Category: Book Reviews

Why many businesses are headed in the wrong direction

Most businesses spend their time and efforts trying to find out what it is that customers want, and then supply those wants. However, such customer-focused businesses are heading in the wrong direction, according to Michael Schrage in his book Who Do You Want Your Customers to Become? Instead, as the title of the book suggests, they should be focusing on the question of what they want their customers to become. Innovation necessarily transforms customers into something else.

Under Steve Jobs, Apple had no time for consumer research, saying that it was not the consumer’s job to know what they want. Google’s search system was developed before the ultimate users knew that they needed it. Ryanair succeeds by cutting costs to provide low-cost air travel, regardless of what customers think. Real innovators are too busy inventing the future to listen to customers. They know what innovation their customers need even before customers know they need it.

The book prescribes six key insights:

  • Innovation is an investment in the capabilities and competencies of your customers
  • Innovation is about designing customers
  • Customer vision is as important as corporate vision
  • Customer vision should be aligned with user experience
  • Be your own best beta-tester
  • Anticipate and manage the dark side of innovations

The author’s perspective on innovation and customer focus is an interesting one which undoubtedly will be of use to some businesses, but will it become one of those classic ideas which revolutionises business thinking? Only time will tell. In the meantime, those who are prepared to invest a few dollars and a couple of hours in reading this short book will benefit by having their views of customer-centricity challenged.

How to turn losers into winners

Leading a losing team to success is difficult, and there will be setbacks, but there is no end to the success you can achieve if you push your team to grow, challenge itself, and be better while keeping its focus on what is possible in spite of what is actually happening, according to Joe Frontiera and Daniel Leidl in their book Team Turnarounds: A Playbook for Transforming Underperforming Teams.

After initially researching professional sports teams which underwent significant turnarounds, the authors expanded their investigations to include businesses. From their research they identified six typical steps in a team’s transition from losing to winning:

  • Stage 1: Leading past losing, which involves making an honest evaluation of the team’s current underperformance
  • Stage 2: Committing to growth, which involves creating a vision for the future and the values, plans and goals that will guide the group forwards
  • Stage 3: Changing behaviours, which involves introducing and reinforcing new behaviours and best practices
  • Stage 4: Embracing adversity, which involves growing stronger by meeting roadblocks head-on and overcoming them
  • Stage 5: Achieving success, which involves recalibrating and moving on once initial goals have been reached
  • Stage 6: Nurturing a culture of excellence, which involves sustaining the team’s progress with continual learning, innovation, and maintenance of the team culture

While this six-stage model may not fit every turnaround, it does in my opinion provide helpful guidance for those who find themselves in leadership positions at companies which are languishing on the losing side of the ledger. The book includes numerous interesting and inspiring stories of companies and sporting teams which have undergone successful turnarounds, and the last part of the book provides a Team Turnaround Workbook in which detailed advice is given about what needs to happen in order to progress from one stage to the next.

How to communicate in a compelling manner

By shifting gears away from the now-dysfunctional approaches of the past, marketers have the chance to reshape the media marketplace, orienting it to stories that have always worked in the oral tradition—those that call people to higher purpose—according to Jonah Sachs in his book Winning the Story Wars: Why Those Who Tell (and Live) the Best Stories Will Rule the Future. We now live in an age of “story wars”, in which the ability to dream up and spread solutions to the world’s problems depends on the ability to tell great stories that inspire people to think differently.

The era dominated by print and traditional television media is in decline and being replaced by the “Digitoral” era, featuring a “digital” culture that has revived key elements of “oral” traditions. A successful marketing message is now a compelling story which gets passed from listener to listener. But there are five deadly sins which must be avoided: vanity, authority (relying on the facts without making an emotional connection with the audience), insincerity, puffery and gimmickry.

A good story uses elements from the shared myths that hold societies together, including: symbolic thinking; story, explanation and meaning; and ritual. Effective marketers are those who create new myths, and these can be used for good or for bad. Inadequacy marketing, which involves creating anxiety and the introducing a magic solution, tends to be harmful, whereas empowerment marketing tends to be beneficial.

