Tag Archives for " Management "

June 12, 2014

The Lean Startup—an indispensable guide for entrepreneurs

Lean StartupThe Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses, by Eric Ries

@@@@ (4 out of 5)

Bloomberg reports that 8 out of 10 new businesses fail within the first 18 months — and most big, established companies have trouble generating truly innovative new products. So, the process of introducing innovation to the market is pretty much hit or miss, whether the engine is a startup or a Fortune 100 company.

Eric Ries wants to take the guesswork out of innovation. His method, featured in his seminal 2011 book, The Lean Startup, and in his website and consulting practice, is built around a technique well known to direct marketers: the A/B split test. In marketing, a mailer will test two variations of a mailing package, an offer or suggested gift, or two market segments, keeping all other variables constant. If the rules of statistics are carefully observed, the result, favoring either A or B, will in theory be replicable when mailing in larger quantities. Ries applies this approach, which he calls “experimenting,” in what appears to be a loosey-goosey fashion. (At one point in his book, he clearly implies that the tests he runs, comparing product features, market segments, positioning, or other testable elements, are less than statistically rigorous. Somehow, though, the companies he’s helped to start or advised seem to have made a lot of money with this approach, so he must be doing something right.)

In fairness, Ries’ Lean Startup method involves a great deal more than testing. He advocates a complete rethinking of the way business is organized and managed and the ways it collects and interprets data. Small, cross-functional teams formed to build and sell innovative products use testing on “small batches” of prospective customers to determine which tweaks on the product or its marketing will optimize sales — or whether the product itself or its use must be entirely re-thought. Systematic testing produces “validated learning” that enables each team to avoid waste such as the hundreds of work-hours that might be involved in producing a finished product by instead testing a “Minimum Viable Product” that will only be finished on the basis of repeated testing. In other words, Ries maps out his own route to the “learning organization” described by Peter Senge in his own seminal book, The Fifth Discipline, more than two decades ago.

Ries’ cross-functional teams are not modeled on the “skunk works” familiar to students of business history. Unlike the original unit of Lockheed that was sequestered in a secret location to design aircraft such as the U-2 spy plane and the F-22 Raptor, the cross-functional teams in a startup company — or themselves constituted as “startups” within a big business — are neither secretive nor elitist. What they have in common with Lockheed’s Skunk Works is independence, as they’re empowered to make all decisions on their own without consulting management.

The core concept behind the Lean Startup approach is that a newly launched enterprise exists only “to learn how to build a sustainable business. This learning can be validated scientifically by running frequent experiments [i.e., tests] that allow entrepreneurs to test each element of their vision. . . The fundamental activity of a startup is to turn ideas into products, measure how customers respond, and then learn whether to pivot or persevere.” A pivot, in Ries’ lexicon, is a shift of course away from the entrepreneur’s original vision — for example, deciding that a company’s core strengths can be more productively and profitably employed in a business-to-business enterprise rather than marketing directly to consumers.

The Lean Startup (the book) is, in a fundamental sense, an introductory guide to Ries’ thinking. However, his prescriptions are often vague — for instance, he writes about the importance of testing in “small batches” but never specifies how small, which is a significant question in statistics — so a real-world entrepreneur would be hard-pressed to apply this method without help. That, it appears, is the function of the many meetups, blogs, online communities, and a wiki that have sprung up around the world for entrepreneurs to share their experiences with the Lean Startup approach. Of course, if you can afford him, you may be able to hire Eric Ries himself.

Ries draws much of his inspiration from the Japanese Lean Manufacturing method pioneered at Toyota — if anything, the “secret” of Toyota’s successful rise from a small company to the world’s largest automobile manufacturer. He has also read widely in the management literature, delving into the work of Frederick Winslow Taylor (The Principles of Scientific Management), W. Edwards Deming (quality control), Alfred Sloan (My Years with General Motors), and Peter Drucker (The Practice of Management) as well as contemporary writers such as Steve Blank (customer development) and Clayton Christensen (The Innovator’s Dilemma). 

The Lean Startup is strong on content but weak on presentation. The author appears to be too much in love with his own jargon — there seem to be dozens of proprietary words and phrases he repeats over and over — and his writing style is less than compelling. He even makes occasional grammatical errors. Nonetheless, I recommend this book to anyone who is starting, or even thinking of starting, a new business. The Lean Startup contains a great deal of wisdom.


The problem-solvers who won World War II

problem-solversEngineers of Victory: The Problem-Solvers Who Turned the Tide in the Second World War, by Paul Kennedy

@@@@@ (5 out of 5)

What use is history?

This question has been kicked around for centuries, but I’m not certain that those who venture opinions about it have bothered to ask a follow-up question: What do you mean by history?

Most of what we’re force-fed in school — even, all too often, in university courses — consists primarily of a recitation of “facts” (dates, names, events, trends). To make matters worse, those facts typically revolve around the reigns of kings and the battles they fought. That sort of “history” is not only boring, it’s essentially useless.

To be truly useful, I believe, a work of history must be informed with deep knowledge of a particular event or period of time and include some judicious analysis of what’s most important about it, so I can understand why things happened as they did — and cull lessons from the experience that will help me make more intelligent judgments in the future.

Engineers of Victory, Paul Kennedy‘s penetrating study of what mattered most in World War II, is precisely that sort of book.

Why and how did the Allies win World War II?

Unlike the superb story-telling about the war in Rick Atkinson‘s brilliant trilogy and other books that bring the period back to life but offer few if any judgments, Kennedy’s work — in a single volume, after all — sifts through the accumulated evidence in official records and memoirs and the opinions of other leading historians to arrive at conclusions about why and how the Allies really won the war. It’s fascinating — and, in the end, it’s useful, because there are lessons to be learned about management and leadership that can be applied in so many other spheres of work as well as military planning.

Kennedy focuses on the period from the beginning of 1943 until the middle of 1944, during which the Allies turned the tide in the war and set a course for victory. He explains what happened then, and why, concentrating on five strategic campaigns: the Allies’ desperate and protracted effort to clear the North Atlantic of German submarines; the Russians’ monumental resistance to the Nazi invasion (occupying three-quarters of Germany’s troops); the war in the air in both Europe and the Pacific; the Allies frequent use of amphibious landings in both theaters; and the strategy employed both in Russia and the Pacific to take advantage of German and Japanese overextension.

Some of Kennedy’s judgments challenge the conventional wisdom about the conduct of the war:

  • For example, was the breaking of the Germans’ Enigma code the “secret weapon” that won the war, as so much popular historical writing has suggested in recent years? No way! The Ultra project, as the Allies called it, made a valuable contribution by eavesdropping on the German general staff, especially in the late stages of the war, but it was far from decisive.
  • Was the US and British strategic bombing of Germany’s cities the key to victory? Not at all. In fact, Kennedy and many others, including some senior commanders in the air war, judged the strategic bombing an utter failure.
  • Did General Douglas MacArthur win the war in the Pacific? No. While MacArthur’s drive from the far south to the Philippines and points north chewed up enormous numbers of Japanese troops, the winning strategy of the US rested more squarely on Admiral Chester Nimitz, driving from Hawaii to capture Japan’s island outposts and provide a platform for the B-29 bombers to attack the Japanese homeland.
  • Was the American entry into the war in Europe the decisive factor in the Allies’ victory, as so many of my countrymen seem to think? Perhaps not. The war in Europe was won on the plains of European Russia and in the North Atlantic sea lanes, Paul Kennedy suggests. Clearly, the phenomenal output weapons and ammunition by US factories and the addition of millions of American soldiers to the front lines were strategic factors. But it was Soviet Russia who ultimately won the ground war against Hitler and the US and Britain together who won the war on the seas and in the air.

