Rules of Thumb: A book review

Rules of Thumb: 52 Truths for Winning at Business Without Losing Yourself
Alan M. Webber
HarperBusiness/HarperCollins (2009)

Entertaining as well as informative results from a world-class muller

Thus book is as difficult to describe as it is easy to appreciate. What we have here is a series of 52 mini-commentaries, each devoted to an insight or conviction that Alan Webber has formulated throughout his life thus far. As I worked my way through them, I was reminded of Isaac Asimov observation, “The most exciting phrase to hear in science, the one that heralds new discoveries, is not ‘Eureka!’ (I found it!) but ‘That’s odd…’”

Presumably Webber has encountered situations that struck him as odd and wondered about them, finally reaching conclusions that he characterizes as unofficial “rules” or “truths” about human nature. I suspect that are probably viewed by most people as guidelines.

Although Webber suggests that they can be applied to “winning at business without losing your self,” I think they are relevant whenever and wherever there is human interaction. After about the first 12-15, I began to connect rules to specific situations.

For example:

Rule #10: “A good question beats a good answer.” This offers excellent advice to job candidates whose questions tend to reveal more about their abilities than their responses to an interviewer’s questions do.

Rule #13: “Learn to take no as a question.” Sometimes, no means no. However, on frequent occasion, no is a tentative rather than terminal response. Politely request an explanation and be well-prepared to respond to the reasons offered.

Rule #18: “Knowing it ain’t the same as doing it.” This reminds me of a book with an eponymous title, in which Jeffrey Pfeffer and Robert Sutton discuss what they call “The Knowing-Doing Gap.” Long ago, Thomas Edison said, “Vision without execution is hallucination.”

Rule #43: “Don’t confuse credentials with talent.” Make no mistake, credentials can have substantial value but (as #18 suggests) they offer evidence of nothing more than what obtaining them required.

With regard to talent, I agree with Anders Ericsson and his research associates at Florida State University that its importance also tends to be overrated. Darrell Royal once observed that “potential” means “you ain’t done it yet.” In my opinion, the best credentials are redundantly verifiable accomplishments that are relevant to the given needs.

Rule #45: “Failing isn’t failing. Failing is failing to try.” I agree, presuming to add that that failing is also failing to learn anything of value from whatever is considered a failure. Back to Edison who cherished every setback in his Menlo Park research center as a precious learning opportunity.

After you read Alan Webber’s book, he invites you to formulate your own Rule #53 and then share it with him (alan@rulesofthumbbook.com). I hope you do. Here’s the one I came up with: “You better be there when your name is called,” perhaps inspired by Woody Allen’s assertion, “Eighty percent of success is showing up.”

Osamu Abe, Hadenya, Japan – Community Organizer, and Leader, of the Year

searching for the very stuff of life after the Tsunami (photo: Ko Sasaki, The New York Times)

So what do you do when your village is pretty well wiped out by a Tsunami?  You organize – fast!

In Hadenya, Japan, the people immediately went to work, organizing for their own survival.  They identified a leader, Osamu Abe, who rose to the challenge.  (this reminds me of the work of Luis Urzúa, Shift Foreman – Leader of the Decade).

The story is told by this terrific article in the New York Times:  Severed From the World, Villagers Survive on Tight Bonds and To-Do Lists.  (I read an edited verison in the print edition of today’s Dallas Morning News).

Yes, the story is a testament to the great Japanese spirit and culture:
The ability of the people of Hadenya to survive by banding together in a way so exemplary of Japan’s communal spirit and organizing abilities is a story being repeated day to day across the ravaged northern coastline, where the deadly earthquake and tsunami left survivors fending for themselves in isolated pockets.

But it is also the story of a leader who does, naturally, out of necessity, what good leaders do.  He did a quick SWOT analysis, and set people into their specific work groups.  Here are some of the details, (from the article):

…they began dividing tasks along gender lines, with women boiling water and preparing food, while men went scavenging for firewood and gasoline. Within days, they said, they had re-established a complex community, with a hierarchy and division of labor, in which members were assigned daily tasks.

Mr. Abe said he naturally assumed a leadership role over the frightened survivors because he had had a prominent job in the village, as head of the local nature center. He said the first thing he did after the tsunami was get the older schoolchildren to erect tents in the community center’s parking lot, since aftershocks made survivors afraid to sleep inside.

