have been fascinating if the authors had taken the argument a step further.

They declare, for example, that the super-rich are irrelevant. Well, fine, they can probably fend for themselves. What about the super-poor? "The disparity between the top and the bottom 10% may distract you from the 80% in the middle," they write. Yeah, abject poverty can be distracting.

But Davis and Meyer never claim to be on a mission to alleviate poverty. Leave that to Chuck Collins, Pam Rogers, and Joan Garner, authors of Robin Hood Was Right: A Guide to Giving Your Money for Social Change. The authors acknowledge that "uncertainty about the impact of your gifts" can be a stumbling point for prospective philanthropists. But unfortunately, they provide precious little advice on evaluating the interesting foundations they profile.

The most useful information about choosing charities is in Appendix H, which informs readers that nonprofits with budgets of $250,000 or more must undergo annual audits that are available to the public. There's also a one-page guide to reading a nonprofit's budget. In a world where we're embracing risk at every turn -- even when we're simply trying to help others -- we could use more of this practical, sensible type of information.

Vive la DiffÉrence

  • Differentiate or Die, by Jack Trout with Steve Rivkin (John Wiley & Sons, 2000)
  • Failing Forward, by John C. Maxwell (Thomas Nelson, 2000)

Jack Trout, coauthor of the book Positioning and Marketing Warfare, dedicates his latest work, Differentiate or Die, to the legendary adman Rosser Reeves. In 1961 Reeves published Reality in Advertising, in which he coined the term unique selling proposition. Trout's thesis is basically Reeves's, only made current.

Even though the world it covers has changed so much since the '60s, there are few surprises in Trout's book. Instead, there are short chapters telling us what are differentiating factors (being first, leadership, market specialty, among others) and what aren't (creativity, price, quality, among others).

Far more interesting is Trout's observation that fast growth can destroy differentiation because it can distract a company from concentrating on what's really important. He uses some examples to make his point. (One is the way in which ESPN rolled out ESPN2 and ESPN Classic.) But there's no convincing argument that growth and differentiation can't work together. More to the point would have been the observation that during periods of growth, everything can be difficult.

If your business is going through such a rocky patch, you may want to turn to John C. Maxwell's Failing Forward: How to Make the Most of Your Mistakes. You might expect a former pastor and founder of INJOY (a provider of support services to religious organizations, based in Norcross, Ga.) to give us a book that was high on superlatives and low on hands-on advice. But that's not the case.

Maxwell obviously never met a failure he couldn't learn from. He gives us 15 steps to making the most out of failing -- what he calls "failing forward" -- and most are pretty sound. Among them: find the benefit in every bad experience; work on the weaknesses that weaken you; change your response to failure by accepting responsibility.

Maxwell uses examples of successful people who had previously suffered glorious failures. (Who knew that John James Audubon lost a small fortune in the indigo-dye trade before becoming one of the great nature illustrators?) His observations, while not overly analytical or theoretical, are refreshingly grounded in reality. The tone may strike some as a tad too upbeat, but Maxwell delivers something real about making sure failure doesn't get you down.

Business-Plan Smarts

  • Anatomy of a Business Plan, 4th edition, by Linda Pinson and Jerry Jinnett (Dearborn, 1999)

The first edition of Linda Pinson and Jerry Jinnett's Anatomy of a Business Plan: A Step-by-Step Guide to Starting Smart, Building the Business, and Securing Your Company's Future appeared in 1989. It's still one of the best books on the basics of putting together a thoughtful, thorough, and professional business plan for a young company. The fourth edition of the book does nothing to tarnish that reputation.

In a no-frills approach, most chapters cover one particular section of the business plan (for example, executive summary, organizational plan, marketing plan, financial documents, and supporting documents). The descriptions of what any budding business owner should include are detailed and written in clear English. There's also good information about taxes, how best to package the business plan, and the importance of keeping a plan up-to-date.

In the appendices, the authors provide two in-depth examples of business plans that were written following their recommended format, along with blank forms and work sheets. The book also contains a short glossary of terms (most of which are explained well enough in the text itself) and a useful index that serves as a good companion to the comprehensive table of contents. For readers who are new to starting a business or writing a business plan, this is a good resource.


Syndicated columnist and best-selling author of Taxes for Dummies, Personal Finance for Dummies, and Investing for Dummies (IDG Books)

How to Talk So Kids Will Listen and Listen So Kids Will Talk, by Adele Faber and Elaine Mazlish. "Listening is a vastly underrated skill. It's enormously applicable, even with adults," says Tyson.

Built to Last: Successful Habits of Visionary Companies, by James C. Collins. "Collins is the Drucker of the new century."

A Random Walk Down Wall Street, by Burton G. Malkiel. "A classic. In the early 1970s, Malkiel was among the first to point out the wisdom of indexing and keeping expenses low. His book also highlights symptoms of investment bubbles."

The Ten Commandments: The Significance of God's Laws in Everyday Life, by Dr. Laura Schlessinger. "This should be required reading for anyone who wants to be a better role model and leader, whether you're religious or not." --Mike Hofman

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Published on: Apr 1, 2000