However, digging a little deeper, the true cause of the loss of the war by the Axis (principally Germany and Japan) was their territorial overextension — in other words, they bit off more than they could chew. Hitler’s thrust so deeply into Russia was ultimately the death knell for the Nazi regime, as was the Japanese militarists’ foolish expansion throughout China and in South Asia as far as the borders of India. Neither country possessed the resources to defend all that territory.

Another clearly significant factor was micromanagement of the war from Berlin and Tokyo by Hitler and Japan’s Imperial War Cabinet. Again and again, decisions made by those at the top — based on rigid ideology or flaring tempers — hindered the Axis generals’ management of the war at the front. (While Churchill constantly intervened in military decision-making, he proved to be a supremely talented strategist and was usually proved right. Roosevelt trusted his generals and admirals.)

So, who was it who really won the war?

The thesis of Engineers of Victory is that subordinate officers were the ultimate architects of their militaries’ successes. These were the men whose brilliant inventions of new weaponry, detection technology, or organizational design accounted for the breakthroughs in the field:

  • The test pilot who insisted on installing the newest and most powerful Rolls-Royce engine in the poorly performing P-51 Mustang fighter plane, eventually bringing it into service on the front and delivering a devastating blow to the Luftwaffe.
  • The major general whose seemingly whimsical inventions to turn his tanks into mine-sweepers helped make possible the Allies breakthrough from the Normandy beaches.
  • The admiral who persuaded FDR to allow him to establish the Construction Battalions (CBs or SeeBees) within the US Navy, a force that played such a critical role in the Allies’ many amphibious landings, including Normandy.
  • The graduate students whose breakthrough on sonar technology played such a large role in enabling the Allies to destroy the Nazis’ U-boat fleet and free the North Atlantic for the merchant marine to save Britain from starvation.
  • The admiral who was the organizational genius under Dwight Eisenhower, designing and coordinating the Normandy invasion on five beaches simultaneously with significant problems at only one.

These are just a few of the many fascinating vignettes in Engineers of Victory. For any student of military history — or anyone who seeks to understand the most consequential event of the 20th century and the largest event in all human history — this book is a must read.




March 20, 2014

Self-help gurus get their comeuppance from Christopher Buckley

Self-help gurusGod Is My Broker: A Monk-Tycoon Reveals the 7-1/2 Laws of Spiritual and Financial Growth, by Christopher Buckley and John Tierney

@@@@@ (5 out of 5)

At his best, Christopher Buckley writes breathtakingly hilarious novels. God Is My Broker is one of them.

However, if you’re a devotee of Deepak Chopra, Tony Robbins, Stephen Covey, Dale Carnegie, or one of the many other high-profile self-help gurus who have streaked across the American firmament over the past century, you may not laugh. But who knows? Since Buckley (born a Catholic) takes on the Catholic Church with equal verve, you might enjoy the book, anyway.

In God Is My Broker, a certain Brother Ty has chucked a career on Wall Street — a singularly unsuccessful one, if the truth be told — and become a monk in an upstate New York monastery called Cana dedicated to the teachings of a masochistic saint. Unfortunately, Cana is on the ropes. Its source of revenue — sales of a uniquely awful wine called Cana Nouveau — has, shall we say, dried up. (Cana Nouveau is so bad that the Vatican blames a serious setback to the health of the Pope to a sampling of the stuff sent as a gift from Cana.) To reverse the monastery’s desperate financial troubles, Brother Ty decides to let God be his broker, looking for buy and sell signs in his breviary in combination with current business rumors. Meanwhile, the Abbot turns to Deepak Chopra, Tony Robbins, and their brethren for guidance. The result of these twin devotional habits are the 7-1/2 Laws of Spiritual and Financial Growth, which are conveniently spelled out as the story is told.

OK, so, you’ve gotta read it to make any sense of this proposition. And, unless you’re in thrall to a latter-day guru, you’ll probably enjoy it. A lot.

I’ve previously reviewed Buckley’s Little Green Men, Florence in Arabia, The White House Mess, and They Eat Puppies, Don’t They?, which I regard as a true classic of political satire. Before starting this blog, I also read and enjoyed immensely two other Christopher Buckley novels: Boomsday and Thank You For Smoking, which is probably his best-known work because of the movie of the same name.


February 17, 2014

The true story of Ben & Jerry’s fight to build a responsible company

responsible companyIce Cream Social: The Struggle for the Soul of Ben & Jerry’s, by Brad Edmondson

@@@@@ (5 out of 5)

One of my most vivid memories of the dozens of Social Venture Network (SVN) conferences I’ve attended over the years was seeing Ben Cohen walking into the dining hall in 2000, in tears over the sale of Ben & Jerry’s to Unilever. I went over to hug him — that’s the sort of thing you do at SVN conferences — and as he sobbed I said something stupid like “Look at it this way, Ben. You walked away with a s**tload of money.” ($41 million, actually.) Ben was not consoled.

As I recall, I first saw Ben Cohen sitting in a circle at an SVN conference in 1991. (Anita Roddick was sitting next to me, literally bouncing up and down, impatient to speak.) Not to put too fine an edge on it, I was star-struck. We didn’t speak then, but within short order I found opportunities to ask Ben about some of the innovations he’d introduced to Ben & Jerry’s to advance social justice. I learned a great deal from him, with profound results for my company when I later put those lessons into action.

In the ensuing years — SVN’s four-day conferences were held twice annually — I got to know Ben as a person rather than a star. He invited me to join him on the board of his organization, One Percent for Peace, and I became engaged in the negotiations to merge that small venture into Business for Social Responsibility, of which we’d both been co-founders in 1992 (along with a cast of dozens). At one point, believe it or not, this marketing genius even hired me to do some marketing work for his company’s huge nationwide campaign in support of the Children’s Defense Fund. Much later, I felt comfortable enough with Ben that I was able to talk him into putting his name as my coauthor on a book I was writing for SVN, published in 2006 as Values-Driven Business: How to Change the World, Make Money, and Have Fun.

Despite this unusual degree of access to Ben, and strong relationships with a number of mutual friends, I wasn’t aware of what had really happened in the tumultuous days leading up to the sale of the company, much less in the thirteen years that followed. None of the several books I’d read about Ben & Jerry’s had helped at all. Now I believe I know . . . well, a lot, though certainly not everything, thanks to Brad Edmondson’s excellent new book, Ice Cream Social. Edmondson’s subtitle, The Struggle for the Soul of Ben & Jerry’s, is right on target, melodramatic though it may seem at first glance.

Much of the author’s information and contacts came from Jeff Furman, who, little known outside, was effectively Ben and Jerry’s third partner in founding the company. In fact, factoring in both Ben’s and Jerry’s long absences  — Jerry through several years in the 1980s, and both of them through most of the 2000s — Jeff is in all likelihood the only person (at least at a senior level) who has stayed with Ben & Jerry’s throughout its history. A board member for many years now, he has served as chair since 2010. Jeff is fiercely dedicated to social and economic justice — and a nice guy to boot.

Ice Cream Social details Ben, Jeff, and Jerry’s halting journey through the 1980s toward shaping the three-part mission that the company has been known for since 1988: making the best ice cream in the world; supporting causes that promote economic, social, and environmental change; and taking into account all the company’s stakeholders when making business decisions. Ben publicly called this the “double bottom line.” Within the company, and in Ice Cream Social, the concept is termed “shared prosperity.”