Later, he sent a group down to a marsh to get water, and others to gather firewood — mostly the wooden debris from broken houses — in order to boil it. When one woman turned out to be a nurse, he asked her to set up a makeshift clinic, behind a sheet in one corner of the center, which was now filled with survivors sleeping on the floor.

“People needed a sense of direction,” Mr. Abe said. “They were stunned from having lost everything.”

The next day, groups were sent to scour the wreckage for supplies. One found a truck washed up by the waves that was filled with food, which barely kept them fed until the first helicopters reached them four days later.

Another group searched for fuel. Shohei Miura, a 17-year-old high school junior, said he helped drain gasoline from the tanks of the dozens of smashed cars left behind by the tsunami. He also found kerosene in beached fishing boats.

So what did this leader, Mr. Abe, do? – with the full cooperation of his ready-to-listen-and-execute followers?

He assessed the most desperate needs.

He provided a sense of direction.

He assigned specific tasks to specific groups.

He discovered the unique abilities of individuals – he identified a nurse, and put her her to work setting up a clinic.

And he helped everyone remember that help would come – he helped keep hope alive.

I think, as we read all of these wonderful books about better known leaders, they these may all have been surpassed by Osamu Abe, community organizer and leader of the year.

4 Steps to the Next Breakthrough Idea

Herb Schaffner

Here is an article written by Herb Schaffner for BNET, The CBS Interactive Business Network (March 23, 2011). To check out an abundance of valuable resources and obtain a free subscription to one or more of the BNET newsletters, please click here.

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Thousands of business books are published every year, so sometimes very good ones get overlooked. Seizing the White Space, by Mark Johnson, a management consultant, is one of those books that deserves a second look.

Published last year by Harvard Business School Press, the book offers a road map to innovation. Specifically, it is about “white space plays” – strategies to leap frog out of crowded markets into new, open spaces by radically changing your business model. Johnson, chairman of Innosight, a consulting and investing company that he co-founded with Harvard Business School professor Clayton M. Christensen, delivers a case-study rich guide that shows how changing your company’s business model can enable you to dominate new markets.  He calls this approach “business model innovation” and says a number of leading companies, from Dow Corning to Ryanair to Whole Foods, are using it to bypass traditional markets to sell products and services where few competitors can be found.  It’s what Ikea did when it left behind the traditional home furniture market of expensive, heirloom purchases to market low-cost, appealing and essentially disposable furniture with youthful designs.

If making a white space moves sound  risky, that is because it can be. Companies need to first understand how to change their business model before they can successfully branch out.  In his book, Johnson identifies the fundamental building blocks key to making this transformation:

1.) Rethink the customer value proposition: Stop trying to figure out what products customers are trying to buy or have bought in the future, and instead “work out what they are trying to get done in their lives in a given circumstance,” Johnson writes.  This requires taking time to understand and study particular customers, and walk in their shoes.   That’s what Ratan Tata, chairman of the Tata Group and a major Indian industrialist, did when he looked out an India’s streets and highways.  He saw a nation where lower-income families traveled by motor scooter and came up with a solution: to produce a car for a fraction of the price of other cars.

2.) Redefine your “profit formula,” the economic blueprint that defines how a company will create value for itself and its shareholders. To make a successful white space move, you must calculate how big your company has to be to break even and then make a profit–and how fast you need turn over sales to achieve adequate returns. Amazon conquered a white space–online book retailing–in large part by combining Internet technology with just-in-time inventory management to slash the days it held publishers’ books.  Brick and mortar stores typically carried inventory and therefore publisher’s costs, for 168 days; Amazon slashed that to 17 days.  This allowed Amazon to shift the publishers’ costs back to them, while carrying their customers’ cash during the time it processed their order.

3.) Deploy the resources and 4.) create the processes necessary to realize your new vision. For example, Ryanair achieved their  vision of an ultra low-cost airline by flying out of secondary airports, using non-unioned workers and maintaining a Spartan headquarters.  In order to create the $2500 Nano car for the masses, Tata dramatically reduced the number of parts in the car, outsourced 90% of the components, and slashed the number of vendors it needed to make the car.

