Robert Heller reviews the latest business books.
Unleashing the Killer App:
Digital Strategies for Market Dominance
by Larry Downes and Chunka Mui
Harvard Business School Press £16.99
The 'killer app' is the application of new digital technology that creates hugely disruptive, hugely profitable industries. It also kills disrupted companies. This stimulating book is an often startling account of the interaction of two well-known laws. Moore's law says that every 18 months computer power doubles while cost stays constant, and Metcalfe's law says that networks dramatically increase in value with each additional node or user. The authors show how by combining the two even the mightiest industrial groups are downsizing; replacing incremental change with exponential; and imposing a whole new set of managerial imperatives. Today, you 'reshape the landscape': This may mean by cannibalising your markets with abandon to create new ones, treating each customer as a market segment of one, and creating communities of value (internet clubs, say). You build new connections with customers and suppliers, and you 'redefine the interior'.
Thus, assets are becoming liabilities (all those high street banks) and value chains are being destroyed by new methods. To kill rather than be killed, companies must learn new ways to manage innovation ('as a portfolio of options', the authors suggest). They should also 'hire the children'.
This is a young person's and young company's world, which means that older people and companies need to learn these new tricks very fast.
The Open-Book Management Experience: Lessons From Over 100 Companies that Have Transformed Themselves by John Case
Nicholas Brealey £18
Open-book management operates on the following simple principle: 'a company performs best when its people see themselves as partners in the business rather than as hired hands'. As John Case presents it, rather than a philosophy, this is in fact a hard, practical system for running a business. The open-book firm is, according to Case, 'transparent' - a company where everybody knows what's going on financially. It operates on 'joint accountability', whereby every individual is held responsible for their part in corporate performance.
It gives people a 'stake in success' in the form of bonus payments which are linked to performance. The section on bonus design alone is worth the price of a book that never makes the all-too common mistake of claiming panacea status or simply glossing over difficulties. Much training and application are required for key steps such as promulgating critical numbers, methods of devising relevant 'scoreboards' of company performance and approaching improvement projects as competitive games. The effort comes more naturally to small companies than large - which certainly doesn't mean the latter shouldn't try. They should. The book also boasts plenty of excellent, short case studies.
CORPORATE RIP-OFFS AND TIP-OFFS
Fraud at work - frequency, type and methods of detection
HOW OFTEN DO COMPANIES EXPERIENCE FRAUD? % AFFECTED
More than once every six months 25%
Up to once a year 7%
Up to once every two years 17%
Up to once every five years 20%
No material fraud experience 14%
Don't know 17%
Source: Neville Russell.
Given that the largest single category is also the most frequent, it would appear that the kleptomaniac culture is alive and well in the UK workplace, according to a survey by chartered accountants Neville Russell.
Indeed, once you factor in the 'don't knows' and bear in mind that a lot of fraud goes undetected (otherwise why bother), it is clear that British management would do well to keep a closer eye on the stationery cupboard.
FAVOURITE FRAUDS %
Theft of fixed assets 20%
Theft of cash/credit cards 17%
Cheque fraud 16%
False expense claims 13%
Employee corruption (eg bribery) 8%
False accounting 7%
Supplier fraud 6%
Payroll fraud 3%
Source: Neville Russell.
It is perhaps a telling comment on personal ethics that the most common type of fraud is theft of, well, stuff: after all, walking home with a box of biros isn't stealing, is it? And walking home with the Microsoft Office CD down your shorts is only 'sort of theft'. On the other hand, taking cash is definitely theft, as is cheque fraud. Perhaps most surprising is the relatively low incidence of falsified expenses (hardly 'stealing' at all) but then, it must be borne in mind that while falsifying expenses is a doddle, proving that falsification has taken place is much harder.
FRAUDBUSTING METHODS %
Vigilant management 20%
Internal controls 42%
Internal whistleblower 9%
External tip-off 5%
External auditors 2%
Source: Neville Russell.
Not too many surprises here: managers, keep your eyes open and put internal controls in place. The role of chance shouldn't be overlooked, but relying on tip-offs and discrepancies uncovered by the auditors would appear less fruitful. And, finally, while nobody likes a snitch, internal telltales were responsible for reporting one in 11 instances of fraud.
Lateral Leadership: Getting Things Done When Others Are in Charge
by Roger Fisher and Alan Sharp
HarperCollins Business £14.99
The authors of this book mine much the same seam as John O'Keeffe (see below), though with rather less panache and more homely anecdotes and role-play cases. Instead of a triangle, they offer would-be systematic thinkers 'a circle chart with four quadrants'.
You start with 'data', move on to 'diagnosis and direction', and finish with 'do next'. Throw in purpose, learning, and full engagement in a challenging task, offer and ask for feedback, and you become the ideal modern managerial employee - a leader who leads from below. Do that well enough, of course, and you should rise to the top. Self-help truly is the route to self-fulfilment and, as the authors say, 'the easiest conduct to change is your own'.
Business Beyond the Box: Applying Your Mind for Breakthrough Results
by John O'Keeffe
Nicholas Brealey £16.99
John O'Keeffe, a group vice-president with Procter & Gamble, inhabits a decidedly faddish universe.
'The rate of change is now so high that incrementalism will not work'.
To maximise their potential for step-change, individuals and organisations alike must escape from the box of business-as-usual. Hence, this is really two books in one. The much shorter Book A explains the unarguable case for seeking organic growth by dynamic innovation.
Book B is a detailed, lively self-help guide telling managers how to develop 'triangular thinking' by focus on step-change goals, know-how and creative thought. Keeffe must be right. You cannot have creative companies (or creative careers) without creative, thinking managers. That is nowhere near as difficult as it sounds. Organisations do impose mental habits on their members. But drowning in information, acting without thinking and limiting mindsets are no more natural to groups than opposites such as creative thinking, building know-how and going for step-changes. In fact, the bad habits are less natural. So stop them.
Calling a Halt to Mindless Change: A Plea for Commonsense Management
by John Macdonald
The first page names Motorola among a clutch of paragons that 'appeared to anticipate external change long before their competitors'. Right now, Motorola's failure to anticipate the impact of digital technology on mobile phones is costing it very dear. Bad luck or bad timing, you might think, only to discover that an entire book, published in 1998 hinged on downplaying 'the need for radical change', makes not a single mention of the internet.
The new world of the killer app has passed Macdonald by. Rather, fixated on 'evolution, not revolution', he wastes his fire on has-beens such as Management by Objectives. His (vast) experience contributes to plenty of practical and sound advice, which often leaves his central thesis in tatters: 'change ignored or not anticipated can have a devastating effect'.
Quite so. In an age of automation, knowledge work, flexible workplaces and the 'virtual' company, managers face continual challenge and change.
That's no excuse for the 'pseudo-management' that Macdonald scorns. But managers need real guidance through the vortex: mere debunking doesn't help.