For a quarter-century, Ben & Jerry’s has been an icon of socially responsible business — a movement that the company was a leading factor in creating — but through much of the decade following its sale in 2000 the company fell far short of its exemplary performance in the last century. Clueless executives placed in charge by Unilever progressively whittled away at all three pillars of the mission, deliberately lowering product quality, getting in the way of the social mission, and shoveling economic benefits toward the outsiders brought in as executives. Ice Cream Social is most compelling when telling the story of how Jeff Furman and his allies on the company’s board started fighting back against Unilever in 2007.

Aggressively holding the parent company to the precise terms of the extraordinary sales agreement Ben and his colleagues had negotiated, and holding the threat of a major lawsuit over their heads, the Ben & Jerry’s board ultimately succeeded in winning over Unilever’s top management — and, in the process, embedding some aspects of its uniquely progressive mission into the priorities of a $68 billion global conglomerate, the world’s third largest food company (after Nestle and Pepsico). Today, Ben & Jerry’s is once again a sparkling example of how a company under brilliant and visionary management can realize big profits not despite an aggressive social and environmental mission but because of it.

Though every company is unique, and the Ben & Jerry’s story is far more unusual than most, there are lessons to be learned from the company’s experience.

For starters, the differences in perspective between social entrepreneurs like Ben Cohen and Jerry Greenfield on the one hand and top executives at most large public corporations are profound. They can’t be bridged simply by briefings, educational sessions, or show-and-tell exercises. The differences lie on the level of values. B Corporations like Ben & Jerry’s express the personal values of their founders. Most big companies are still mired in the narrow-minded focus of Wall Street on short-term financial performance.

The hard bargaining between Ben & Jerry’s and Unilever, and the rocky relationship between the two companies after the sale, makes clear that good intentions are far from enough to preserve the unique character of a socially responsible company. The extraordinary sales agreement — a year and a half in the making — contained tough, enforceable provisions that made it a legal requirement for Unilever to operate Ben & Jerry’s in a manner that would maintain its unique and quirky character. Even so, the company was nearly driven into the ground over its first seven years as a subsidiary of Unilever, and it took extraordinary courage and disciplined action by Jeff Furman and others on the Ben & Jerry’s board to confront the reality and hold Unilever’s feet to the fire: genuine corporate responsibility doesn’t come easily in a classical corporate environment.

For reviews of other books about business that I’ve read and enjoyed, go to My top five books about business (plus 25 others). And for a guide to managing a responsible business like Ben & Jerry’s, read How to run a values based business.

January 6, 2014

Mindfulness at school, in sports, on the job, and in leadership

1Focus: The Hidden Driver of Excellence, by Daniel Goleman

@@@ (3 out of 5)

Daniel Goleman returned to Berkeley not long ago to speak to a large and enthusiastic audience at International House about the themes in his new book, Focus. Though he’d spent only his junior year as an undergraduate at Cal, his quips and asides quickly showed him to be fully in synch with Berkeley’s humane values. Though he never stated the point explicitly, it was also clear that Goleman saw the roots of the community’s concerns in the chemistry of our brains.

You may remember Goleman as the author of the huge 1995 bestseller, Emotional Intelligence, which taught us all that psychological factors other than IQ were better predictors of success on the job and in life. Goleman was trained as a psychologist but soon after his post-doctoral studies turned his hand to science journalism, writing about new developments in brain science and related topics for The New York Times for a dozen years and later turning to writing independently. Over the years, he has shifted back and forth from teaching and research to science writing and back again. To date, he has produced ten books. Focus is the most recent.

I vividly remember devouring Emotional Intelligence much as I would a compelling murder mystery. The book was a revelation. Focus falls far short of it. To begin with, the book’s central theme — that focused attention improves outcomes in daily life, in work, in sports, and in leadership — is no surprise at all. Many others have delivered this message over the millennia, from the yoga masters of India to Mihály Csíkszentmihályi, who introduced us to the concept of “flow” —  the single-minded immersion that, like Goleman’s focus, enables peak performance. No doubt, Goleman’s new book updates the brain science underlying these concepts, but his repeated overuse of the anatomical labels for obscure regions of the brain would have been better suited for a professional audience rather than the general reader.

The author’s academic posturing aside, I found Focus fascinating when Goleman described the application of contemporary psychological tools to pre-school and primary education. (Parents with children in school today may find this subject all too familiar; I didn’t.) The extraordinary improvement in school performance brought about by exercises in mindfulness was startling news. And the application of similar training methods in various aspects of emotional intelligence yielded similarly impressive results in the workplace, boosting job performance, job satisfaction, and workforce morale. Clearly, there’s something truly significant going on here. I just wish Goleman had found a way to report it in a more accessible and congenial way.


November 26, 2013

The Innovator’s Dilemma: why do successful firms fail?

1The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail, by Clayton Christensen

@@@ (3 out of 5)

Chances are, you’re reading this review on an example of disruptive technology. An iPhone or other smartphone. An iPad or a notebook computer. Or simply a laptop. Every one of these devices turned its industry upside down when it was introduced, driving established companies to the brink of insolvency, or even into oblivion, and paving the way for new actors to enter the landscape.

Today, almost instinctively, we understand the concept of disruptive technology. But it wasn’t until after the publication in 1995 of an article by Clayton Christensen in the Harvard Business Review entitled “Disruptive technologies: catching the wave” that the term entered the language. That seminal article was followed in 1997 by Christensen’s pathfinding book, The Innovator’s Dilemma — one of the most influential business books of all time.

Christensen, a long-time professor of business administration at the Harvard Business School, had found an answer to a question that had long mystified the business community: why had such iconic, well-managed firms as Digital Equipment Corporation, Xerox, and dozens of others that had long led their industries fallen by the wayside? The professor’s answer was not that they had simply gotten behind technologically but that they had done everything right — listening carefully to their best customers and catering to their needs by investing in sustaining technologies that offered customers added value. The problem was that the dictates of prudent business practice prevented them from investing in the sort of innovation that could turn their own industries upside down: disruptive technologies. In fact, Christensen wrote, “the only instances in which mainstream firms have successfully established a timely position in a disruptive technology were those in which the firms’ managers set up an autonomous organization charged with building a new and independent business around the disruptive technology . . . There is something about the way decisions get made in successful organizations that sows the seeds of eventual failure.”

A decade and a half ago this was a shattering insight and it explains the acclaim that Christensen’s work has received throughout the world of business. However, if you turn to his book, The Innovator’s Dilemma, in search of deeper understanding of these concepts, you may be disappointed. I was.

Sadly, this book is organized and written in a style that reeks of old-fashioned academia. Chapter One, an introduction of sorts, sums up the book as a whole — in 26 tedious pages, explaining in detail what the reader will find, chapter by chapter. First, Chapter One briefly outlines what the book will reveal, then proceeds to repeat each point in detail. Then, as though that isn’t enough, each chapter repeats the same points, adding considerably more detail. The final chapter repeats each of the major points — again. The repetition is maddening. And so is the overuse of the passive tense, which abounds throughout. Compounding the problem are the long-winded explanations of such things as how disk drives work and the distinction between thin-film technology and ferrite-oxide technology in disk drives’ read/write heads. All this material, no doubt necessary to “prove” Christensen’s thesis to his academic peers (some of whom are still not convinced), gives the book the charm and box-office appeal of a PhD dissertation about the influence of the Greek concept of the soul in 13th Century French literature.

If all you want is to get to the meat of this book and avoid slogging through endless detail about matters only an engineer could love, read the first chapter and the last one. Forget the rest. You’ll thank me.