The book includes a number of Basic Training segments, which provide the reader with detailed ideas on how to find values for a brand, how to define your core story elements, and how to generate your stories. Although the book is directed particularly to marketing professionals, it contains guidance which will be helpful for anyone who wants to communicate a message in a compelling manner. As a reader who is not a professional marketer I was not completely comfortable with all of the author’s approach and advice, but I found the book as a whole to be well-written and helpful.

How to negotiate with powerful people

There are a number of different strategies which can be used to get powerful people to cooperate in terms of getting information, formal or informal approval to act, resources, introductions and support, according to Allan Cohen and David Bradford in their book Influencing Up. Even when a power gap seems intimidating or you have a negative relationship with a more powerful person, there are still things you can do to increase your chances of success.

The typical steps involved in influencing powerful people include:

  • Clarifying what you need and what your priorities are
  • Beginning with an assumption that the person you intend to approach is a potential partner rather than an adversary
  • Attempt to understand the person’s own priorities and what it is that they value (their “currencies”)
  • Determine what you can offer that the person will value, in exchange for giving you what you are seeking
  • Find out how to gain access to the person
  • Negotiate a win-win exchange

Part II of the book provides a more detailed discussion of how to build a partnership relationship with your boss, in which you focus on helping your boss succeed in exchange for him or her providing the resources that you need. Part II discusses ways of influencing powerful people in general, including identifying what the powerful care about and how to gain access to them. Various stories of people who have succeeded in influencing powerful people help to illustrate the principles.

Many people feel uncomfortable with the idea of dealing with power and exercising influence, and would prefer to simply let their work speak for itself. The authors provide a convincing demonstration of why such an approach is inadequate, and they provide a very helpful range of ideas for negotiating even in toxic situations. Anyone who has ever experienced frustrations with management or difficulties in seeking resources from a powerful person will find the book very enlightening.

Good advice for handling common employee problems

Successful companies of all sizes actively and passionately show members of their workforce that the company truly appreciates and values their efforts, according to Noelle Nelson in her book Make More Money by Making Your Employees Happy. Many employers automatically assume that “appreciation” equals “more money”, but money is not what keeps an employee enthusiastic and motivated to do a good job.

Some of the key ingredients in a highly motivated workforce include:

  • Employees are given clear direction, so they know what is expected of them
  • Adequate tools and training are provided and sufficient time is allowed for accomplishing assigned tasks
  • When problems arise, efforts are focused on fixing them, not on assigning blame
  • Employees are given regular, frequent, targeted feedback
  • Employees are frequently acknowledged for doing things well
  • Management exhibits a positive attitude and leads by example
  • Work is not taken too seriously all the time
  • High performing employees are not punished by being overloaded
  • Employees have plenty of opportunities for learning and growth

One of the most difficult times to keep employee morale high is when an organisation is undergoing significant change. The book includes an interesting discussion of ways in which employees can be kept happy during the change process. There is also a useful chapter on poor performance, the issues which give rise to it, and ways in which poor performers can be transformed into productive employees.

I was initially sceptical about how much useful content there would be in a book which promised “Make More Money” in its title, and as I started reading the concepts being conveyed seemed fairly basic, but then it occurred to me that simple solutions are what is needed to address the actual problems encountered in many workplaces. The book is quite short, making it ideal for busy managers who need some advice on the best ways to handle common employee problems.

How to overcome strategic inertia, structural inertia and human inertia

When firms face profit pressures in the marketplace, most do not recognise it as a strategic problem; instead their first instinct is to try harder, attempting to do the wrong thing more efficiently, according to John Wells in his book Strategic IQ: Creating Smarter Corporations. In order to succeed in a changing world, firms need to overcome strategic inertia, structural inertia and human inertia to steer themselves into attractive places in the competitive environment.

