Why you should avoid charismatic leaders

Here is an article written by Margaret Heffernan for CBS MoneyWatch, the CBS Interactive Business Network. To check out an abundance of valuable resources and obtain a free subscription to one or more of the website’s newsletters, please click here.

(MoneyWatch) I’ve written about the perils of narcissistic leaders. They’re dangerous because they want the applause that ensues after big dramatic gestures and that inclines them to heroic strategies that make their companies far more volatile. But what about charismatic leaders — doesn’t every company want to find its own Steve Jobs?

No, at least not according to Christian Stadler, writing in MIT Sloan Management Review. I like Stadler’s work because, as you might expect of a European, his sense of history is more than a week long and he’s interested in the patterns and lessons it can offer. Surveying 100 years of European business leaders, he found that leaders of high-performing companies were not charismatic — at least not as charismatic as the leaders of companies that did worse. He argues that the problem with charisma is that you can persuade just about anyone to do anything — even when it’s crazy.

Poster child for the perils of charisma is Michael Frenzel, Chief Executive of TUI AG, Europe’s largest travel agency. When he got the top job, the company main business lay in commodities and steel. But this was too boring for Frenzel who divested himself of those “old economy” businesses and instead went pell-mell into the travel business. The timing was wrong, the strategy was flawed and in 15 years, TUI shares lost almost 60 percent of their value.

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To read the complete article, please click here.

Margaret Heffernan has been CEO of five businesses in the United States and United Kingdom. A speaker and writer, her most recent book Willful Blindness: Why We Ignore the Obvious at Our Peril was shortlisted for the Financial Times Best Business Book 2011. Visit her on www.MHeffernan.com. You may also wish to check out another of Margaret’s articles, How to survive a narcissistic leader by clicking here.

World Changers: A book review by Bob Morris

World Changers: 25 Entrepreneurs Who Changed Business as We Knew It
John A. Byrne
Portfolio/Penguin Group (2011)

Exemplars of an opportunistic mindset and acceptance of risk and potential failure, as well as independence and control

John A. Byrne is chairman and editor-in-chief of C-Change Media Inc., a digital media startup that is launching a network of websites for the global business community. C-Change currently has two highly successful sites, Poets&Quants.com and Poets&QuantsforExecs.com. Little more than two years old, P&Q generates more than one million monthly page views and boasts a book imprint division which published its first title in 2012. World Changers is his first book in ten years since the publication of his collaboration with General Electric Chairman Jack Welch. Straight from the Gut (2003). His other books include the recently published It’s All About Who You Hire, How They Lead…and Other Essential Advice from a Self-Made Leader (2013), co-authored with Mort Mandel, a self-made billionaire and highly successful entrepreneur in both the for-profit and non-profit worlds. Also, Informed Consent (1995), The Whiz Kids (1993), Chainsaw (1999), Odyssey (1987), and The Headhunters (1986).

Years ago during an annual meeting, GE’s then chairman and CEO, Jack Welch, explained his reasons for admiring entrepreneurial companies: “”For one, they communicate better. Without the din and prattle of bureaucracy, people listen as well as talk; and since there are fewer of them they generally know and understand each other. Second, small companies move faster. They know the penalties for hesitation in the marketplace. Third, in small companies, with fewer layers and less camouflage, the leaders show up very clearly on the screen. Their performance and its impact are clear to everyone. And, finally, smaller companies waste less. They spend less time in endless reviews and approvals and politics and paper drills. They have fewer people; therefore they can only do the important things. Their people are free to direct their energy and attention toward the marketplace rather than fighting bureaucracy.”

Byrne observes, “I’ve been flattered to have had General Electric CEO Jack Welch, an intrapreneur of there ever was one, ask me to work closely with him on his memoir – a collaboration that resulted in my spending more than a thousand hours with him. I envy that unique opportunity as well as Byrne’s conversations with 27 entrepreneurs whose 25 companies did indeed “change business as we knew it.”

Two of them co-founded Home Depot (Arthur Blank and Bernie Marcus) and another pair (Larry Page and Sergey Brin) co-founded Google. During the conversation with Blank and Marcus, Marcus recalls when they “threw GE out” and purchased their light bulbs from Philips. Welch responded, “Why would you do that to us? We’re friends.” Marcus’ reaction? “He was full of crap. His thing was bottom-line oriented and ours was customer oriented and it just didn’t match. It didn’t work. We bought a few things from him, including refrigerators. But he never got the bulb business back. He didn’t deserve to get it back.”

Byrne provides a brief but remarkably informative introduction to each conversation. However different the entrepreneurs may be in most other respects, all of them “share a set of common behaviors and attitudes. Ernst & Young’s own research identified what it calls the essence of an entrepreneur. It is, if you will, the shared DNA of people who are using their life’s work as an expression of self.” There are three core attributes that every entrepreneur shares: An Opportunity Mind-set, Acceptance of Risk and Potential Failure, and Independence and Control.