My top five books about business (plus 25 others)

books about businessOf the dozens of books about business that I’ve read during the three-and-a-half years since I launched this blog, five books stand out. They remain fresh in my mind, and the lessons they teach continue to illuminate the path as I make my way through the thickets of the business world in all its dimensions, inside and out, variously as a social entrepreneur, impact investor, board member, adviser, and manager.

The five at the top

In alphabetical order by author’s last name

The Power of Unreasonable People: How Social Entrepreneurs Create Markets That Change the World, by John Elkington and Pamela Hartigan

The Power of Unreasonable People ranks with David Bornstein’s seminal work, How to Change the World, as a point of entry into the fascinating, and increasingly important, realm of social entrepreneurship. Written by two of the field’s leading voices, this excellent book covers the landscape, describing examples from virtually every area of interest in development, from healthcare to education to poverty eradication. In fact, the book is most rewarding in its presentation of vignettes of individual social enterprises, including interviews with many of their principals.

Freedom’s Forge: How American Business Produced Victory in World War II, by Arthur Herman

Two extraordinary men — William S. Knudsen and Henry Kaiser — are the stars of this story, business impresarios who marshaled the stupendous numbers of men and women and the unprecedented mountains of raw materials that supplied the U.S. and its Allies with the weapons of war.

Infinite Vision: How Aravind Became the World’s Greatest Business Case for Compassion, by Pavithra Mehta and Suchitra Shenoy

This is the astonishing story of Aravind Eye Care, a nonprofit, family-run opthalmological empire based in South India that exceeds the standards of eye care in Britain and the US, pioneers in advanced opthalmology, trains eye surgeons from dozens of other countries — and consistently turns a profit. The book is beautifully written.

10The Self-Made Myth, and the Truth About How Government Helps Individuals and Businesses Succeed, by Brian Miller and Mike Lapham

The Self-Made Myth goes straight to the heart of the conservative argument that favors limited government and coddling the rich, striking at the movement’s fundamental values and assumptions with their origins in the work of novelist Ayn Rand.

The Devil’s Casino: Friendship, Betrayal, and the High Stakes Games Played Inside Lehman Brothers, by Vicky Ward

An intimate, inside look at the people of Lehman Brothers, the venerable Wall Street investment bank whose record-setting bankruptcy is widely credited with triggering the meltdown of 2008. Like the close-up portraits of the rich and famous that often appear in the pages of Vanity Fair, the magazine that employs the author, this book is nothing more, and nothing less, than a character study of homo sapiens wallstreetianus. Read it for an understanding of how greed — for money, for power, and for the power that money can buy — truly was the central factor at the root of the Great Recession.

Other business books I’ve enjoyed

Arranged in no particular order. Linked to reviews. 

Hell’s Cartel: IG Farben and the Making of Hitler’s War Machine, by Diarmuid Jeffreys

Rooftop Revolution: How Solar Power Can Save Our Economy — and our Planet — from Dirty Energy, by Danny Kennedy

Difficult Men: Behind the Scenes of a Creative Revolution—From The Sopranos and The Wireto Mad Men and Breaking Bad, by Brett Martin

The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public, by Lynn Stout

KaBoom! How One Man Built a Movement to Save Play, by Darrell Hammond

Out of Poverty: What Works When Traditional Methods Fail, by Paul Polak

Winning the Story Wars: Why Those Who Live — and Tell — the Best Stories Will Rule the Future, by Jonah Sachs

Social Entrepreneurship: What Everyone Needs to Know, by David Bornstein and Susan Davis

Rippling: How Social Entrepreneurs Spread Innovation Throughout the World, by Beverly Schwartz

The Idea Factory: Bell Labs and the Great Age of American Innovation, by Jon Gertner

Private Empire: ExxonMobil and American Power, by Steve Coll

Raising Eyebrows: A Failed Entrepreneur Finally Gets It Right, by Dal LaMagna

The Quest: Energy, Security, and the Remaking of the Modern World, by Daniel Yergin

Steve Jobs, by Walter Isaacson

Boomerang: Travels in the New Third World, by Michael Lewis

All the Devils Are Here: The Hidden History of the Financial Crisis, by Bethany McLean and Joe Nocera

The Facebook Effect, by David Kirkpatrick

The Big Short, by Michael Lewis

Tribes, by Seth Godin

Switch: How to Change Things When Change Is Hard, by Dan Heath and Chip Heath

Small Change: Why Business Won’t Save the World, by Michael Edwards

Losing the News: The Future of the News That Feeds Democracy, by Alex S. Jones

Googled: The End of the World as We Know It, by Ken Auletta

Fatal System Error: The Hunt for the New Crime Lords Who Are Bringing Down the Internet, by Joseph Menn

Drive: The Surprising Truth About What Motivates Us, by Daniel Pink

The coming Big Data revolution


Big DataBig Data: A Revolution That Will Transform How We Live, Work, and Think, by Viktor Mayer-Schoeneberger and Kenneth Cukier

@@@@ (4 out of 5)

While Edward Snowden bounces from one temporary refuge to another in search of safe harbor from the long arms of the U.S. government, the American public is starting to wake up to the reality of Big Data. The National Security Agency, long one of the pioneers in this burgeoning but little-appreciated field, has been teaching us — or, rather, Snowden, The Guardian, and the Washington Post have been teaching us — about the power that resides in gargantuan masses of data. Now here come Viktor Mayer-Schoeneberger and Kenneth Cukier with a new book that goes far beyond the headlines about espionage and invasion of privacy to give us an eminently readable, well-organized overview of Big Data’s origins, its characteristics, and its potential for both good and evil.

When we think of Big Data, we, or at least most of us, think of computers. However, the authors persuade us that the fundamentals of Big Data were laid down more than a century before the invention of the microprocessor. They point to a legendary American seaman named Matthew Maury. In the middle of the 19th Century, after 16 years of effort, Maury published a book based on 1.2 billion data points gleaned from old ships’ logs stored by the Navy that dramatically reduced the distances (and, hence, the time elapsed) in ocean voyages by both military and commercial ships. Maury used facts derived from decades of mariners’ observations to dispel the myths, legends, superstitions, and rumors that had long caused ocean-voyaging ships to pursue roundabout courses. Not so incidentally, Maury’s work also facilitated the laying of the first transatlantic telegraph cable.

If not the first, this was certainly an early application of Big Data, which the authors describe as follows: “big data refers to things one can do at a large scale that cannot be done at a smaller one, to extract new insights or create new forms of value, in ways that change markets, organizations, the relationship between citizens and governments, and more.” For example, if Maury had had available only a fraction of the old ships’ logs he found in the naval archives, his task would have been impractical, since each individual log doubtless included small errors (and an occasional big one). Only by amassing a huge store of data did those errors cancel out one another.

Now, in the Digital Age, the volumes of data that can be harnessed are, at times, literally astronomical. “Google processes more than 24 petabytes of data per day, a volume that is thousands of times the quantity of all printed material in the U.S. Library of Congress.” AT&T transfers about 30 petabytes of data through its networks each day. Twenty-four or 30 of something doesn’t sound like much, unless you understand that a megabyte is a million bytes, a gigabyte is a billion bytes, a terabyte is 1,000 times the size of a gigabyte, and a petabyte is 1,000 times the size of a terabyte. That’s 1,000,000,000,000,000 bytes. That’s a lot of data! But even that’s only a tiny slice of all the data now stored in the world, “estimated to be around 1,200 exabytes.” And an exabyte (I’m sure you’re dying to know) is the equivalent of 1,000 petabytes. So, 1,200 petabytes could also be stated as 1.2 zettabytes, with a zettabyte equal to 1,000 petabytes, and I’ll bet that not one person in a million has ever heard of a zettabyte before. Had you?

