bookpagedev

Management and Murphy’s Law Anyone who has ever read Paradise Lost knows that things gone wrong make for catchier story lines than things going right. That’s why Milton’s Satan is a more memorable character than any of the good guys in his epic. Four of this month’s notable business books offer entertaining and edifying stories of failure and, in the process, they triumph over Milton’s malady and offer roadmaps to success.

In When Giants Stumble, business historian Robert Sobel reviews the past century in American business to bring us the sad stories of companies long forgotten (discount retailer E.

J. Korvette, auto maker Kaiser-Frazer and others), and of institutions that have been wounded but are still with us (the New York Stock Exchange, Schlitz and Pabst beers).

Sobel categorizes the giant blunders of these titans into a list of 15 deadly sins of corporate leadership. They range from the Blunders of Hubris, Ignorance, Nepotism, and Nonstrategic Expansion to the Blunders of Cutting Corners, Standing Pat, Isolation, and Dependency.

The author has a gift for teasing out lessons from disasters that might otherwise seem like ancient history. From pioneering Osborne Computer Corp., we learn that a company can get it all right predicting accurately that IBM-compatibility and laptop portability would become desirable features in PCs and still get it all wrong. Osborne built bug-ridden products, alienated strategic partners such as distributors, and died unmourned in 1982, before the PC revolution had taken off. The Blunder of Ineptitude, Sobel calls it.

And from Packard Motor Car Co., we learn that squandering the intangible value of a brand name can kill even a long-established company. In 1928 there was nothing on the road more stylish and status-laden than a Packard. By 1948, after misguided efforts to sell more cars to the masses, Packard was just another mid-range make, and by 1958 the company was history. Sobel labels this error the Blunder of Downward Brand Extension.

It’s impossible not to feel for these stumbling giants. Visionary entrepreneurs like James Ling of LTV Corp. and industrial dynasties like the Schwinn family of bicycle makers may have nobody to blame but themselves for what happened to their enterprises, but there is still a tragic dimension to the amount of heart and soul invested in ultimate failure.

Sobel writes with empathy for the blunderers. He could have turned out an interesting but facile book by merely narrating what went wrong at these companies. Instead he has produced a truly valuable study by analyzing why each lousy decision seemed like the right thing to do at the time.

A question you’ll keep asking yourself as you read Sobel’s book serves as the title for a volume from product development expert Robert M. McMath What Were They Thinking? Money-Saving, Time-Saving, Face-Saving Lessons You Can Learn from Products That Flopped, just released in paperback (with Thom Forbes; Random House, $13, 081293203X). McMath distills his four decades of new-product observations into a textbook on bad ideas. The Milton principle holds true once more: McMath’s vivid prose brings marketing failures to life as though they were characters in a novel.

If you had the misfortune of oily hair, would you advertise that fact in the supermarket by purchasing Gillette’s For Oily Hair Only shampoo? Have you felt the need lately to buy a 48-ounce jug of Maxwell House Brewed Coffee, so you can just pour a cup and microwave it? These what-were-they-thinking hall-of-famers have taken their places in the gallery of dead products that McMath has been collecting for nearly 30 years. He has 80,000 now, and the collection keeps growing as more than 25,000 new consumable items hit the shelves in the U.

S. every year most doomed to quick extinction.

Like Sobel, though, McMath is not content merely to chronicle failure. His book is full of nuggets of wisdom. He shows us, for instance, that an errant concept is not always a dead end. What was Kimberly-Clark thinking when it saw Kleenex’s main purpose as removing cold cream? No telling, but give the company credit for shifting its marketing plans when consumers decided to use Kleenex as disposable hankies. With instructive examples like these and opinionated but astute analysis, McMath has produced a marketing bible likely to enjoy a long shelf life.

What were they thinking when they gave such a cumbersome title to one of the year’s most memorable business books? If You Want to Make God Really Laugh, Show Him Your Business Plan (Amacom, $22.95, 0814404987) is a combination of stand-up comedy and dead-serious business sense from former Burger King CEO Barry J. Gibbons. Get past the title, and you’re in for the funniest biz read since Jerry Della Femina’s From Those Wonderful Folks Who Gave You Pearl Harbor (Simon ∧ Schuster, 1970, out of print).

Interspersed with the author’s zany asides are his 101 Universal Laws of Business, a set of precepts illustrated by episodes from a career spent managing large operations on both sides of the Atlantic and watching business plan scenarios turn to dust. Both the humor and the rules project an insider tone, as though Gibbons were addressing a closed-door gathering of fellow corporate chieftains on a golfing retreat. Gibbons is frank about his own failures as a manager.

He has clearly learned from those shortcomings, developing a refreshingly humane vision of management in the process. Imagine if his universal law of motivation caught on nationwide: Pay people till their eyes water, share with them the value they add, trust them, and avoid doing dumb things that demotivate them. Plenty of bosses would view such notions as heresy. That’s why there’s still so much misery today in our supposedly enlightened workplaces.