“To these three core strands, entrepreneurs bring drive, tenacity, and persistence. They live what they believe, building success on the basis of a strong culture and values. They seek out niches and market gaps. They are the architects of their own passionate and focused vision. While being non-conformist, they also are team players. And they are voracious networkers, building an ecosystem of finance, people, and know-how.”

Here in Dallas near the downtown area, we have a Farmer’s Market at which several merchants offer slices of fresh fruit as samples of their wares. In that spirit, I now share a few brief quotations from Byrne’s abundant orchard.

John Mackey, Whole Foods Market: “I do think we have a disruptive business model. But we don’t think about it in those ways. We are not a bunch of business school graduates who are trying to come up with a disruptive business model. We are a purpose-driven business, which is attempting to fulfill its mission. (Page 13)

Howard Schultz, Starbucks: “There was no efficiency at Starbucks. We were flying high without instruments. I say that with a smile but we shouldn’t be proud of that. But growth and success cover up a lot of mistakes. It’s hard to look in the rear-view mirror when you’re looking forward all the time.” (59)

Jess Bezos, Amazon: “The balance of power online moves away from the merchant toward the consumer. This is because customers have been information online. Comparison shopping is just a click away.” (67)

Herb Kelleher, Southwest Airlines: “The business of business is people. In a lot of companies you have to surrender your personality when you show up for work…We never felt that way. We always felt that if you allow people to be themselves at work, they will enjoy what they are doing. They’ll be more productive as a consequence of enjoying it.” (75)

Steve Jobs, Apple: “Picasso had a saying: `Good artists copy, great artists steal.’ We have always been shameless about stealing great ideas. Part of what made the Mackintosh great was the people who were working on it were musicians, poets, artists, historians, zoologists, who also happened to be the best computer scientists in the world.” (88)

Reid Hoffman, LinkedIn: “The old paradigm of climbing up a stable career ladder is dead and gone. No career is a sure thing anymore. The un certain, rapidly changing conditions in which h entrepreneurs start companies are what it’s no like for all of us fashioning a career. Therefore you should approach career strategy the same way an entrepreneur approaches starting a business.”

Oprah Winfrey, Harpo, Inc.: “How do you know when you’re doing something right? How do you know that? If feels so. What I know now is that feelings are really your GPS system for life. When you’re supposed to do something or not to do something, your emotional guidance system lets you know. The trick is to learn to check your ego at the door and start checking your gut instead.” (159)

Larry Page, Google: “We didn’t start out with a search engine at all. In late 19945, I started collecting the links on the Web, because my adviser [at Stanford's Graduate School] and I decided that would be a good thing to do. We didn’t know exactly what I was going to do with it, but it seemed like no one was really looking at the links on the Web – which pages link to which pages. So it is a huge graph. I figured I could get a dissertation and do something fun and perhaps practical at the same time, which is really what motivates me.” (199)

Phil Knight, Nike: “In the early days, when we were just a running shoe company and almost all our employees were runners, we understood the consumer very well. There is no shoe school, so where do you recruit people for a company that develops and markets running shoes? The running track. It made sense, and it worked. We and the consumer were one in the same.” (240)

Great stuff can be found within all of the 25 conversations. I feel obliged to point out that Byrne is an active participant, indeed an erudite contributor rather than someone who merely tees up questions to which others respond. I hope this brief commentary of mine makes crystal clear that John Byrne was uniquely well-qualified to conduct interviews of 27 entrepreneurs “who changed business as we knew it.” What they reveal and Byrne’s brilliant analysis of their revelations provide a wealth of information, insights, and wisdom in this single volume, published by Portfolio/Penguin Group (December 2011). These exemplars of entrepreneurism do indeed possess an opportunistic mindset and acceptance of risk and potential failure, as well as independence and control.

Lina Echeverría: An interview by Bob Morris

Lina Echeverría spent twenty-five years inspiring creativity and accelerating innovation at Corning Incorporated, one of America’s leading technology companies, that provided the world with everything from the optical fiber that enabled the Internet to the tough glass used for iPhones. Echeverría led teams of scientists and researchers that developed everything from ceramic filters for car exhausts, glasses for TV screens, optical glasses, and dinnerware.

At Corning, Echeverría created an environment where scientists were creative and productive; and teams balanced the ability to explore the edges of possibility, while delivering critical new technology on time and on budget. Echeverría was known not just for her ability to effectively lead and manage (and keep happy) creative scientists, but also for her ability to teach those skills to others. During her career, she led teams and organizations in the US and in France.


A native of Colombia, Echeverría was the first woman to seek admission and graduate in engineering geology from the Universidad Nacional de Colombia at Medellín, inspiring a generation of women who followed. She went on to earn a Ph.D. in geology at Stanford.

Echeverría stepped aside from the corporate world to help create cultures of innovation inside companies and organizations. The mother of two children, she is fluent in English, Spanish and French, and lives in upstate New York with her husband, a research scientist. Her last book, Idea Agent: Leadership that Liberates Creativity and Accelerates Innovation, was published by AMACOM (November 2012).

