Source: The Economist
We launch a quarterly review of business books by considering six of the best
THERE are few divisions of the book industry with a worse reputation than business publishing.
Hundreds if not thousands of business books come out every year, all with glowing press releases and effervescent puffs. Literary editors tend to consign them straight to the bin.
This is understandable. An astonishing number are worthless. Celebrity CEOs blow their trumpets, consultants market miracle cures, self-help gurus promise that you can grow rich by working four hours a week. Wait a few months: the CEOs have been caught with their hands in the till, the miracle cures are poisons, the self-help gurus bankrupt. What remains is a tangle of jargon-ridden prose.
Understandable but wrong. It is silly to dismiss a whole genre just because so many business books are bad. There are some excellent titles in among the dross: CEO biographies that capture something essential about business, useful prescriptions for restoring companies to health, even self-help books that help make sense of the contradictory pressures of modern corporate life. The average employed person in the West spends more waking time in the office than at home, so it makes no sense to be so dismissive of writers who focus on such an important activity.
The best books provide an insight into how business revolutionises the world. Why is the centre of growth shifting from the developed to the developing countries? Why do some companies succeed and others fail? Why are we swapping the white collar for the no-collar workplace? Why do managers say the astonishing things that they say? The answers to these questions lie in the business books that many literary editors so casually toss out.
Some business writers pass Karl Marx’s test of changing the world as well as interpreting it.
Peter Drucker’s 1946 classic, “Concept of the Corporation”, made people think of companies as communities rather than just productive units.
“The Machine That Changed the World” (1990) by James Womack et al popularised Toyota’s manufacturing system with its emphasis on just-in-time parts and proactive workers. Michael Hammer and James Champy’s “Reengineering the Corporation” (1993) encouraged companies to sack large numbers of workers even as their profits soared.
This week The Economist launches a quarterly review which will highlight a selection of new business books. To introduce this feature we re-examine six classics published over the past half-century or so that illustrate the wide variety of books that march under the banner of business. They also show how the best books help both to shape the business world and to make sense of it.
Henry Ford is rightly credited with inventing the assembly line—and with it mass production. But it was his great rival at General Motors (GM), Alfred Sloan, who really invented modern professional management. Sloan organised his company into divisions that specialised in cars “for every purse and purpose” and he fashioned a managerial class that turned GM into the world’s biggest company. His 1964 book, My Years with General Motors, is a cool explanation of how he did it (“management has been my specialisation,” he wrote flatly). It is a book that puts subsequent business autobiographies to shame.
William Whyte’s The Organisation Man (1956) is business journalism at its best, taking us inside the daily life of the giant corporations that dominated American capitalism during its heyday.
Organisation men were conformists to their fingertips. They eschewed creativity in pursuit of pleasing their bosses, hitting the numbers and creating what Sloan called “objective organisations” as distinct from those that “get lost in the subjectivity of personalities”. Later authors, such as Richard Florida, have tried to examine the demise of “organisation man” and the rise of the creative class, but nobody matches Whyte’s ability to mix detailed anecdotes with broad generalisations.
Drucker was the doyen of management gurus—a man who kept up a stream of insightful commentary on business from the 1940s until his death in 2005.
Picking his best book is not easy; the inelegantly titled Management: Tasks, Responsibilities, Practices (1973) is as good an example as you can get. Drucker explains why “management may be the most important innovation of the 20th century”. He traces broad revolutions such as the rise of knowledge workers and the development of voluntary organisations, boosting his argument with stories about the growth of the East India Company and the development of Japanese art.
In Search of Excellence by two McKinsey alumni, Tom Peters and Robert Waterman, was the first business blockbuster, selling millions of copies and demonstrating that consultants could talk to a general as well as a business audience. Many of the companies they profiled performed badly in subsequent years and the book has been heavily criticised since it came out in 1982. But it was a powerful attack on the rationalist school of management which saw workers as mere numbers, and it provided a compelling portrait of how companies work.
Clayton Christensen’s The Innovator’s Dilemma (1997) introduced one of the most influential modern business ideas—disruptive innovation—and proved that high academic theory need not be a disadvantage in a book aimed at the general reader. Mr Christensen showed that great companies can fail despite doing everything right: even as they listen to their customers and invest heavily in their most productive technologies, their markets can be destroyed by radical new technologies.
C.K. Prahalad’s The Fortune at the Bottom of the Pyramid (2004) unleashed a business revolution that has done far more good than any number of “Live Aid” concerts. Using a wealth of vivid examples, from Indian eye clinics to Mexican cement companies, Prahalad made three powerful points: that consumers who live on less than $2 a day collectively represent billions of dollars-worth of demand, that together they will account for much of the growth in global demand in the future, and that companies that want to reach these markets need to start early and rethink their assumptions about design and distribution. Prahalad, who died last year, is one of the writers who is most admired by developing-world entrepreneurs, from Muhammad Yunus, who founded Grameen Bank in Bangladesh, to James Mwangi, CEO of Kenya’s Equity Bank.
Companies and consultancies will buy thousands of books to flatter their CEOs or market their latest “breakthrough” ideas. The temptation for publishers to churn out rubbish should be resisted. Business is going through a particularly fascinating phase, as new technologies disrupt long-established business models, new economic giants shift the balance of economic power and new gurus, many of them from emerging markets, reinterpret the landscape. The need to separate the wheat from the chaff has never been greater.