Bookshelf | May / June 2019

View a selection of reviewed books from the May/June 2019 print issue.
The Efficiency Paradox


Efficiency is “self-evidently desirable, even wonderful, until it isn’t,” declares Edward Tenner of the Smithsonian’s Lemelson Center for the Study of Invention and Innovation. And as today’s humans pursue electronic efficiency, Tenner foresees problems arising from seven unintended consequences. For instance, in a world where algorithms recommend the most efficient actions, the risk is counterserendipity, which deprives us of “the benefits of occasional randomization and of productive mistakes.” Another worry is that people will suffer skill erosion if they leave all the work to the machines. If the doctor, airline pilot, or motorist can no longer operate, fly, or drive—and if the robotic partner fails—“the result can be catastrophic.” Tenner proposes strategies for blending mechanical precision with human intuition in areas that range from education to medicine to online search. While it’s clear Tenner admires the machines, it’s also clear he’s rooting for the humans. (Vintage Books, US$16.95)




The book’s provocative title leads to equally provocative answers from Tomas Chamorro-Premuzic of University College London and Columbia University. More men than women are narcissists and psychopaths who exude confidence and charisma; while we often associate confidence and charisma with leadership abilities, scientific evidence disputes the correlation. “When men are considered for leadership positions, the same traits that predict their downfall are commonly mistaken—even celebrated—as a sign of leadership potential or talent. Consequently, men’s character flaws help them emerge as leaders,” Chamorro-Premuzic writes. Ambitious women are often told to behave more like arrogant men, but Chamorro-Premuzic believes that’s bad advice. “We should not lower our standards when we select women, but we should raise them when we select men,” he says. He cites extensive research on gender and leadership as he examines both what makes a good leader and what characteristics men and women generally bring to the boardroom. His conclusion is that we don’t need fewer barriers for qualified women, but more “career obstacles for incompetent men.” It’s a timely and fascinating examination of leadership. (Harvard Business Review Press, US$25)



How Could This Happen?HOW COULD THIS HAPPEN?

In this collection of essays edited by ESMT’s Jan Hagen, the emerging field of error management is explored by 24 contributors from diverse fields such as disaster medicine, space exploration, and cognitive psychology. For example, Amy Edmondson of Harvard and Paul Verdin of the Solvay Brussels School of Economics and Management advocate for a “strategy-as-learning” approach, designed to facilitate innovation in a volatile world. In their view, errors are “not so much deviations from the plan to be corrected as they are sources of data and information.” NASA’s Immanuel Barshi and Nadine Bienefeld of ETH Zurich examine the reasons people fail to speak up when they know they should—for instance, because they fear offending a superior or being perceived negatively. Hagen believes that if companies want to manage errors constructively, they should minimize the emotional turmoil. “This means no blame and no sanctions for the one who makes the mistake.” It’s a multisided view of a complicated issue. (Palgrave Macmillan, US$29.99)




How can leaders avoid making catastrophic decisions? asks Pawel Motyl, consultant and former CEO of Harvard Business Review Polska. He deconstructs examples of both terrible decisions (such as those that led to the fall of Enron) and brilliant ones (those that saved the Apollo 13 crew). In three specific situations—when they follow a charismatic leader, conform to existing norms, or refuse to abandon sunk costs—people make the worst decisions of all, because they ignore warning signs and stick with what seems familiar or safe. Motyl argues that any time leaders are faced with difficult situations, they should bring in as many perspectives as possible—particularly dissenting ones—to analyze the evidence from all angles. “If you find yourself surrounded by competent, professional, experienced people, but you find them awkward to talk to,” he writes, “they may be your best bet when it comes to making decisions.” (Page Two Books, US$21.95)