Here is an excerpt from my interview of her. To read the complete interview, please click here.

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Morris: Before discussing Idea Agent, a few general questions. First, who has had the greatest influence on your personal growth? How so?

Echeverría: With a start point of learning about providing constructive feedback, the guidance and dialogues with Dasarath Davidson opened the door to rich concepts on the spirit of leadership, empowerment and, mostly self-awareness. He understood my approach to leading groups and growing people and gave me the tools so the experience would be fulfilling, not frustrating, enriching, not draining. He was deep, demanding, and relentless and taught me much about commitment and courage and, importantly, the practice of balancing passion and detachment, the only way to face tough situations.

Morris: The greatest impact on your professional development? How so?

Echeverría: My advisor at Stanford, Bob Coleman, had a great impact in giving me wings, while raising the bar for every thing I did. He would put me on center stage of interesting challenges and opportunities, new to me and significant to him, and never failed to trust in me. He gave me a sense of empowerment that is still priceless—and terrific approaches, like his demand for “three options” for every challenge one faces.

Morris: To what extent has your formal education been invaluable to what you have accomplished in life thus far?

Echeverría: I believe the greatest value of a formal education is that it surrounds you with people who are sharper than yourself, forcing you to bring out the best in you; it opens doors to fields and people and ways of doing things that enlarge your own. One has no idea if the field that you train for is going to be applicable to future activities. For many that is indeed the case: they keep and going deeper and deeper to become the world’s experts in one fields. But not for all. I went into geology because I fell in love with rocks, in the field and under the microscope with the puzzle of mountain building. I had no idea that it would lead me to glass chemistry and on the corporate world.

Morris: Here are several of my favorite quotations to which I ask you to respond. First, from Lao-Tzu’s Tao Te Ching:

“Learn from the people
Plan with the people
Begin with what they have
Build on what they know
Of the best leaders
When the task is accomplished
The people will remark
We have done it ourselves.”

Echeverría: Funny you should start with one of my very favorite quotations, from the sixth century BC Lao Tzu—though I have known it in a different form:

A leader is best when people barely know that he exists,
not so good when people obey and acclaim him,
worst when they despise him.

“Fail to honor people,
they fail to honor you.”
But of a good leader, who talks little,
when his work is done, his aim fulfilled
the people will say, ‘We did this ourselves’ “

It is a timeless and compelling description of authentic leadership. It talks about things that are essential to authentic leadership such as empowerment and leadership as service (as opposed to self-aggrandizement).

Morris: Next, from Voltaire: “Cherish those who seek the truth but beware of those who find it.”

Echeverría: This one takes us back to the previous one, as often those who “have found the truth” believe themselves to be superior, hence the fallacy of their own position.

Morris: And then, from Oscar Wilde: “Be yourself. Everyone else is taken.”

Echeverría: The genius of Oscar Wilde is hard to match. So is his sarcastic humor. And in this one, he pairs them both.

Morris: From Albert Einstein: “We cannot solve our problems with the same thinking we used when we created them.”

Echeverría: An earlier version of the need for “out of the box” thinking. Or “paradigm shift”. Too bad the concepts have become clichés, rather than understood and truly used, as Einstein extols us. Perhaps this is simply proof of how hard it is to break old habits.

Morris: Finally, from Peter Drucker: “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”

Echeverría: Efficiency is often the great enemy of significance. But it has a lot of clout, and often takes first place in initiatives.

Morris: In Tom Davenport’s latest book, Judgment Calls, he and co-author Brooke Manville offer “an antidote for the Great Man theory of decision making and organizational performance”: organizational judgment. That is, “the collective capacity to make good calls and wise moves when the need for them exceeds the scope of any single leader’s direct control.” What do you think?

Echeverría: I read this as a call for empowerment, a concept that I resonate with, that I have relied on, and that I have seen produce amazing results. Empowerment is about distributing authority in a group, it is about encouraging accountability to release the full power of its members, and about delivering BIG. Rather than weakening and debilitating the influence of a leader, as may be feared, in reality this commitment between organization and leader has compelling sway in unleashing and driving high performance.

Morris: Here’s a brief excerpt from Paul Schoemaker’s latest book, Brilliant Mistakes: “The key question companies need to address is not ‘ Should we make mistakes?’ but rather ‘Which mistakes should we make in order to test our deeply held assumptions?’” Your response?

Echeverría: I would have a hard time predicting which mistakes one should aim for. It is just as hard as predicting which ideas will succeed and which will fail. They are both exercises in futility. What I would advocate is that space for mistakes be made, the safety nets below the tall branches where the daring need to climb. If one needs to test the organization’s and leader’s deeply held assumptions, just give space to the members of the organization to define best practices; to think the un-thought of, to come up with ideas and push them through. As they do so, give them space to question. Their questioning will uncover those deeply-held beliefs and assumptions that, as your Peter Drucker quotation suggests, often point in directions better left untouched.