All of which should make clear that when we talk about Big Data today, we’re talking about really, really big numbers — so big, in fact, that almost no matter how messy or inaccurate the data might be, it’s usually possible to draw useful, on-target insights from analyzing it. That’s what’s different about Big Data — and that’s why the phenomenon is bound to change the way we think about the world.

We live in a society obsessed with causality. We often care more about why something happened than about what it was that happened. And in a world where Big Data looms larger and larger all the time, we’ll have to get used to not knowing — or even caring much — why things happen.

“At its core,” write Mayer-Schoeneberger and Cukier, “big data is about predictions. Though it is described as part of the branch of computer science called artificial intelligence, and more specifically, an area called machine learning, this characterization is misleading. Big data is not about trying to ‘teach’ a computer to ‘think’ like humans. Instead, it’s about applying math to huge quantities of data in order to infer probabilities: the likelihood that an email message is spam; that the typed letters ‘teh’ are supposed to be ‘the’; that the trajectory and velocity of a person jaywalking mean he’ll make it across the street in time [so that] the self-driving car need only slow slightly.”

The authors refer to data as “the oil of the information economy,” predicting that, as it flows into all the nooks and crannies of our society, it will bring about “three major shifts of mindset that are interlinked and hence reinforce one another.” First among these is our ever-growing ability to analyze inconceivably large amounts of data and not have to settle for sampling. Second, we’ll come to accept the inevitable messiness in huge stores of data and learn not to insist on precision in reporting. Third, and last, we’ll get used to accepting correlations rather than causality. “The ideal of identifying causal mechanisms is a self-congratulatory illusion; big data overturns this,” the authors assert.

If you want to understand this increasingly important aspect of contemporary life, I suggest you read Big Data.

Viktor Mayer-Schoeneberger and Kenneth Cukier come to the task of writing this book with unbeatable credentials. Mayer-Schoeneberger is Professor of Internet Governance at Oxford University, and Kenneth Cukier is Data Editor at The Economist.

A small publisher that thrives in a declining industry

By Steve Piersanti


Editor’s note: For the past year I’ve been serving on the board of directors of the remarkable little publishing company in San Francisco that will release my new book, The Business Solution to Poverty, in September. Berrett-Koehler publishes nonfiction exclusively, concentrating on business, personal fulfillment, and current affairs. Unlike so many other publishers, the company has been consistently profitable throughout the past decade, outpacing industry standards with rising sales as the book market shrinks. Berrett-Koehler was founded 21 years ago by Steve Piersanti, who continues to serve as editor and president.

In keeping with Piersanti’s inclusive style, more than 100 of the company’s stakeholders—board members, staff, authors, suppliers, service providers, customers, sales partners, and shareholders—as well as several industry experts unconnected to the company gathered on June 18-19, 2013, to participate in Berrett-Koehler’s strategic planning process. (Full disclosure: I also serve on BK’s Strategic Planning Team and helped prepare the event.) What follows is adapted from Steve’s opening remarks for the two-day event. He entitled his presentation “Secrets of Berrett-Koehler’s Success.” 

The article that follows is long (more than 5,000 words) but it’s well worth reading if you want to know what it takes to flourish in an industry—any industry, actually—that is experiencing disruptive change.

1.     Multiple Stakeholder Focus

This is really the foundational concept of Berrett-Koehler. This concept came before our publishing programs, our mission, our books, everything. It goes back to before Berrett-Koehler existed. Before founding BK, I had been president of Jossey-Bass Publishers during its challenging transition from being an independent company to becoming part of the media empire of Robert Maxwell and being placed as a division of Maxwell Communications Corporation. I quickly discovered that our new corporate parent was calling all the shots, and none of the other Jossey-Bass stakeholders really mattered. Not the Jossey-Bass employees who were central to the company’s success; not the authors with whom Jossey-Bass had longstanding relationships; not the suppliers and service providers on whom the company depended. All that really mattered was the call from my boss in New York City.

What was especially troubling about this new balance of power was that there was nothing our new corporate parent was doing that made Jossey-Bass more productive or profitable. Yet, without adding any value, the corporate parent presumed to unilaterally govern our company. It was easy to see that something was deeply wrong with this equation.

And so, when I created Berrett-Koehler’s founding document, “Vision and Plan for a New Publishing Business,” the starting place for my attempt to “rethink the concept of the publishing company” was what I called “Multiple Stakeholder Focus.” “Five ‘stakeholder’ groups – authors, employees, suppliers, owners, and communities (customer, societal, and environmental) – contribute to the success of publishing ventures. Each has a ‘stake’ or investment in the publishing business, whether that investment is time, talent, money, or other resources . . . Berrett-Koehler believes that more balance and equity is needed in the dealings among the stakeholder groups, so that the employees, authors, suppliers, and communities benefit more from the investment each makes and the value each creates for the publishing business. Berrett-Koehler also believes that the relationship among the stakeholder groups needs to be more of a partnership and more fair, open, humane, ethical, and interactive among all of the groups.”

An early manifestation of this focus was that our very first catalog in May 1992 listed many of our stakeholders by name in the catalog. We’ve done this in every catalog since then.

2.     Stewardship

This has gone hand-in-hand with multiple stakeholder focus from the beginning. We were deeply influenced by the ideas in Peter Block’s book Stewardship, which I started working on with Peter right after I began organizing Berrett-Koehler Publishers. In our first catalog I wrote: “If I were to choose one word to describe our vision, it would be ‘stewardship.’ By this I mean a deep sense of responsibility to administer the publishing company for the benefit of all of our ‘stakeholder’ groups.”

Block defines stewardship as “the willingness to be accountable for the well-being of the larger organization by operating in service, rather than in control, of those around us. Stated simply, it is accountability without control or compliance.”

So here was our role as BK managers and employees: to be accountable for serving the interests of all of BK’s stakeholders without needing to do so through control or compliance. Actually, we hope that all BK stakeholders will view themselves as stewards who are accountable for serving the interests of other stakeholders and the whole without needing control or compliance to do so.

3.     Community Engagement and Support

A couple of years into my service as president of Jossey-Bass Publishers I got a call from my boss in New York in which he said that there was a corporate-wide workforce reduction going on and all units were required to cut their headcount by 10 percent. Jossey-Bass had 68 employees, and we were instructed to reduce our headcount to 60 employees. This made no rhyme or reason for Jossey-Bass because we were highly successful and growing rapidly; we had just finished a year in which our sales were up 22 percent and our profits were up 46 percent. Moreover, our business plan of adding 8 more employees had already been approved, and now we were told that we had to instead cut 8 employees. This would have required us to lay off 8 employees, which was unjust and unjustified to me, given the circumstances.

Long story short, our management team fought this edict for two months and I refused to carry out the corporate order. On the afternoon of May 29, 1991, I was fired and told to clean out my desk. But the grapevine worked very quickly and the very next day at my home my phone started ringing with calls from Jossey-Bass authors, suppliers, and service providers who expressed their dismay at this chain of events, their belief in my work and stance, their encouragement to start a new publishing company, and their offers of support. These calls continued for many weeks, as one person who had heard the news would tell another person and encourage that person to contact me, and so on. It was through the support and engagement of all these people that Berrett-Koehler Publishers was born. Listed on the screen are some of the many people who became part of our original community in the first few months when Berrett-Koehler was being organized.