Jump-starting AmericaJUMP-STARTING AMERICA

American innovation helped win World War II and usher in decades of prosperity as inventions in everything from atomic energy to the internet provided jobs and raised the standard of living for many Americans. That innovation boom was largely fueled by deliberate partnerships among the private sector, federal government, and universities, say MIT professors Jonathan Gruber and Simon Johnson. But the authors are troubled by a particular trend: As federal funding for science and exploration started dropping in the late ’60s, the U.S. began lagging behind in innovation, and many middle-class jobs disappeared. Meanwhile, countries such as Denmark, Canada, and China began pouring more resources into backing the next big breakthroughs, which the authors speculate could come in fields such as synthetic biology, hydrogen power, or ocean mining. Gruber and Johnson call for a major new public-private push that invests heavily in “the underlying science of computing, human health, [and] clean energy.” Just as important, they advocate for ways to broadly distribute the gains of such investment, as opposed to concentrating it in the hands of a wealthy few. It’s a well-argued and powerful paean to innovation. (Public Affairs, US$28)





Handling the finances for a startup is nothing like overseeing the finances for a corporation, note Luisa Alemany of ESADE and Job Andreoli of Nyenrode Business University. "In corporate finance, we assume that projects or investments will have a positive net present value," they write. "In entrepreneurial finance, losses are part of the game." Furthermore, corporations attract investors who make choices based on rational considerations; startups draw investors willing to make huge gambles because they feel passionate about the possibilities of a new product. This is only one of the ideas presented in this comprehensive look at the emerging field of entrepreneurial finance. Alemany and Andreoli are joined by more than 20 other contributors who address the topic from an explicitly European point of view. In addition to exploring the alternative sources of financing available to startups, the book looks at how entrepreneurs source their deals and construct business plans, how they manage growth, and how they exit their ventures. It's filled with clear explanations, short case studies, and a wealth of knowledge about this growing field. (Cambridge University Press, US$48)




Can business leaders do well by doing good? In this sprawling examination of a certain kind of visionary, James O’Toole of the University of Southern California reminds us that the question has been asked ever since mill owner Robert Owen tried to create a model community in Scotland in the 1800s. O’Toole looks at early reformers like Owen, J.C. Penney, and Levi Strauss before turning to the modern evangelists of conscious capitalism such as Herb Kelleher and Anita Roddick. “To the extent that I have heroes, they are mine,” he writes. Alas, they rarely fare well—some lose their fortunes, while others sell out to corporate conglomerates focused more on shareholder value than social good. Does that mean do-gooder capitalism is pointless? O’Toole admits his head and his heart give different answers. He’s encouraged by some current trends, such as an upcoming generation of committed leaders and a change in investors’ attitudes, but he’s still worried. He concludes, “Without doubt, it is extremely difficult for business leaders to do good; but that fact is no excuse for not trying to do so.” (HarperBusiness, US$35)




The complex, tangled history of globalization is thoughtfully explored in this book by Colin Crouch of the University of Warwick. While he clearly favors globalization, he doesn’t shy away from acknowledging its associated pain points. For instance, it can lead to loss of employment when jobs flow to markets with lower labor costs or are filled by immigrants. But he points out that factors unrelated to globalization—such as automation and the rise in working women—have also contributed to job loss, while the influx of immigrants has brought benefits such as innovation, diversity, and an expanded consumer base. Similarly, he challenges the notion that “if only globalization had not taken place…traditional industries would have remained at the size they were in the 1980s.” Without globalization, he argues, countries would not have benefited from exports to developing economies, so industries would have suffered anyway. Ultimately, he believes “it would be disastrous if the new nationalism spreading across the world were to succeed in reversing globalization,” and he calls for “moderate forces of left and right to stand together for a regulated globalization against xenophobic forces.” (Polity Press, $59.95)




Algorithms already control everything from the software in our smart devices to the artificial intelligence in large manufacturing plants. Today’s CEOs must understand how to operate in such an interconnected and digitally driven world, writes futurist Mike Walsh of consulting company Tomorrow. He says, “You need to be a connector, not a controller. You are an integral part of a root system that has no center or edge and that relies on you to feed it nutrients and expand its connections.” As machines take on more jobs, he says, we will still “need real-life humans … who know how to best orchestrate the capabilities of machines that are smarter than us.” CEOs can transform themselves into algorithmic leaders by following ten principles—such as embracing uncertainty, thinking computationally, and solving for purpose. Walsh remains hopeful about the future, predicting that only humans will be able to use machine intelligence to “create experiences, transform organizations, and reinvent the world.” (Page Two Books, US$25)