Morris: In your opinion, why do so many C-level executives seem to have such a difficult time delegating work to others?

Echeverría: Delegation is an important component of empowering others. The empowering stand of leading to bring out the best in others is about believing in people and being committed to their success and well-being. It is about seeing their potential—even before they do—and developing it, creating opportunities for them to walk into and grow, raising the bar and challenging people to stretch and expand. But it is also about raising the performance of an organization to achieve unprecedented results. Unfortunately, empowering is often interpreted as lack of authority and inability to control.

As to their reasons for not delegating, leaders are often beleaguered by desires identified with leadership—success, acclaim, influence, authority, control, fame, fortune, relationships, status—and their leadership experience becomes one of repeating actions that result in the pleasing reaction. Furthermore, at other side of the coin of desire appears the fear of not having what we desire. The mirror image of what we desire is what we often fear. If we desire authority and control, we dread delegation and empowerment. Leaders who desire control and authority are seldom those who are willing to delegate and empower.

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To read the complete interview, please click here.

Lina cordially invites you to check out the resources at her homepage.

5 Biggest Leadership Lessons From 2012

Flight director Keith Comeaux, right, celebrates with Martin Greco after a successful landing of NASA’s Mars Science Laboratory Curiosity rover at Jet Propulsion Laboratory on August 5, 2012 in Pasadena, California.

Here is a brief excerpt from an article written by Les McKeown for Inc. magazine. To read the complete article, please click here.

Photo: Pool/Getty Images

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It’s been quite a year for leadership lessons. Let’s check out what events should shape your leadership goals for 2013. Any one of a multitude of events in 2012 (Hurricane Sandy, The London Olympics, Benghazi and its fallout) would provide a case study in how to lead–and sometimes, sadly, how not to.

Here [is the first of] my personal top five leadership lessons from 2012:

1. Institutionalize your Vision (with a capital V).

It’s over a year since he died, but Steve Jobs was still handing out leadership lessons in 2012.

The question everyone began asking almost immediately his sad, early death was announced was: “Will Apple survive the loss of its Visionary founder?”

This year showed that, while the jury is still out as to whether it will be exactly the same company or not, Apple isn’t going to disappear any time soon–far from it.

Unlike CEOs at companies such as Starbucks, Gateway, and Dell, Steve Jobs clearly succeeded in institutionalizing his vision by driving it deep into the very warp and woof of the company and instilling it into Apple’s management DNA.

Howard Schultz, for example, hasn’t yet achieved this at Starbucks. He’s still the personification of “his” company’s vision.

Are you the personification of your company’s vision? If you left, would it leave too? Or have you hired, mentored and coached your vision into the company, so that it would stand without you?

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To read the complete article, please click here.

Les McKeown is the author of the bestseller Predictable Success: Getting Your Organization on the Growth Track–and Keeping It There and is the CEO of Predictable Success, a leading advisor on accelerated organizational growth. His latest book is The Synergist: How to Lead Your Team to Predictable Success.

Ken Segall: An interview by Bob Morris

Ken Segall  worked closely with Steve Jobs as his ad agency creative director for over 12 years spanning NeXT and Apple. He led the advertising team behind the “Think different” campaign that helped revitalize the Apple brand when Steve returned from exile in 1997; he co-wrote the first commercial ever to win an Emmy; and he set Apple down the i-way by naming the iMac. Having served as global creative director at agencies for Dell, IBM and Intel, Ken is in a unique position to describe how Apple’s culture sets it far apart from its competitors. And that’s just what he’s done in his bestselling book, Insanely Simple. Illustrating his points with behind-the-scenes stories from Steve Jobs’ world, Ken shows how the love of simplicity has guided the way Apple organizes, innovates, communicates and markets — and how simplicity has helped build the most valuable company on earth. Ken currently does creative work, branding and product naming for major brands. He blogs about technology and marketing at kensegall.com, and he has fun with it all at his Apple satire site, Scoopertino.com.

Here is an excerpt from my interview of him. To read the complete interview, please click here.

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Morris: Before discussing Insanely Simple, a few general questions. First, who has had the greatest influence on your personal growth? How so?

Segall: At the risk of sounding like I’m obsessed with all things Apple, the easy answer to that question is: Steve Jobs. He was a truly remarkable person in so many ways, probably even more so to those who got to see him up close. I don’t think I ever left a meeting with Steve without being amazed how intensely smart and focused he was. I’m not at all surprised he was able to accomplish what he did. So to me, Steve was a person to be admired, and he opened my eyes to the things that are possible when you put all your energy into what you believe.