Today there are hundreds of ways that BK engages our communities and receives support from our communities. In the interests of time, I’m going to mention just one. BK authors and other community members are an army of scouts out searching for good authors and good book projects for us and recommending to those authors that BK would be the best publisher for their books. They are the most credible and influential scouts we could possibly have because they know so much about their fields and about BK.

Here’s how bestselling author Peter Block describes this engagement: “I have been a constant source of new authors. When someone comes to me about publishing a book, BK is the first place I send them. I do this partly because I know they will be treated with respect, and they will learn something about the market for their ideas. Most people I refer to BK get refused, but in a useful and sensitive way. So this publisher has a low cost feeder network for new properties, the life blood of the business.”

And here’s how bestselling author Richard Leider describes this engagement. “I have proudly referred dozens of would-be authors to BK over the years. So many that they have offered, partly in jest, to print a BK business card for me! Whether an author landed a contract with BK or not, EVERY single one of them thanked me for the care and insights that they received from BK. Now, that’s walking your talk!”

4.     Publish Books That Make a Difference

When our Editorial Director, Neal Maillet, applied several years ago to work at Berrett-Koehler, he wrote: “As a business and leadership editor whose titles frequently competed for shelf space with BK, I can only express my deep sense of admiration and, to be honest, envy, for the consistent sense of mission and values that BK titles communicate. BK books are for people who are determined to improve themselves and their organizations – not just to rely on corporatespeak or easy answers. BK titles always present a challenge and an invitation – the challenge to do the hard but rewarding work of making positive change, and the invitation to seek beyond self-gratification to community . . . More than anything, a BK book isn’t just a product to be sold. It is invariably part of a message that is consistent across the entire organization.”

It may surprise you but publishing books with a difference-making message was not part of the original concept of Berrett-Koehler. The original concept was more mainstream, which I described as “Leading-edge publications that make new contributions to professional audiences.” But this quickly changed. The books we attracted – and the books that most interested us – were books with big, path-breaking messages about changing individuals, organizations, and the world.

This started with Leadership and the New Science, which was one of the first three books BK published. When a former college advisor of mine sent me Meg Wheatley’s manuscript, I immediately saw that this was different from all the hundreds of books that I had worked on in my previous thirteen-year career as an editor and book marketer. The Library Journal review captured the difference: “Hold onto the top of your head when you read this book . . . Using exciting breakthroughs in biology, chemistry, and especially quantum physics, Wheatley paints a brand-new picture of business management . . . nothing less than an entirely new set of lenses through which to view our organizations.” A newspaper columnist called “The Lazy Literate” expressed the uniqueness of Meg’s work on her next book in a less flattering way: “Yikes! These folks have been eating too many avocados in their hot tubs!” Either way, Leadership and the New Science went on to not only sell nearly 400,000 copies but also to profoundly influence the work of thousands of other book authors, organizational thinkers, and organizational leaders.

In our 20th Anniversary Celebration a year ago, I cited the case of how a single BK book, Future Search, has made a positive difference for tens of millions of people around the world through the many thousands of future searches in more than 90 countries that have been conducted by the more than 4,000 people who have been trained in the future search methodology.

To give a very current example, the annual meeting this month of the foreign ministers of the thirty-five member countries of the Organization of American States focused on drug problems in North America, Central America, and South America. This meeting was organized around the methodology of Adam Kahane in his new BK book, Transformative Scenario Planning. For the past year the president of Columbia and other country presidents and prime ministers have been working to develop new approaches to drug problems, and they turned to Adam Kahane and his book’s transformative scenario planning methodology to help create and articulate those new approaches.

5.     Eat Our Own Cooking

From the beginning, we have been striving to learn from the books we publish and to practice our book’s ideas in our own company and community.

For example, a central concept in Stewardship is to avoid class systems in management, employment, and compensation practices. One manifestation of class systems is that most organizations have two compensation systems, with the executive compensation system designed to pay those at the top as much as possible and the employee compensation system designed to control costs. Inspired by Stewardship, Berrett-Koehler has just one compensation system for everyone in the company, and it is designed to pay a living wage to everyone, to minimize the disparity between the lowest and highest paid employees, and to direct our company success to raising the whole boat. Accordingly, the difference between my salary and the salary of the lowest paid full-time BK employee has always been less than four to one from the beginning of our company until now. And the same benefit programs and incentive compensation programs apply to everyone.

Another example. Anyone who interacts with Berrett-Koehler soon learns that our culture is all about sharing information openly and freely, so that everyone knows everything. We are open source with authors, suppliers, customers, service partners, and even competitors. And I have always perceived my job to be continuously sharing information in many ways with all of our stakeholder groups. But you may not know the source of this culture and practice. It all started with internalizing the ideas in Chapter 6 of Leadership and the New Science, which is called “The Creative Energy of the Universe – Information.”  Read that chapter, and you’ll see what I mean.

BK has also been influenced by another of the first three books we published: Getting Things Done When You Are Not in Charge. Give up the illusion that you are ever in charge. None of us is ever in control. But we all can get things done when we are not in charge. Of course, this lesson applies to this event. We all can get important things done by acting on ideas that inspire us here even though none of us is in charge of others here.

Finally, here’s an example in the words of our tremendous Director of Subsidiary Rights, Maria Jesus Aguilo: “I was hired as a production and marketing assistant in 1996. At about that time we were publishing Managers As Mentors, so my boss at the time, Pat Anderson, took me aside and told me: I just finished this fantastic book and I really feel like I need to be a good mentor to you. Therefore, I would like us to talk about what it is that you expect from your work here at BK and help you all I can. I told her that I was very happy with my position and learning a lot, but what I would really like to do is rights licensing. A couple of years went by before an opportunity presented itself for me to do rights, but when it did, Pat offered me the position. I learned two things early on in my career at BK: that BK really walks the talk in ways that deeply affect others, and that my managers at BK really listened to my needs and acted upon them. Almost twenty years later, I still derive a lot of inspiration for my work from how the ideas in our books change lives in big and small ways. They changed mine!”

6.     Mission: Creating a World That Works for All

For the first eight years of BK’s history we were in search of a way to express our mission. A mission articulates the fundamental purpose of an organization or enterprise, succinctly describing why it exists. We tried many different ways of expressing our mission. Some are shown on the screen. All had good points, but we were not satisfied with any of them. So we made articulating our mission one of the central objectives of our strategic planning process in the year 2000. “Creating a World That Works for All” emerged from that process and has been our mission ever since.

What has happened over the past thirteen years is that “Creating a World That Works for All” has come to be shorthand for everything that BK community members love about Berrett-Koehler. It has come to signify – all wrapped up in one short memorable phrase – our multiple stakeholder focus, books that make a difference, stewardship, partnership, sustainability, and many other dimensions of BK. It has come to have great meaning for many BK community members, who use it frequently in telling others about BK and expressing their own connection to BK. It has also served to communicate to authors and others a BK point of view, and this point of view is one of our major competitive advantages, as book marketing consultant Todd Sattersten recently pointed out to us.

What does this mission mean in terms of seeking changes in the world, selecting publications that advance these changes, and striving to pursue these changes in our own company and community?

7.     Partnership

Partnership is the way we seek to run Berrett-Koehler and to interact with all of our stakeholder groups – with collaboration, invitation, dialogue, consent, respect, openness, integrity, and mutualism, instead of compulsion, force, violence, or hierarchy.