Do you think you could help your company make a white space play? What steps would you add to this list?

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Related:

How to Stop Procrastinating–Right Now

How to Overcome Creative Blocks and Distractions

Getting Along with the Office Jerk

Herb Schaffner is president of Schaffner Media Partners, a consultancy specializing in business, finance, and public affairs publishing expertise, and is found on Facebook.  He has been a publisher and editor-in-chief at McGraw-Hill, and a senior editor at HarperCollins.

Rethinking knowledge work: A strategic approach

Thomas Davenport

Here is an excerpt from an article written by Thomas H. Davenport for The McKinsey Quarterly, featured online by McKinsey & Company. Although the thrust of the material is focused on larger organizations, there are some key points relevant to all organizations, whatever their size and nature may be.

To read the complete article and check out other resources, please click here.

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Knowledge workers’ information needs vary. The key to better productivity is applying technology more precisely.

In the half-century since Peter Drucker coined the term “knowledge workers,” their share of the workforce has steadily grown—and so has the range of technology tools aimed at boosting their productivity. Yet there’s little evidence that massive spending on personal computing, productivity software, knowledge-management systems, and much else has moved the needle. What’s more, a wide variety of recent research has begun suggesting that always-on, multitasking work environments are so distracting that they are sapping productivity. (For more on this problem, see “Recovering from information overload.”)

After researching the productivity of knowledge workers for years, I’ve concluded that organizations need a radically different approach. Yes, technology is a vital enabler of communication, of collaboration, and of access to rising volumes of information. But least-common-denominator approaches involving more technology for all have reached a point of diminishing returns. It’s time for companies to develop a strategy for knowledge work—one that not only provides a clearer view of the types of information that workers need to do their jobs but also recognizes that the application of technology across the organization must vary considerably, according to the tasks different knowledge workers perform.

Few executives realize that there are two divergent paths for improving access to the information that lies at the core of knowledge work. The most common approach, giving knowledge workers free access to a wide variety of tools and information resources, presumes that these employees will determine their own work processes and needs. The other, the structured provision of information and knowledge, involves delivering them to employees within a well-defined context of tasks and deliverables. Computers send batches of work to employees and provide the information needed to do it.

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The greatest potential for productivity improvements involves bringing more structured knowledge to workplaces and processes where the free approach has dominated. So far, lower-level process work has been the primary beneficiary of structured-provision tools. However, advancing technologies are making them better suited to tasks that until now have been the preserve of free-access approaches—tasks centered on expert thinking and collaboration. In one example, a major academic medical center is employing “smart forms” that present physicians with all the available information about a particular patient’s disease on one screen and even produce first drafts of notes about their interactions with patients for medical records.

Some forward-looking companies are testing more structured approaches in a broader range of work, often with positive results.

Here are three areas of progress.

High-level work

Companies have considerable opportunity for applying structured technology and processes to the more routine aspects of even highly collaborative jobs. An insurance company, for example, implemented workflow- and document-management technologies to help develop and modify its investment portfolio. The system replaced numerous spreadsheets and e-mails with a common global system that synchronized communications and transactions among several different groups across several countries. Each group (including operations, funding, controls, and legal) now adds its components to the portfolio. When a new portfolio or modification is completed, the documents are finalized and sent to an external custodian for management and recording. Fund managers find the system relatively noninvasive; if their involvement is needed for a decision or approval, they are notified automatically via e-mail.

Better processes

Technologies are also being used to structure previously unstructured processes. For example, GE Energy Financial Services, which specializes in lending for large energy projects, has worked to boost the productivity and quality of decisions in its loan underwriting. A managing director with responsibilities for the unit’s marketing and investment strategy brought together GE analysts and researchers, who extracted typical decision rules from experienced company executives. The rules were embedded in a semiautomated decision system that scores prospective deals and recommends that they be approved or disapproved. Junior analysts can use the system to determine whether a deal is likely to succeed—without taking it to a credit committee comprising senior business unit executives, who can of course override the recommendation if they wish to do so. Deals made using the new approach have generated returns 40 percent higher than the old, unstructured one did.