We’ve all heard stories about the not-so-nice things that Steve did, and many of those stories are true. But there was also a side to Steve that never got much press. He could be charming, energizing and even fun. He was a complicated mix — but I found him to be an inspiration, and he changed the way I live and work.Morris: To what extent has your formal education been invaluable to what you have accomplished in life thus far?Segall: Every few years, I stumble upon my college transcript in a dusty file, and I’m always amazed — because I haven’t the faintest memory of having taken 99% of those classes. In my case, college was really more of a training ground for learning how to succeed. It presented me with a goal (getting a degree), and let me figure out the best way to achieve it. Learning how to allocate time and money to achieve a goal is a good foundation for a young person just setting out in life.

Ironically, I took an aptitude test before I entered college (Penn State) that indicated I might be a good fit in the world of advertising. That sounded somewhat interesting to me, so that’s what I signed up for. However, just seven weeks into my first term, I abandoned ship on that major and never looked back. I graduated with a BA degree and decided to play drums instead.

That’s what I did for the next seven years, until at the ripe old age of 29, I ended up in … advertising. I really should have given that aptitude test more credence. Given my experience, I’m always surprised to meet advertising people who actually studied for that profession. All the more power to them, but I found that my worldly adventures really helped me when I did get into advertising at a more advanced age. I had a better understanding of what makes people tick, and was able to tap into this understanding when I wrote headlines and copy. I probably advanced in the business more quickly than those starting right out of school.

Morris: What do you know now about the business world that you wish you knew when you when to work full-time for the first time? Why?

Segall: Because I started later than most, and therefore had some maturity going for me, I don’t lament any lack of knowledge when I broke into the business. In fact, I often talk about how my innocence and idealism served as a business advantage. To me, the advertising business was fresh and exciting, and I didn’t get why some of the older people seemed to be trying to find a way out. One of the things that got me excited about working in an agency was the intelligence and wit I saw all around me. Unlike a lot of my fellow musicians, my advertising colleagues actually read newspapers. They were stimulating to be around. Very quickly, I felt like “these are my people.” Of course, there were some embarrassing moments as I learned what advertising was all about. Starting at Chiat/Day in L.A., I distinctly remember the first time I saw the form upon which copywriters would submit their final work. At the top of the page, in big type, it said “COPY.” I thought that was special paper for the Xerox machine. Little did I know that a career in copy awaited me.

Morris: Of all the films that you have seen, which – in your opinion – best dramatizes important business principles? Please explain.

Segall: This probably isn’t the answer you’d expect, but I’ll go with The Hudsucker Proxy. First, I’m a Coen Brothers fan (I did short promotional film with them about Apple’s Final Cut Studio video editing suite some years ago). Second, in typical Coen Brothers fashion, it has some wonderfully exaggerated characters and improbable plot lines. Yet we get an interesting assortment of the things we see in business every day: plotting, scheming, backstabbing, subterfuge and greed. I say all of this tongue-in-cheek, of course, but the movie wouldn’t be fun if such things didn’t actually exist in the corporate world. So in that sense you might even consider it educational.

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To read the complete interview, please click here.

You can learn more about Ken, his book, and his blog by visiting kensegall.com.

Confronting the Pain of Innovation

Here is an article written by Michael Schrage and published in Harvard Business Review. To read the complete article, check out all the other resources, sign in or sign up for HBR email alerts, and obtain discount information, please click here.

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Working “out of your comfort zone” is the euphemism; the organizational reality is “working through pain.” Innovation hurts.

Every organization I’ve observed that’s serious about being innovative is filled with people in genuine pain — not just stress or anxiety or deadline pressure, and certainly not discomfort. Pain. This can be the physical strain of consecutive all-nighters to test every meaningful configuration of a website before it goes live, to the emotional pain of subordinating your vision of the innovation to the vicissitudes of customer taste. Ideally, innovators go through pain so their customers and clients won’t have to

The International Association for the Study of Pain Management defines pain as “an unpleasant sensory and emotional experience…” That fairly captures a dominant innovation sensation at world-class innovators. The innovation cultures of Google, Samsung or Steve Jobs’ Apple or Andy Grove’s Intel, for example, make painfully clear that successful innovators have high thresholds for pain. Unpleasant sensory and emotional experiences abound. Yes, there’s also fun and exhilaration. But innovation leadership is less about clichés celebrating creativity, compelling visions or getting the best out of people than successfully helping innovators beat what hurts. Overcoming resistance is not the same as pushing through pain.

That shouldn’t surprise. Confronting pain is integral to most other elite endeavors. World-class athletes and dancers explicitly train for pain even beyond the point of injury. Special Forces operators such as the Navy SEALs are expected to “Embrace the Suck.” Arguably one of the great flaws of formal business and technical education is that inculcating disciplined self-awareness around pain management is neither part of the culture nor the curriculum. But elite innovators, not unlike their athletic counterparts, understand and accept that they will likely hurt themselves and/or their colleagues on the path to innovation excellence. As Joseph Schumpeter of “creative destruction” fame notably observed, “successful innovation requires an act of will, not of intellect.

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To read the complete article, please click here.