Partnership is at the heart of the relationship we strive to establish with authors. One manifestation of partnership is our publication agreement, which has many clauses that create a more collaborative relationship between the publisher and authors than is the norm in other companies’ publication agreements.

The fullest manifestation of our partnership with authors is the BK Authors Cooperative, the one-of-a-kind organization where our authors come together to help each other in many big and small ways to increase their success and impact.

We are now seeking to establish a Berrett-Koehler Foundation that would further extend our partnership approach to helping young leaders around the world put into practice systems-changing ideas and methods that help create a world that works for all.

This partnership approach extends to our relationships with our suppliers, service providers, sales partners, and other stakeholders, as I’ll describe in later examples.

8.     Quality and Value Added

All of our systems and approaches are designed to add value and create quality throughout the publishing process. For example, we create high quality in our books by forming longstanding, close, collaborative partnerships with about twenty of the best book production teams around the country, then by sending each new book to the book production team best matched to the unique requirements of that particular book, then by that production team, the author, and the BK staff all working closely together to customize and enhance the book.

Throughout the book publishing world there are constant lamentations about decades of decline in how much editorial guidance and support publishers offer to authors. In contrast, one secret of BK’s success is the extensive editorial guidance and support we provide to authors. We do this in three ways, of which only the third way is common today among other publishers. First, we do a great deal of up-front editorial coaching of authors to improve the core ideas, organization, and framing of books, even before draft manuscripts are written. Second, we send all draft manuscripts to multiple outside reviewers who provide readers’ views of how to improve manuscripts. And third, we arrange top-notch copyediting of manuscripts.

This quality pays off in helping many BK publications to be bestsellers, not just upon publication but for many years following publication. Three BK books have each sold well over one million copies: Confessions of an Economic Hit Man by John Perkins, Eat That Frog! by Brian Tracy, and Leadership and Self-Deception by The Arbinger Institute. In each case BK provided editorial guidance that made the book sell far more copies and have greater impact than otherwise would have been the case. For example, my and our manuscript reviewers’ guidance tremendously strengthened John Perkins’ messages in Confessions of an Economic Hit Man, anticipated the major challenges from critics, and helped Perkins add and clarify materials to address the challenges before the book was published.

9.     Author-Friendly Practices

When Corporate Responsibility Officer magazine gave Berrett-Koehler its award for “Stakeholder Accountability,” it told the following story in the article announcing the award. “At first, Howard Karger says, he couldn’t figure it out . . . A two-time Senior Fulbright Scholar, Karger is the author of multiple books. In late summer of 2004 he found himself working for the first time with Berrett-Koehler . . . [He said] ‘After 25 years of book publishing, I was suspicious . . . I was made to feel like a part of the organization. Almost like staff.’  He grew more wary when the publisher insisted that he travel to San Francisco to meet editorial, marketing, design, and publicity staff. Finally, he realized, ‘these were people doing what they believed in and producing books they were proud of. Democracy for Berrett-Koehler is not just a slogan.’ [The article concludes] In the rough-and-tumble world of book publishing, Berrett-Koehler stands out not only for its treatment of authors, but also for the manner in which it engages employees, business partners, readers, and community.”

This article is describing one of Berrett-Koehler’s many unique practices: launching each book with a full-day Author Day that connects the author to the whole BK staff, gets everyone excited about the book, and creates close collaboration between the author and publisher on all aspects of making books successful.

BK’s author-friendly practices include the following:

  • Author-friendly publication agreement
  • Collaboration in publication decisions
  • Collaboration in cover and interior design
  • Extensive sharing of information
  • Open access to BK staff on ongoing basis
  • Responsiveness to authors’ contacts and requests
  • “Author Day” for every author
  • “Bill of Rights and Responsibilities for BK Authors”
  • and the unique BK Authors Cooperative, an independent nonprofit organization.

10. Integrity and Transparency

These are two elements of partnership. I’ve decided to feature them separately because they pull together so many other dimensions of what makes BK work, as does Jamie and Maren Showkeir’s book Authentic Conversations.

One example of the power of our sharing information openly is our how our partnerships have worked with our two principal book printers, Malloy and Hamilton. There have been times in BK’s history, such as from 2001 to 2003, when we faced severe cash flow shortages and probably could not have kept operating as an independent company without agreement from our printers to extend substantial additional credit to BK even though we were far behind in payments on previous printing jobs. Here is the explanation from Bill Upton, Malloy’s president at the time, for why Malloy continued supporting BK: “One experience that stands out is how open you were with financial information, both current and projected, as you worked with Hamilton and Malloy during the years of loans and past-due payables with us. That openness is what made it possible for both printers to hang in there and continue to support BK.” He continued: “The obvious integrity and commitment of you and the entire staff was a very important factor. We’ve had experiences with other publishers in the past where they expanded their trade credit by working with additional suppliers – our old invoices were left unpaid while the publisher worked with new suppliers on a cash terms basis. We’ve also had publishers simply throw in the towel. Those scenarios were unimaginable with BK.” Fortunately, this trust paid off both for our printers and for BK. For some years BK has been, in Bill Upton’s words, “a model of correct, prompt, complete, problem-free bill paying.”

Our focus on doing what we say we will do, not overpromising, creating systems to fulfill promises, and holding ourselves accountable is especially noteworthy in the area of sales and marketing. Publishers are notorious for making lofty sales and marketing promises in their early discussions with authors and then not fulfilling their promises. Berrett-Koehler has just the opposite approach, which begins with being straight with authors about “The 10 Awful Truths about Book Publishing” [which can be accessed by clicking on its title here]. The rubber really hits the road with the extensive systems that our Sales and Marketing Department has set up (1) to explicitly tell authors all the things we will and will not be doing to market their books, (2) to follow through on everything that we said we would do, and (3) to report back to authors that we have done what we said we would do.

We strive to create systems of integrity and transparency in all areas of the company. For example, our book production systems are set up to enable us to publish books almost always on the schedule laid out at the beginning of the production process.

All of this is extremely challenging in an industry as complex as book publishing. BK Editorial Director Neal Maillet reflects this challenge when he reports, “I once asked the manager of a publisher’s royalty department how she kept track of all the tricky contractual exceptions editors negotiated and was told ‘We don’t – we just use the boilerplate and apologize profusely when an author or agent catches the mistake.’”

BK’s approach is to only commit to things that we can deliver, to create systems that enable us to actually fulfill our commitments, and to share information with our stakeholders that show how we have performed what we promised to do.

11.  Sustainability

Here I am focusing on two dimensions of sustainability. The first dimension is the thrust of many of our books, such as those pictured here, to establish lifestyles, institutions, economic systems, environmental systems, and other ways of living and interacting that are sustainable for generations going forward. The second dimension is establishing strategies and practices that make Berrett-Koehler Publishers sustainable both in terms of being able to stay in business and in terms of the environmental and social responsibility of our own business practices.

One embodiment of our commitment to sustainability is that Berrett-Koehler is a Certified B Corporation. B Corporations meet rigorous standards of social and environmental performance. To qualify as a B Corp, Berrett-Koehler had to complete and pass a 230-question “Impact Assessment” that examined BK’s performance on measures of corporate accountability, transparency, compensation, benefits, employee training, worker environment, worker ownership, social benefit, community service, local involvement, diversity, job creation, and environmental practices.

12.  Multichannel Marketing and Sales

This has been part of BK’s formula from the very beginning. Our June 1991 “Vision and Plan for a New Publishing Business” listed 17 sales and marketing channels for the company. Today we still are active in all of the original 17 channels and have added many other channels, such as online booksellers and social media, which did not exist in 1991.