Hybrid approaches

Some organizations combine the free and structured approaches. One of the easiest ways of doing so is to place partial restrictions on the types of information highly autonomous workers can use—for example, by limiting access to pornography, sports, or social-networking sites while at work. A more nuanced approach allows employees to be both free and structured. Partners Healthcare, which comprises several teaching hospitals in Boston, has a structured system that automatically recommends appropriate drugs and treatments to physicians but allows them to override it. The organization also makes a variety of free-access knowledge databases available to doctors, but the structured system, which incorporates medical knowledge into the process for ordering care, is used much more frequently.

A related approach imposes structured techniques for only some aspects of a job. Some companies, for example, use product-lifecycle-management systems to structure the back end of the product design process but don’t use them during the early product conceptualization and brainstorming stages. The key issue here is to decide which aspects of the relevant process could benefit from more structured technologies and processes and which should be left largely untouched by them.

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To read the complete article and check out other resources, please click here.

Thomas H. Davenport, an alumnus of McKinsey’s New York office, holds the president’s chair in information technology and management at Babson College.

Eat People: A book review by Bob Morris

Eat People…and Other Unapologetic Rules for Game-Changing Entrepreneurs
Andy Kessler
Portfolio/The Penguin Group (2011)

How and why “Free Radicals” create wealth for themselves and meanwhile improve the world

Initially, I was somewhat put off by this book’s title but it certainly caught my attention and thus served its purpose in that respect. However, I wonder, how many people will let it go at that rather than read and then consider what Any Kessler has to say about various “unapologetic rules for game-changing entrepreneurs”? As my rating indicates, I think he has much of value to say…and says it well.

With regard to the meaning and significance of the book’s title, here is what Kessler observes:  “the best way to leverage Abundance and Scale and to create Productivity is to get rid of people…Now I’m not suggesting we actually eat anyone…But we do need to get rid of worthless jobs [and those who languish in then]…There’s nothing productive about [many different kinds of jobs], though they may be temporarily necessary until someone, a true Free Radical, writes a piece of code to make them obsolete. That’s how you create productivity…If you look at the world through a productivity filter, a lot more things start to make sense, especially about who is pulling their load and who is just along for the ride.”

As Kessler goes on to explain, a “Free Radical” is a change agent who is determined to eliminate anyone and anything that reduces (if not eliminates) value, however defined. Especially during the current Depression/Depression/Great Reset/Whatever, it makes no sense to leave in place barriers (human and non-human) to productivity and efficiency, that are both scalable and sustainable.

How to decide what to do and not do? Kessler offers a baker’s dozen of “Rules” (the last is a bonus) and devotes a separate chapter to each. He explains why and how all can be essential “game-changers” for Free Radicals such as John D. Rockefeller, Andrew Carnegie, Henry Ford, and Sam Walton. However different they may be in most other respects, all of them not only created wealth for themselves, but at the very same time, improved the world, made life better, and increased everyone else’s standard of living. As Kessler explains, “Free Radicals found situations to combust and destroy, but in the end, it was only to make room to build the new [and the improved] – disrupt the status quo, do more with less, advance society, drive progress rather than have progress drive them. A free Radical is someone who gets wealthy inventing the future by helping others live longer and better.” So, “eating people” is a metaphor for the process by which Free Radicals (Creators) and their allies (Servers) eliminate whoever and whatever opposes or impedes “increasing productivity, increasing society’s wealth, reinventing the way the world works and generating enough (altruistic?) profits to reinvest in their process to keep this reinvention going for decades on end. These are the real heroes in history.”

Those who share my high regard for this book are urged to check out the just published 10^th Anniversary Edition of The Cluetrain Manifesto co-authored by Rick Levine, Christopher Locke, Doc Searls, and David Weinberger ; also, Bill Jensen and Josh Klein’s Hacking Work: Breaking Stupid Rules for Smart Results, and Rework, co-authored by Jason Fried and David Heinemeier Hansson.

“Truths for winning at business without losing yourself….”

Alan Webber

That is the subtitle of a book, Rules of Thumb, written by Alan Webber and published by HarperBusiness in 2009.  What we have here is a series of 52 mini-commentaries, each devoted to an insight or conviction that Webber has formulated throughout his life thus far.

