Archive for the ‘Book Reviews’ Category

The Importance of Peter F. Drucker

Wednesday, January 9th, 2013 by Troy Schrock

Amidst the plethora of new business writing published each year, it’s easy to lose sight of Peter Drucker’s significant influence.  Known as the “father of modern management,” his writing provides the central themes of much of the current management, marketing, and general business writing.

Marketing guru Philip Kotler states, “…I regard it as a compliment when some people call me the Father of Marketing.  I tell them that if this is the case, then Peter Drucker is the Grandfather of Marketing.”  Jim Collins said at a dinner speech in May 2006 that Drucker had a formative influence on every company he and Jerry Porras profiled in Built to Last.  In the introduction to his most recent book, Go Put Your Strengths to Work, strengths guru Marcus Buckingham notes that many people trace the “strengths movement” back to Drucker, who for years encouraged both individuals and organizations to focus on areas of strength.

Business advisors benefit greatly from a liberal sprinkling of Drucker’s writing in their reading regimen.


Rethinking Hedgehog

Thursday, June 28th, 2012 by Troy Schrock

I recently wrote about Phil Rosenzweig’s book The Halo Effect.  One of the notions he challenges is Jim Collins’s Hedgehog Concept – the discipline of focusing on one thing at which you are a uniquely high performer.  The “Good to Great” companies were Hedgehogs, but Rosenzweig cautions that Hedgehogs end up as roadkill at least as often as they succeed.

The opposite of the Hedgehog is the Fox, jumping about from thing to thing.  Andy Grove, the acclaimed CEO of Intel, is noted for Fox-like thinking.  The technology in his industry was changing way too fast for him to focus on one thing.  He repeatedly led his organization through radical changes, including some where they abandoned the very products that had brought them much success.  Had they not been successful, they would have likely been criticized for not having a Hedgehog Concept.  However, Grove realized that there are appropriate times to be a Fox.

To be clear, I am not suggesting we abandon the Hedgehog Concept, and I don’t think Rosenzweig is, either.  We must find the proper balance between Fox and Hedgehog-type behavior.  Once a strategic direction is established, it’s time to focus on making that work, but prior to that, it’s okay to behave like a Fox.  In fact, that Fox-like behavior may be what keeps you alive if your Hedgehog Concept fails.


The Halo Effect

Thursday, May 31st, 2012 by Troy Schrock

One of the more challenging books I’ve read in recent years is Phil Rosenzweig’s The Halo Effect.  I call it challenging not because it was difficult to read, but because it strongly confronted some assumptions about good business that I have rallied around for a long time.  Starting with the “mother of all business questions” (What leads to high performance?), Rosenzweig strongly criticizes the methods of several well-known business researchers, including Jim Collins (Good to Great, Built to Last).  “This book is…written to help managers think for themselves,”  he writes, “rather than listen to the parade of management experts and consultants and celebrity CEOs, each claiming to have the next new thing.”

Buttressed by his own research, Rosenzweig claims financial results drive our impression of every aspect of a company.  Thus, when a company is performing well, employees love working for the company and speak glowingly of superiors, executives are thought to have brilliant strategy, customer focus is considered top-notch, and so on.  When financial results drop, those same employees change their tune, and those same executives are criticized for their strategic mistakes.

Rosenzweig does not say that Collins and others are wrong; in fact, he concedes that they point us in the right direction.  Yet, he cautions against treating their advice as automatic cause-and-effect formulas.

As much as The Halo Effect challenged me to rethink some things, it also reinforced the importance of disciplined strategy execution.  Writing about Logitech CEO Guerrino de Luca:

De Luca emphasized the importance of execution.  Once strategic choices were made, the focus shifted to getting things done.  “We learned many times,” he said, “modestly defined strategies have given dramatic success through great execution.” …Did Logitech’s CEO think he was following a blueprint for enduring success?  No.  But he made thoughtful decisions about strategic choices – deciding what not to do as much as what to do – followed up with disciplined execution based on clear priorities and explicit measures.  (p. 171-2)

Clear priorities.  Explicit measures.  They may not guarantee success, but they will greatly increase its likelihood.


Great By Choice and Strategy Execution

Thursday, December 8th, 2011 by Troy Schrock

I recently read Great By Choice, the latest book by Jim Collins.  I have enjoyed all of Collins’s previous work, and this one did not disappoint.  As usual, Collins began with a question: “Why do some companies thrive in uncertainty, even chaos, and others do not?”  His thorough research uncovered a short list of simple, but powerful principles that are easy to remember thanks to Collins’s typically vivid labels.  A few examples:

  • 10Xer: an enterprise that, despite particularly turbulent conditions, sustains truly spectacular results relative to the general stock market and its industry (beats them by at least 10 times).
  • 20 Mile March: a clearly-defined performance standard that includes a lower bound (the ambition to achieve) and an upper bound (the self-control to hold back even when it seems easy to exceed the goal).  Conventional wisdom says to accomplish as much as possible when the going is easy, but Collins shares convincing evidence that doing so expends resources that will be sorely needed when the going gets rough.
  • Fire Bullets, Then Cannonballs: Favoring empiricism as the foundation for decisive action, 10Xers first fire bullets (low cost, low risk, low distraction) to figure out what will work.  Once the bullets consistently find the target, they fire a cannonball (the full resources of the organization).
  • Return on Luck: the measure of an organization’s ability to glean value from any circumstance.  Do you measure Return on Luck? 

Collins’s research also busts a few commonly-held myths about what makes a great company: Boldness, risk taking, and ability to predict the future are not distinguishing factors of the greatest companies.

  • 10X companies are not more innovative than their counterparts.  (Sometimes, they are less innovative.)
  • Speed is not the key to navigating threats.
  • Change is not always good (in fact, it should be rare).
  • Good luck does not explain 10X success.

Overall, what struck me most in Great By Choice was the relentless focus on strategic process and execution.  The 10Xers didn’t know what was coming, but regardless, they took full responsibility for their own fate.  (They “reject the idea that forces outside their control will determine their results,” Collins writes.)  So what did they do?  They started with values, purpose, long-term goals, and high performance standards, then applied a “fanatic discipline” to adhere to them.  It was their effective action (i.e., strategy execution) that separated them from the pack.

As we enter a new year, you and your organization have an opportunity to choose to be great.  Do you have a disciplined strategy execution process in place to help you get there?