Our multichannel approach is good for authors and book sales because it increases each publication’s chance to succeed in the marketplace by giving each publication many diverse channels in which to find a market. For example, some books do poorly in bookstore sales but do well in special sales or foreign language translations.

Of course most publishers market through multiple channels. But most do not market as extensively in as many different channels as does BK.

The downside of BK’s approach is that it is very expensive. Berrett-Koehler devotes over 20 percent of our revenues to sales and marketing, which is far above publishing industry averages.

13.  Independence

In an age of corporate consolidation, BK has remained fiercely independent. Berrett-Koehler is owned by our stakeholders, including our employees, authors, customers, suppliers, service providers, and sales partners.

This independence allows us to chart our own course and to not have our unique values and practices submerged in a giant corporate bureaucracy. And it allows us to own our own future and to not be governed by short-term stock market pressures and shifting corporate edicts.

14.  Continuity, Constancy, Fidelity

One of BK’s great strengths has been our ability to keep good people and the resulting continuity of our staff. 18 of our 25 employees have been with BK for 5 or more years. And our average staff tenure with BK is 10 years. Love ‘Em or Lose ‘Em has not only been a bestselling BK book, it has also been a guide to our company.

Another secret to our success has been the constancy of our purpose, vision, and distinctive practices over many years. Our list of 11 “Guiding Concepts for Berrett-Koehler Publishers” was written 21 years ago. All of these “Guiding Concepts” are still our touchstones today – such as multiple stakeholder focus and environmental consciousness and action. This constancy increases our ability to move Full Steam Ahead!, as the title of Jesse Stoner and Ken Blanchard’s book proclaims.

When people ask me what about Berrett-Koehler I am most proud about, my answer is our fidelity to our mission and values during the many challenging periods we have had over the years. For example, when the great recession hit in 2008 and 2009, like most publishing companies we experienced a substantial revenue decline. However, we decided to respond to this crisis by doing more of what BK stands for – under the headings of Integrity, Mission and Strategies, Participation, and Efficiency and Effectiveness – rather than compromising our mission and values. Whereas Publishers Weekly reported that approximately two thirds of publishing companies laid off employees and cut back their publishing programs during this period, Berrett-Koehler did neither. Instead, we shared full information with all employees, and the employees collectively decided to take a 10 percent across-the-board salary reduction (except for the lowest-paid employees, who received smaller reductions), which the employees then lifted after revenues recovered. My hope is that our identity as a company and community is so deeply imprinted that it will be our destiny and carry us through the many other challenging periods that are surely yet to come.

15.  Continuing Innovation

The previous 14 secrets may make it sound like BK is in good shape. However, it is clear that we cannot stand still. Everything is going through continuous change around us in our business and publishing environments. Unless we are leaders ourselves in making the future, unless we do new and surprising things to leapfrog over obstacles that have constrained us in the past, and unless we continue developing new ways of doing business that bring greater value to our customers and other stakeholders, Berrett-Koehler will not survive over the long term.

Larry Ackerman, author of Identity Is Destiny, recently observed that BK is now 21 years old and that this age can be viewed as having reached “adulthood.” I think that is a good image for where we are now. At 21, it is time to turn more of one’s focus outward to contributing to a larger work and to making a bigger difference in the world through service to others. This can be true of Berrett-Koehler as well and this event can help BK reach out in new and better ways to make a greater positive difference in the world.

As we seek to innovate in new ways, it is my prayer that we will continue to be guided by the secrets named in this address. I believe that there is great power within these ideas and that they will make our innovations better and more likely to succeed. We can do more to create a world that works for all. Thank you.

Delivering healthcare to billions of the world’s poor


A review of Pharmacy on a Bicycle: Innovative Solutions for Global Health and Poverty, by Eric C. Bing and Marc J. Epstein

@@@@ (4 out of 5)

Despite the widespread conviction that the state of the world is deplorable and getting worse by the day, the human race has made measurable, even dramatic progress in some important ways. The collective state of our health is the most telling example. In part because of the eradication of smallpox, the near elimination of polio, and the significant recent progress on HIV/AIDS, humanity in general is living longer and healthier lives. Average life expectancy at birth in India around 1950 was 38 years; today it is 65. In China, it was 41; today it is 77. Over the same period, average life expectancy in the United States has risen from 65 to approximately 80. Numbers can be misleading, but these tell a compelling story.

Building on this amazing success story, major institutions — the United Nations, the U.S. Government, and the Bill and Melinda Gates Foundation, for example — have invested billions of dollars in recent years, targeting specific diseases, promoting the use of vaccines, and building public health infrastructure in developing nations. All these admirable efforts promise to continue the favorable trend in healthcare that has unfolded over the last half-century.

However, there is a hidden dimension in this picture. As Eric Bing and Marc Epstein explain in Pharmacy on a Bicycle, billions of poor people living in rural areas all too frequently fail to gain the benefit of these advances in healthcare. It’s fashionable to look on the world today from the perspective of the cities, but in spite of the massive migration of the last several decades, nearly half (49%) of the world’s population still resides in rural areas. Great numbers of these people live far from transportation hubs, often hours or even days of walking from the nearest road. It’s to these billions of people, nearly all of them desperately poor by American or European standards, that Bing and Epstein turn their attention in their illuminating little book.

Pharmacy on a Bicycle rests on a single, fundamental premise: “Most poor outcomes [in healthcare] are caused not by lack of effective medicines or medical know-how. The ability to prevent and treat many of these diseases inexpensively has been available for a very long time. But getting the right remedies to the right people in the locations where they are needed, in a way they will use them, and at a cost they can afford is continually a challenge. This is not a scientific problem. It’s a business challenge.”

Bing and Epstein argue that humankind has never before been in such a good position to meet this challenge. The costs of many widely-used drugs have fallen dramatically, and scientists have greatly simplified the treatment of many diseases by combining multiple drugs into single capsules or tablets. Extremely cheap diagnostic techniques that provide nearly instant assessments are now available. Through telemedicine, a single well-trained physician can now offer her or his expertise to much larger numbers of patients. The widespread use of clinical checklists and the application of franchising to the healthcare industry have both improved access and lowered costs. And new business models, successfully piloted in many countries, using bicycles, motorcycles, and trained village-level representatives, make it possible for healthcare agencies and for-profit companies to overcome the “last mile problem” that has traditionally limited most of the benefits of the market economy to population centers. “We are now at a tipping point to make lasting global health impacts,” the authors write.

One of the most promising recent developments is the now near-universal access to cell phones; by next year, the number of mobile phones is expected to be greater than the world’s population. “Mobile phones are now being used for patient education and awareness, treatment compliance, health care worker training, data collection, disease and epidemic outbreak tracking, and diagnostic and treatment support.”

Pharmacy on a Bicycle is intended to spark much wider adaptation of these advances by making them more widely known. The book presents a seven-point implementation model called IMPACTS, which encompasses innovation and entrepreneurship, maximizing efficiency and effectiveness, coordinating with partners, accountability, creating demand, task shifting (e.g., empowering nurses to take on some doctors’ responsibilities), and scaling. The book includes an abundance of excellent examples that bring these deadly-sounding prescriptions to life.

Eric Bing is an M.D. who also possesses a Ph.D. in epidemiology and an MBA. He’s the director of global health at the George W. Bush Institute at Southern Methodist University. His co-author, Marc Epstein, is an eminent and much-published professor of management at Rice University in Houston whose previous teaching posts were at the Harvard and Stanford business schools and INSEAD (European Institute of Business Administration).

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