For a guy who admits to being rich and satisfied with himself, Barry Gibbons displays a surprising humility in this book. I don’t think he would claim it as a virtue to be humble about leading an organization; I think he’d say it’s a necessity, given the certainty that the CEO will embarrass himself or herself at some point. And when that moment comes, he or she had better be able to laugh about it.

In Right from the Start: Taking Charge in a New Leadership Role (Harvard Business School Press, $24.95, 0875847501), consultant Dan Ciampa and Harvard professor Michael Watkins have plenty to say about what can go wrong from the start. They, too, are doing a Milton, focusing the minds of aspiring executive readers by presenting examples of disasters in the careers of people just like them.

People don’t often talk on the record about why they got fired. But they do in this book (anonymously), as do many who have endured lesser career reversals and emerged from them as stronger leaders. This valuable guide to surviving at the top draws on interviews with dozens of high-level executives in business, government, and academia. Ciampa and Watkins let these managers speak for themselves in lengthy quotes that provide enough context to understand each element of leadership under discussion from securing early wins in the first weeks on the job to building coalitions and projecting self-image.

The interviewees speak with a candor rarely if ever found in statements to the press from members of the corporate elite. Equally valuable, though, are the authors’ analyses of the myriad threats sure to beset the new EVP or CEO. It’s no good for the newcomer to rail about office politics, communication gaps, or institutionalized barriers to change in the workforce. The leader needs to understand why these challenges arise, and what elements of his or her own style may be making them worse, in order to overcome them. This book can help the recently promoted cope with those frightening career moments that arise as soon as you get what you’re after.

Briefly noted: two July books try to get inside the heads of employees and employers. Workplace psychologist Leonard Felder’s well-received 1993 book Does Someone at Work Treat You Badly? is out in a new paperback edition (Berkley, $13, 0425165124). Felder retells the traumas endured by his counseling clients at the hands of schemers, screamers, sexual harassers, and other walking job hazards and tells of the techniques that helped victims gain the upper hand. New from British business psychologist Sandi Mann is Hiding What We Feel, Faking What We Don’t: Understanding the Role of Your Emotions at Work (Element, $16.95, 1862044643), which explores why we all wear happy, hostile, caring, or uncaring masks at work from time to time.

Also of note this month: William F. Joyce’s MegaChange: How Today’s Leading Companies Have Transformed Their Workforces (Free Press, $28, 0684856255), a manifesto for a management theory based on assumptions of human capability instead of human limitations. And, from Hollywood biographer Bob Thomas, Building a Company: Roy O. Disney and the Creation of an Entertainment Empire (Hyperion, $14.95, 0786884169) tells the story of the other Disney, Walt’s brother.

Nashville journalist E. Thomas Wood is the author of Karski: How One Man Tried to Stop the Holocaust (Wiley).

The psychology of money and work Twenty years ago, personal finance writer Andrew Tobias produced a best-selling book with a boastful title. It was called The Only Investment Guide You’ll Ever Need. Rather than scare away the competition with that all-encompassing name, the book’s huge success may have helped spark what’s become a growth industry unto itself: the avalanche of books intended to provide care and feeding to the emboldened individual investor. In 1978, very few people actively controlled their own investments, from automated payroll savings to retirement accounts. In 1978, there was no CNBC, no Internet stock trading, not even any Internet stocks to trade. In 1978, the mutual fund industry was a fraction of its current size. Given the enormous change that’s engulfed the world of personal finance, Mr. Tobias decided it was time to return to his original theme. So we have The Only Investment Guide You’ll Ever Need: Expanded and Updated Throughout (Harvest Books, $13, 0156005603). As for the compelling title, Mr. Tobias says it was his publisher’s idea, and he agreed in a weak moment. He notes that there are other good investment guides around (and many poor ones), but accurately adds: . . . reading three good investment guides instead of one will surely not triple, and probably not even improve, your investment results. So how does Mr. Tobias’s one-stop shopping site for investors hold up? Quite well. The author is a knowledgeable guide and a gifted writer. The book is a pleasure to read, which is important since so many people regard reading about investment options as an unpleasant if important chore. He covers most of the waterfront, and he is forthright in his opinions. For example, he doesn’t think much of investing in commodities or gold. On commodities, he writes: It is a fact that 90% or more of the people who play the commodities game get burned. I submit that you have now read all that you need ever read about commodities. On gold he offers, Gold itself pays no interest and costs money to insure. It is a hedge against inflation, all right, and a handy way to buy passage to Liechtenstein, or wherever it is we’re all supposed to flee to when the much ballyhooed collapse finally materializes. But if you’re looking for an inflation hedge, you might do better with stocks or real estate. Mr. Tobias is particularly strong in an area many people wouldn’t consider the province of an investment guide: frugality. Simply stated, spending less of your income is a great savings and investment strategy. Given effective tax rates, keeping an after-tax dollar in your pocket rather than in some merchant’s cash register is probably the equivalent of going out and earning two dollars before taxes. The author advises buying in bulk and hard bargaining on big purchases. He takes the reader through the pros and cons of most investment options in an engaging, common sense manner.