The book is divided into three parts which discuss smart strategy, smart structure and smart minds. Much of what the author has to say about smart strategy will be familiar to those who have read other books on strategy. A distinction is drawn between firms with low strategic intelligence (those who are blind, in denial or incompetent), firms with moderate strategic intelligence (those that define and make strategic choices), and firms with high strategic intelligence (those with a mindset of change, continually finding new ways to succeed).

The book contains some interesting ideas about smart structure. Most organisations have a fairly rigid structure, leaving them vulnerable to competitive attack. The author advocates object-oriented organisational structures, with the organisation being made up of numerous strategic business components which can be easily rearranged, in a manner similar to agile object oriented computer programming.

There is an interesting discussion of the operation of social mechanics within an organisation. People naturally form social units, and organisations can make sure the conditions exist to encourage trust, reciprocity and altruism within work groups. Social networking technologies can be harnessed to help the social mechanics.

This book is a bit longer than many other business books and contains some repetition. Numerous companies are mentioned, but I would have preferred more detailed stories to make the text more engaging and paint a more vivid picture of how the espoused principles are put into practice. Nevertheless, the book contains a lot of insightful material, and it is well worth the time spent in reading it.

Finding satisfaction in your work

There are no quick fixes for the fundamental problems of life, but there are tools which can help you make good choices appropriate to the circumstances of your life, according to Clayton Christensen in his book How Will You Measure Your Life?: Finding Fulfilment Using Lessons From Some of the World’s Greatest Businesses. The book takes the interesting approach of applying a range of business principles to personal life decisions.

In broad terms, the book tackles the issues of finding happiness in your career, finding happiness in your relationships, and staying out of jail. Interesting observations include:

  • Finding yourself stuck in an unhappy career is often the result of misunderstanding what motivates you
  • Financial compensation is a hygiene factor, not a motivator; people are motivated by challenging work, recognition, responsibility and personal growth.
  • Success required the balancing of careful planning with taking advantage of unanticipated opportunities.
  • Your strategy will not be effective unless you allocate your resources – including your time, money and energy – in alignment with that strategy.
  • If you do not invest adequately in relationships with your family and close friends when they seem to be going well, you may lose the opportunity.
  • The path to happiness in a relationship is about finding someone who you want to make happy.
  • Bombarding your children with resources and experiences may actually prevent them from developing the skills needed to solve hard problems.
  • To succeed in life, children need to experience situations such as difficult teachers, failing at a sport, and dealing with cliques.
  • Like organisations, families have cultures which can have positive or negative effects on how children behave.
  • Major integrity failures usually start as a series of small seemingly innocuous decisions.

The book deals with a subject which is unusual for a business book, but it does so in a very helpful way. In the pressures of daily business it is far easier to devote your time and energy resources to things which seem to bring a readily measurable reward, such as increased profits; however this often results in failure to invest in the things which bring true happiness in life. I found the book both engaging and convicting, and I highly recommend it.

Challenges of a resource-scarce future

Over the next several decades the world will almost certainly face global tensions arising from greater resource scarcity, according to Dambisa Moyo in her book Winner Take All: China’s Race for Resources and What It Means for the World. China is the only one of the world’s great powers to focus its economic and political strategy on anticipating the considerable challenges presented by a resource-scarce future.

The book describes a range of limited resources, including arable land, water, minerals and oil, and examines the future implications for China and for the rest of the world. China is both the leading buyer of the world’s resources and the main trading partner of many countries, giving it enormous economic power. Particularly in Africa, China is a significant funder of governments and infrastructure projects.

In view of the controversial nature of the author’s previous books Dead Aid and How the West Was Lost, and in particular her suggestion that the US should default on its loans from China, readers may be surprised to discover that she does not take an anti-Chinese approach in this book. While some regard China’s resources rush in Africa as neo-colonialist, the author says that, for the moment, China would seem to be one of the forces actively working to improve Africa and the prospects of its people. She points out that China is almost universally viewed by Africans as having a more beneficial impact on African countries than does the United States.