Michael Schrage, a research fellow at MIT Sloan School’s Center for Digital Business, is the author of Serious Play and the forthcoming HBR Single Who Do You Want Your Customers to Become? To check out his other blog posts, please click here.

Here’s the July, 2012 New York Times Hardcover Business Books Best Sellers List – Steve Jobs Still at the Top

(Scroll down to see the actual list).

After a few month’s absence, the New York Times has returned with its list of Hardcover Business Books Best Sellers.

As I always note, this is the list that feels “most accurate” to me.  The weekly lists, and the hourly updated Amazon lists, represent too narrow a time horizon, in my opinion.  This list takes a longer, month-long view.

This month, we are seeing some titles that reflect our current political season.  And a couple of others definitely reflect the ongoing financial turmoil.

And, the list demonstrates the lasting power of the Steve Jobs book.  (I presented my synopsis of this book back in the January, 2012, First Friday Book Synopsis gathering.  Here it is, in July, still atop the list).

There are a couple of new titles that will make our list of “possibles” for our First Friday Book Synopsis.  For readers unaware of our event, my colleague Karl Krayer and I have presented one synopsis each of a business book, every month, since April, 1998.  We deliver these presentations at a monthly breakfast meeting in Dallas – open to all.  There aren’t many prominent or influential titles that we have missed over these 14+ years.  You can always check on the titles for the upcoming month’s event by clicking on our home page.  (We usually upload the next month by about the 10^th day of the current month).

From this month’s list, we have presented our synopses of the following titles at our First Friday Book Synopsis gatherings:  #1, Steve Jobs; # 2, Imagine; #3, Power of Habit; #5, Thinking Fast and Slow; and #14, Strengths Based Leadership.

You can see the full list, with more description, at the New York Times site by clicking here.  (And, here is the July, 2012 list of the top ten Paperbacks Business Books Best Sellers, also from the New York Times.  We have presented synopses of #1, Outliers; #2, Tipping Point; #3, Freakonomics; #4, Drive; #6, Checklist Manifesto; #8, Moneyball; and #9, The Big Short). 

You can purchase most of our synopses, with audio recordings of our presentations plus our comprehensive handouts, from our companion web site, 15minutebusinessbooks.com.

Here is the July, 2012 New York Times Hardcover Business Books Best Sellers List.

1	STEVE JOBS, by Walter Isaacson.
2	IMAGINE, by Jonah Lehrer.
3	POWER OF HABIT, by Charles Duhigg.
4	UNINTENDED CONSEQUENCES, by Edward Conard. (Portfolio/Penguin, $27.95.) A former managing director of Bain Capital and a major Romney contributor argues that growing income inequality shows the American economy is working. (†)
5	THINKING, FAST AND SLOW, by Daniel Kahneman.
6	CHARGE, by Brendon Burchard.
7	PRICE OF INEQUALITY, by Joseph E. Stiglitz.
8	SCREWED!, by Dick Morris and Eileen McGann.
9	HOW WILL YOU MEASURE YOUR LIFE?, by Clayton M. Christensen, James Allworth and Karen Dillon.
10	END THIS DEPRESSION NOW!, by Paul Krugman.
11	$100 STARTUP, by Chris Guillebeau.
12	REAL CRASH, by Peter D. Schiff.
13	HOW EXCELLENT COMPANIES AVOID DUMB THINGS, by Neil Smith with Patricia O’Connell.
14	STRENGTHS-BASED LEADERSHIP, by Tom Rath and Barry Conchie. (Gallup, $24.95.)
15	WINNER TAKE ALL, by Dambisa Moyo.

Insanely Simple: A book review by Bob Morris

Insanely Simple: The Obsession That Drives Apple’s Success
Ken Segall
Portfolio/Penguin (2012)

“I would give my life for simplicity on the other side of complexity.” Oliver Wendell Holmes

As Hannibal Lector explains to Clarice Starling in The Silence of the Lambs, the Roman emperor and philosopher, Marcus Aurelius, endorsed the idea of focusing on the essence of a subject. The French later formulated the concept of the précis. Still later, Oliver Wendell Holmes observed, “I would not give a fig for simplicity on this side of complexity but I would give my life for simplicity on the other side of complexity.” All this serves to create a context, a frame of reference, for Ken Segall’s brilliant analysis of what drove Steve Jobs to create an insanely great company that continues to produce insanely great products.