As I worked my way through them, I was reminded of Isaac Asimov’s observation, “The most exciting phrase to hear in science, the one that heralds new discoveries, is not ‘Eureka!’ (I found it!) but ‘That’s odd….’”

Presumably Webber has encountered situations that struck him as odd and wondered about them, finally reaching conclusions that he characterizes as unofficial “rules” or “truths” about human nature. I suspect that they are probably viewed by most people as head’s ups or guidelines.

Although Webber suggests that they can be applied to “winning at business without losing your self,” I think they are relevant whenever and wherever there is human interaction. These are among the ones that caught my eye:

#2: “Every company is running for office. To win, give the voters what they want.”

Comment: Customers “register” with their interest but “vote” with their cash, checks, and credit cards. If they are your evangelists, they will also highly recommend you and what you offer to everyone they know.

#4: “Don’t implement solutions. Prevent problems.”

Comment: In most organizations, there is too much firefighting and not enough fire prevention. Sun Tzu was right: Every battle is won or lost before it is fought.

#10: “A good question beats a good answer.”

Comment: When Albert Einstein was asked by a colleague why he asked the same questions every year on the final examination he gave to his graduate students at Princeton, he replied “Every year, the answers are different.”

#16: “Facts are facts; stories are how we learn.”

Comment: All of history’s greatest leaders were great storytellers.

#34: “Simplicity is the new currency.”

Comment: What Oliver Wendell Holmes once characterized as “simplicity on the other side of complexity” continues to have great value because it is so rare.

After you read Alan Webber’s book, he invites you to formulate Rule #53. I hope you do and then share it with FFBS.

Don’t End Your Day Without Doing This

Jeff Haden

Here is an article written by  Jeff Haden for BNET, The CBS Interactive Business Network (March 24, 2011). To check out an abundance of valuable resources and obtain a free subscription to one or more of the BNET newsletters, please click here.

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It’s true: LeBron, D-Wade, and Chris Bosh can help you improve your business.  Here’s how.

Every NBA team reviews the way it played the last game. Then the coach and players continue the exercise in self-reflection in front of the media at post-game press conferences.

You can and should do the same by holding your own post-business day “press conference” to get a more objective view of how you performed.  I’m not suggesting you review the performance of your business on an emotional level as the aforementioned players have on occasion. Instead, at the end of each day pretend you are asked to explain the reasons behind decisions, whether you achieved specific goals, and why you “won” or “lost” that day.

Pretend you’re asked questions like:

“Wow — you closed a lot fewer sales today than average.  What threw you off your sales game?  What adjustments did you make mid-day?”

“Today you excelled in a lot of different areas of the business.  What caused such an outstanding performance?”

“You claimed going into the day you were focused on renewing contact with at least four previous customers.  What kept you from pulling that goal off?”

“I couldn’t help noticing that you didn’t communicate very well with other members of the team.  Is there an interpersonal issue we don’t know about?”

Granted, those questions have a sports flavor.  Yours don’t need to.  Just focus on how you performed against your goals, targets, and initiatives.  What went well?  What went poorly?

• If sales were down, why, and what I do to improve results tomorrow?

• If efficiency was down, what can I immediately do to turn it around?

• If a project exceeded expectations, how can I leverage that success on subsequent projects?

• What interpersonal issues popped up? What, if anything, will I do as a result?

• Which tasks on my to-do list did I accomplish?  Which did I not accomplish, and why?

Identify the key drivers of your business and review your performance against those drivers.

If you fell short in any area, put the issue at the top of tomorrow’s to-do checklist, along with any tasks you didn’t complete today.

If it helps, have a partner or colleague ask key questions, and return the favor.  You’ll keep each other on track.

Ask — and answer — the right questions, and you’ll hit the ground running even harder tomorrow.  Just remember that unlike a few Heat players after a recent loss, crying after the close of business is optional.

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Jeff Haden learned much of what he knows about management as he worked his way up the printing business from forklift driver to manager of a 250-employee book plant. Everything else he knows, he has picked up from ghostwriting books for some of the smartest CEOs he knows in business. He has written more than 30 non-fiction books, including four Business and Investing titles that reached #1 on Amazon’s bestseller list. He’d tell you which ones, but then he’d have to kill you.