The book’s message is that the rest of the world needs to wake up to the coming resources scarcity and take appropriate action. The urgency of that message depends on how imminent the reader thinks the scarcity is. The book suggests a Malthusian viewpoint in which escalating population and depletion of resources leads to catastrophes.

As is the case with her other books, the author describes complex economic concepts in easy-to-understand language that does not assume any prior knowledge. The book is both thought-provoking and instructive, even for readers who do not agree with the scarcity scenarios.

Putting your customers in charge of your marketing

Businesses which focus all their efforts on improving customer relationships in order to induce them to buy more stuff are missing out on the most valuable part of the customer relationship, according to Bill Lee in his book The Hidden Wealth of Customers: Realizing the Untapped Value of Your Most Important Asset. Instead, they should be focusing on a new type of value proposition, which involves transforming customers into advocates, influencers and contributors.

So, how does this work, and why would customers be interested in becoming unpaid sales representatives for your business? The reality is that your customers will typically: understand more about their needs than you do; have more credibility with other potential customers than you do, when speaking about your business; and would prefer to associate with their peers (your other customers) than with you. Thus you can provide more value to your customers if you can find ways of letting them design the products and services that you provide to them, and if you can create forums for them to interact with other customers. In return, you can coach them to become advocates and influencers.

To illustrate this new type of value proposition the author gives a number of examples, including:

  •, which relied on customers to help develop its software, brand, market, sell, and continue to improve it.
  • Eloqua, the marketing intelligence and demand generation firm, which markets itself by showcasing the knowledge and experience of its customers at its annual Markie Awards.
  • Hitachi Data Systems, which developed a theme-based communications strategy emphasizing customer stories.
  • Microsoft, which developed its Most Valuable Professional program to create and reward top influencers and technology-community leaders.
  • Intel, whose social media programs across a variety of media and sites integrated customer and expert content.
  • National Instruments, which raised the profile of its LabVIEW software by building a community around a robotics competition.

Although the use of social media features heavily, this is not a book about social media. Social media is merely one of the tools which can be used to enhance the new type of customer value proposition. Does the author’s approach to marketing work for everyone? I am not sure. Some customers are going to be better advocates, influencers and contributors than others. Some fields of business may be too complex for customers to be able to make a significant contribution. But nearly everyone who runs a business will get some benefit from considering the author’s ideas.

A fascinating overview of the thinking process

Most people have a limited understanding of the ideas that shape the way we think, according to Denise Cummins in her book Good Thinking: Seven Powerful Ideas that Influence the Way We Think. Lawyers understand argumentation, stockbrokers understand decision theories that drive equity markets, psychologists understand how the brain is wired, and scientists understand scientific investigation, but very few people have an understanding of all of these fields.

The seven ideas which the book discusses are:

  • Rational choice, which means making decisions aimed at producing the most desired outcome.
  • Game theory, which involves making decisions which are affected by the simultaneous decisions of other people.
  • Moral judgment, which includes identifying what is right and what is wrong.
  • Scientific reasoning, which includes the use of reason to determine causality, and also the construction and testing of hypotheses.
  • Logic, which involves discerning truth from a series of propositions.
  • Problem solving, which means searching for solutions which produce a desired result.
  • Analogical reasoning, which is about using one situation to help explain another.

In pursuing these different aspects of thinking, the author takes the reader on a journey through an extraordinary range of disciplines including economics, cognitive science, philosophy, morality, mathematics, experimental science, theoretical science, law and business management. We get to see how easily and frequently people are misled into making poor decisions, different ways in which people distinguish right from wrong, the most effective ways of testing hypotheses, and how insights really happen.

I thoroughly enjoyed reading the book, which I found to be as entertaining as it is informative. Most readers will benefit by having their understanding of what is meant by “thinking” considerably broadened by the book’s cross-disciplinary approach.

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