As Segall explains, “Simplicity doesn’t spring to life with the right combination of molecules, water, and sunlight. It needs a champion – someone who’s willing to stand up for its principles and strong enough to resist the overtures of Simplicity’s evil twin, Complexity. It needs someone who’s willing to guide a process with both head and heart.” These are among the passages, themes, and concepts that caught my eye throughout Segall’s lively and eloquent narrative:

o Standards Aren’t for Bending (Pages 15-16)
o Small Groups = Better [Collaborative] Relationships (35- 38)
o The Perils of Proliferation (52-54)
o Thinking Different vs. Thinking Crazy (74-77)
o Simplicity’s Unfair Advantage (93-95)
o Never Underestimate the Power of a Word (123-125)
o Death by Formality (132-135)
o Technology with Feeling (138-140)
o Ignoring the Naysayers: Inventing the Apple Store (180-184)

I have read all of the books written about Steve Jobs and Apple and reviewed most of them. In my opinion, with the exception of Walter Isaacson’s definitive biography, none provides a more thorough explanation of Jobs’s values, standards, and motivations than does this one. As Segall suggests, Jobs’s greatest achievement is that he “built a monument to Simplicity.” As Jobs invariably had the last word at the conclusion of conversations and meetings, it seems appropriate that he also have the last word now: “Simplicity can be harder than complex. You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end, because once you get there, you can move mountains.”

“You Owe A Debt To The Unlucky” – Michael Lewis Gives The Best Commencement Advice Of 2012

(Note:  the links are to the text of each of these speeches.  You can also find the video of each with little trouble.  And there are plenty of “compilations” of the “best  commencement speeches of 2012″ out there, like this one).

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I like commencement addresses.  I do not remember the one I heard when I graduated.  I do remember the speaker (not the message; the speaker) at my wife’s graduation.  But I’ve liked them more and more as the years have rolled on.

I suppose my favorite is Steve Jobs at Stanford, as I suspect you would suspect if you’ve read my blog for very long:  ”Stay Hungry. Stay Foolish. And I have always wished that for myself. And now, as you graduate to begin anew, I wish that for you.  Stay Hungry. Stay Foolish.”

But there are a lot of other good ones, and they keep coming.  This year, we’ve had Aaron Sorkin at Syracuse:  “…make no mistake about it, you are dumb. You’re a group of incredibly well-educated dumb people.”  And David Mccullough, Jr. at Wellesley High School (at a high school – I like that):  You are not special.  You are not exceptional. 

But, having presented synopses of five different books by Michael Lewis (including The New New Thing; Moneyball; The Big Short), it is not a surprise that moving near the top of the list of my favorites is Michael Lewis at Princeton  in 2012.  It is filled with Michael Lewis quality observation and insight.  Here is a great excerpt.  I’ve bolded what I think is the key line.

I wrote a book about this, called “Moneyball.” It was ostensibly about baseball but was in fact about something else. There are poor teams and rich teams in professional baseball, and they spend radically different sums of money on their players. When I wrote my book the richest team in professional baseball, the New York Yankees, was then spending about $120 million on its 25 players. The poorest team, the Oakland A’s, was spending about $30 million. And yet the Oakland team was winning as many games as the Yankees — and more than all the other richer teams.  

This isn’t supposed to happen. In theory, the rich teams should buy the best players and win all the time. But the Oakland team had figured something out: the rich teams didn’t really understand who the best baseball players were. The players were misvalued. And the biggest single reason they were misvalued was that the experts did not pay sufficient attention to the role of luck in baseball success. Players got given credit for things they did that depended on the performance of others: pitchers got paid for winning games, hitters got paid for knocking in runners on base. Players got blamed and credited for events beyond their control. Where balls that got hit happened to land on the field, for example.

Forget baseball, forget sports. Here you had these corporate employees, paid millions of dollars a year. They were doing exactly the same job that people in their business had been doing forever.  In front of millions of people, who evaluate their every move. They had statistics attached to everything they did. And yet they were misvalued — because the wider world was blind to their luck. 

This had been going on for a century. Right under all of our noses. And no one noticed — until it paid a poor team so well to notice that they could not afford not to notice. And you have to ask: if a professional athlete paid millions of dollars can be misvalued who can’t be? If the supposedly pure meritocracy of professional sports can’t distinguish between lucky and good, who can? 

The “Moneyball” story has practical implications. If you use better data, you can find better values; there are always market inefficiencies to exploit, and so on. But it has a broader and less practical message: don’t be deceived by life’s outcomes. Life’s outcomes, while not entirely random, have a huge amount of luck baked into them. Above all, recognize that if you have had success, you have also had luck — and with luck comes obligation. You owe a debt, and not just to your Gods. You owe a debt to the unlucky.  I make this point because, along with this speech, it’s something that you’re very likely to forget.

In an interview on PBS Newshour about the speech, Michael Lewis added these thoughts:

But I do think that there has been kind of sapped out of the culture an idea that used to be pretty robust. And it’s the idea of noblesse oblige. It’s the idea that to whom much is given, much is expected from.

And it’s an idea that it’s — you know, it’s the heart of the Princeton education. When you get there, they tell you, the motto is, in the nation’s service.

I would say that, look, that the successful in our society owe so much of their success to things outside of themselves. They owe it to the society, that they’re born into this affluent and peaceful society that was not of their making, that they should acknowledge that obligation.

