Bookshelf | May/June 2016

A collection of reviewed books from the May/June 2016 print issue.

STRATEGY THAT WORKS

“A truly winning company is one that manages itself around a few differentiating capabilities—and deliberately integrates them. When companies accomplish this, we say they are coherent.” That’s the premise laid out by Paul Leinwand of PwC and Cesare Mainardi, formerly with Booz & Company, both adjuncts at Northwestern; and Art Kleiner, editor of PwC’s strategy+business magazine. A coherent company has closed the “strategy-to-execution gap” because it designs everything around its core goals and attributes. A company becomes coherent by committing to an identity, translating its strategic plan into everyday operations, putting its culture to work, cutting costs for everything not related to the core, and shaping its future through innovations. The authors describe companies such as Apple and Haier that have developed identities that not only permeate their entire operations, but also exert massive influence on their competitors. Their book provides a blueprint for leaders seeking coherence in their own ventures. (Harvard Business Review Press, US$32)

THE POWER AND INDEPENDENCE OF THE FEDERAL RESERVE

No one really understands the Fed. Even Wharton’s Peter Conti-Brown, who draws on law, history, and politics to write what amounts to a biography of the institution, notes that its core characteristics are “cloaked in opacity.” Nonetheless, he sets out to offer some understanding of how it is structured, who holds authority, and how it has evolved to the point where it can “influence every individual, institution, or government that interacts with the global financial system.” Not surprisingly, he believes the institution is ripe for reform. “As it stands today, the Fed’s governance is a mess. It can and should be clarified without sacrificing the essential tasks of regulating inflation and employment, free from the overwhelming influence of electoral politics.” While the topic is complex, layered, and labyrinthine, Conti-Brown’s clear analysis and elegant language make the book a fascinating read. (Princeton University Press, US$35)

LEAD AND DISRUPT

“Fifty years ago, the average life expectancy of a firm in the Standard and Poor’s 500 was fifty years. Today it is closer to twelve,” write Charles O’Reilly III of Stanford and Michael L. Tushman of Harvard. Yet some companies have managed to remain vibrant for more than a century, predominantly by moving into new industries. For instance, W.R. Grace is currently a US$2.5 billion chemical producer, but when it launched in 1854, its purpose was to ship bat guano from Latin America to the U.S. What factor allows some companies to adapt and thrive when others stumble and fail? O’Reilly and Tushman are convinced it’s leadership—more precisely, “ambidextrous” leadership exhibited by executives who understand not only what they must do, but how to do it. The authors profile leaders who seized opportunities, as well as those who squandered their chances to pivot. They also identify the key principles executives must follow to take companies through change. For instance, leaders must rally senior managers around compelling strategies, and they must choose exactly where to strike a balance between exploring new opportunities and exploiting existing strengths. Not easy, they admit—but essential. (Stanford Business Books, US$29.95)

THE THREE-BOX SOLUTION

Like the authors of Lead and Disrupt, Dartmouth’s Vijay Govindarajan focuses on how leaders can prepare for the future, but he believes they must do it by dividing their functions into three separate “boxes” of activities. They must “manage their present core businesses at peak efficiency and profitability (Box 1); escape the insidious traps of the past (Box 2); and innovate nonlinear futures (Box 3).” In one intriguing section, he calls these three functions “preservation, destruction, and creation” and links them to the Hindu gods of Vishnu, Shiva, and Brahma; he also describes how analytics firm Mu Sigma actually divides its leadership into three “clans” named after the three gods. He notes that most leaders are good at the Box 1 skills of managing successful operations, but many of them struggle with the Box 3 skills of innovating for the future or the Box 2 skills of distinguishing between timeless and “perishable” company values. He urges executives to think of the tri-part system as endlessly cyclical because “the business models, products, and services you create in Box 3 will at some point become your new Box 1.” (Harvard Business Review Press, US$32)

CULTURAL TRANSFORMATIONS

Leadership is also top of mind for John Mattone, an executive coach who teaches courses at Florida Atlanta University and ZfU International Business School, and Nick Vaidya, editor-in-chief of The CEO Magazine. They note that, in this world of accelerating change, many companies are “launching preemptive transformations, retooling themselves to stay ahead of their competitors.” But they believe companies can only successfully transform when the right leaders are at the helm, creating the right culture. They describe a hierarchy of leadership that evolves from the basic command-and-control approach to an interconnected, collaborative style—and they predict that only companies with that collective approach will achieve radical change. They write, “Thinking different and thinking big are the nonnegotiable prerequisites that will enable any organization to keep pace with rapidly changing reality. This thinking must start with the CEO.” (Wiley, US$30)

LEADERSHIP BS

The idea that successful leaders are driven by integrity and humility is a myth, argues Stanford’s Jeffrey Pfeffer, who paints a more sinister picture of leadership than the authors of the books reviewed above. While books and b-schools tout the positive attributes of leadership, businesses most often reward ambition and self-interest over integrity and honor, Pfeffer argues—often to their own detriment. As examples, he cites not only high-profile leadership disasters that befell the likes of Lehman Brothers and BP, but also stories from the worker ranks. There’s the woman who built a successful analytics team only for her superiors to hand her team to a more cunning senior colleague. Or Pfeffer’s former student whose own mentor orchestrated his removal from the company he had founded. Successful leaders today, says Pfeffer, are self-interested and willing to withhold the truth when it suits them. “If we want to change the world of work and leadership,” he challenges, “we need to act on what we know rather than what we wish and hope for. It is also imperative that we understand why we are stuck where we are.” A provocative view bound to inspire conversation. (HarperCollins, US$29.99)

NEGOTIATING THE NONNEGOTIABLE

Conflict is inevitable—between spouses, between co-workers, between neighboring nations—but it doesn’t have to destroy marriages, workplaces, or international relations. Daniel Shapiro, the founder of the Harvard International Negotiation Program, examines the emotions that charge major disputes and shows that many combatants fight so hard because they believe their very identities are on the line. He calls this the “Tribes Effect,” and he describes workshop exercises he has run that prove how quickly and uncompromisingly people can get attached to the values of their own particular tribes. The good news is that he also has created exercises that help adversaries step back, recognize their emotions, and identify their common goals. As individuals and leaders learn to negotiate, he writes, they can “transform an emotionally charged conflict into an opportunity for mutual benefit.” (Viking, US$28)

A GUIDE TO PUBLISHING FOR ACADEMICS

With the goal of helping junior academics figure out how to write for publication, international journal editor Jay Liebowitz has assembled 15 essays by the editors of business and technical journals. While he notes that it was both thrilling and cathartic to have a chance to assemble “helpful insights, guidance, and best/worst practices” for doctoral students and young scholars, he’s hopeful that some of the ideas offered will be useful to veteran scholars as well. As you would expect from people who edit for a living, the essays are lively, engaging, and to the point. For instance, Arch Woodside of the Journal of Business Research focuses on how to craft the best title to intrigue both editors and readers. Among his suggestions: Focus your title on what your paper can contribute to the theory of your discipline. Use two titles, one quite short—for instance, “The Checklist. If Something So Simple Can Transform Intensive Care, What Else Can It Do?” Come up with three possible titles and ask friends which ones they would rather read. Such common-sense pieces of advice could have far-reaching implications for junior faculty trying to place their first articles. (CRC Press, US$89.95)