Every investor is different, of course. Mr. Tobias, for one, describes himself as rather chickenhearted. People should take on levels of risk that are not only appropriate for their income, goals, and stage of life, but also in line with their psychological ability to withstand risk. In other words, you want your investments to allow you to sleep at night.

Despite our differences, there are some psychological foibles most of us share when it comes to thinking about money. That’s the subject of a fascinating new book, Why Smart People Make Big Money Mistakes and How to Correct Them (Simon ∧ Schuster, $23, 0684844931) by Gary Belsky and Thomas Gilovich. The authors (Belsky is a journalist who wrote for Money magazine for seven years; Gilovich is a professor of psychology at Cornell University) take us into the world of psychoeconomic theory, which explains how widespread human behavior patterns have an adverse impact on our pocketbooks.

Take the concept of mental accounting, which deals with how we categorize money and treat it differently depending on its source. For example, we more easily fritter away money that was won at the racetrack the night before than we would rashly spend the contents of our hard-earned paychecks. Like other ideas of psychoeconomic theory, the various aspects of mental accounting are presented here through hypothetical scenarios in which readers can participate. This fun approach makes the issues at hand easy to identify with and clear. The bottom line solution to the mental accounting problem is this: Make sure you treat each dollar in your possession equally, no matter whence it came. This popularization of the work of psychologists hits on many interesting issues, including the fact that losses hurt more than gains please. That makes a lot of people more risk averse in their investment decisions than rational investigation would likely lead them to be. And then there’s the sobering fact that most of us are not as smart or as savvy as we imagine. The authors write: . . . for almost as long as psychologists have been exploring human nature, they have been amassing evidence that people tend to overestimate their own abilities, knowledge, and skills . . . in financial matters the tendency to place too much stock in what you know, or what you think you know, can cost you dearly. For most of these interesting tendencies, knowledge that they exist can help you fight them. The authors of this well-researched and clearly written book also offer specific remedies for the financial aspects of these psychological peccadilloes.

Psychology doesn’t abandon us once we put away the bills or monthly investment statements; it accompanies us to work (and everywhere else, for that matter). The ability to cooperate, collaborate, and even inspire our colleagues is a crucial factor in our own personal success as well as in the prosperity of our employer. In 1995, Daniel Goleman wrote a bestseller called Emotional Intelligence, which challenged the dominance of the IQ in measuring smarts. Now he’s taken those concepts to work in Working with Emotional Intelligence (Audio Renaissance, abridged, $16.95, 1559275154; unabridged, $39.95, 1559275162). Goleman received a doctorate from Harvard University and spent a dozen years covering behavioral and brain sciences for the New York Times. His essential message is an upbeat one: Those qualities that in an earlier time might have been labeled character or made one considered a good person are also the qualities that should help us get ahead at work.

There’s more good news. Your fate isn’t determined by some stagnant measure of your intelligence; you can improve on your emotional intelligence at any stage of life. In today’s work world, hierarchies have been flattened and the success of team work often depends on people’s ability to get along. Emotional intelligence has never been more important.

In readable detail, based on research and corporate profiles, Goleman lays out the personal competencies of emotional intelligence, which include self-awareness, self-regulation, and motivation, as well as social competencies, such as empathy and social skills. (Each category has more specific sub-categories.) This is an important and helpful book.

The changes in the American workplace in the past couple of decades haven’t all taken place within our heads. One seismic change has been the vastly expanded role of women in the work force, both in terms of number and influence. That change is the subject of Powerchicks: How Women Will Dominate America (Longstreet, $22, 1563525216) by Matt Towery. For a book about the growing strength of women in business, entertainment, and politics, as well as their dominant place as consumers and voters, the title strikes one as a tad irreverent. Mr. Towery, a former Georgia state legislator, says, however, that many influential women have willingly and proudly accepted the new term. As for why a man wrote this book, the author cites an old newspaper adage, to wit, You don’t have to die to be qualified to write obituaries. Mr. Towery has produced a glowing testament to women in a host of industries who have made it to the top or near top. Through numerous interviews, they tell of their motivations and of obstacles overcome. Among the many interesting points made are that corporate inflexibility might partly be behind the surge in female entrepreneurship and the description of a social phenomena he calls the female bachelor. This describes high-income, high-status single women with lots of disposable income who don’t feel pressured to marry.

Neal Lipschutz is managing editor of Dow Jones News Service.