And I think you see a lot of — a lot of fight-back on that subject. And you see it — you mean, you see it in the tax code. You see it in the way private equity managers manage to construe their income as capital gains, so they don’t have to pay taxes on it. You see it in CEO pay.

You see it in — you see it in the way Wall Street people pay themselves. So I think that — that even to — even to put the question into the minds of young people of what they owe is maybe a novel concept, because there are an awful lot of people who sit on top of the society who don’t feel that way.

Having said that, you know, I do think that one of the things that distinguishes our country from, say, Greece, is that we do have this notion that you give back. If you look at Greek culture and why — and why the place over there is crumbling right now, part of the problem is the elites feel they owe the place nothing. They don’t pay taxes. They don’t — they have no real organic relationship with the rest of the place, and they certainly don’t have a sense of noblesse oblige.

It’s sort of winner take all. And that’s something I think we need to really fight hard to avoid here, because when we get to that point, I do think the society starts to crumble. So this was on my mind when I wrote this talk. And I confess I’m a little surprised you’re interested, because, to me, it just seems obvious.

People go to their graduations, and promptly forget what they barely heard to begin with during the graduation speech.  And people read books, and articles, and blog posts, and promptly forget what they hear and read.

But maybe we should remember.  Maybe we should remember on purpose – you know, call to mind, and pay attention to…   “You have an obligation to the unlucky.”  An obligation! – to the unlucky.  This is something we should all remember, and pay a hefty amount of attention to, don’t you think?

Innovation + Communication – 2 Obvious Lessons From Apple’s Latest Big Event

Tim Cook at the June, 2012 WWDC

So, Apple had their newest big roll out yesterday.  (Watch the WWDC keynote here).  I am an Apple fan, but really only barely use my Apple devices (I have three; iMac, iPad, iPhone) to their capabilities.  But I loaded the Macrumors live blog of the event, glanced at it frequently, and followed along.  (And I kept looking for the announcement of the latest iMac, but, alas, it did not arrive.  My son assures me it is coming soon).

From the moment that Siri started it off, to the multiple announcements, the faithful seemed more than satisfied with the latest good news.  Here are two obvious lessons from yesterday’s event.  And, yes, they are obvious.  But the fact that they are obvious does not mean that other companies and organizations have figured out how to match Apple.

Lesson #1 – keep improving, keep tweaking, and keep innovating.  Make your really great products and services even greater.  Again and again.  From the devices to the software to the operating systems, what is insanely great about Apple now is better than what was insanely great about Apple a year ago, and we all know that by this time next year it will be even greater and better and cooler and “must have” all over again.  They give us great stuff now, and will keep on giving us greater stuff tomorrow and the day after tomorrow.

Phil Schiller introduces the new MacBook, “the most beautiful computer we’ve ever made.”

I don’t even understand all of the ways they make it better.  But I know it revolves around the entire package, the full constellation of offerings and capabilities – design, speed, (“faster, faster, faster, faster” – this was one of the mantras from yesterday) power, look, resolution, “retina display.”  Apple just keeps making every part of Apple, everything that is Apple, and everything that works with Apple, better.

But most of us do not learn this lesson in our work.  It took me way too many years to realize that while I talked about and spoke about constant improvement, I practiced very little of it.  Here’s an example:  for the first 13+ years of the First Friday Book Synopsis, my handouts for my synopses looked exactly the same:  a plain, boring-looking, Word document, with no design appeal at all.  Not too smart of me!   I finally realized it was time (way past time) to make some changes on my handouts.  We found a great designer to raise the look of our handouts to a new level.  And I think they look terrific.  And now, I have to figure out “so what’s next?” to keep getting better.  And, all along, I have to ask “how can I do my work better?”  It really is never ending.

Tim Cook (then COO) at the side of the Master

Lesson #2 – Communicate very well to all of your intended audiences.  Call it what you want:  learn to market; learn to sell; learn to call attention to; learn to create anticipation.  Though the current crop of Apple messengers cannot match the brilliance of Steve Jobs, (who could?!), they have clearly learned some major lessons from the master.  And yesterday was a sold-out, live-blogged, extravaganza of a show.  With videos and slides and demonstrations and team-presentations and multiple awe-inspiring moments for the faithful, Apple still seems to be at the top of their game.

You can read all you want about the need for better hard skills.  And many who write about those hard skills tend to almost look down on the place of those soft skills.

That is a really big mistake!

Apple’s success revolves around these two realities; they make great products, and they sell them even better.  Yes, this was part of the brilliance of Steve Jobs.  But isn’t it interesting that no other company has come close to matching this aspect of Apple’s approach?  Apple gets this – why don’t the rest of us?

Let me put it simply and bluntly – if you do not know how to communicate what you do, what you have to offer, clearly and compellingly, with excitement and great passion, then your great product just may go undiscovered by a whole lot of folks.

Two lessons:

Lesson #1 – keep improving, keep tweaking, and keep innovating.

Lesson #2 – Communicate very well to all of your intended audiences.

How are you doing?