Friday, January 30, 2009

Business Books Worth Reading

Fellow analyst Ida Rose Sylvester put out a call on twitter (@idarose) for “a list of greatest business books...classics or current, but genuine game changers (no pop or t[r]endy ones, please).” Here’s my cut. With one exception, these are books that I’ve actually read myself and not just read summaries of. I would guess that I’m not really being fully responsive to the question because some of these are (or at least were) popular and trendy at some point. I’m also not sure that all are really business books in the strict meaning of the word.

Given that I work in and around the IT industry, I’ve also included a few titles that are more relevant to my specific concerns than to the more general business case. With those caveats, here we go:

Competitive Strategy: Techniques for Analyzing Industries and Competitors by Michael Porter of Harvard Business School. This is perhaps the most landmark book I have on this list. It laid out a framework for analyzing company strategy that is still widely used.

The Innovator's Dilemma: The Revolutionary Book that Will Change the Way You Do Business (Collins Business Essentials) by Clayton Christensen, also of Harvard Business School, is the book that people are alluding to when they use the term "disruptive technology." In the book he "suggests that by placing too great an emphasis on satisfying customers' current needs, companies fail to adapt or adopt new technology that will meet customers' unstated or future needs, and he argues that such companies will eventually fall behind." This is clearly especially apropos in high tech but he offers examples from a wide range of industries.

Crossing the Chasm by Geoffrey Moore. The focus of this book is making the transition from a small group of early adopters to the much larger mainstream market. The often-used bell curve labeled "Technology Adoption Lifecycle" split into groups such as "early adopter" and "late majority" comes from here.

(Like some of the other books here, Crossing the Chasm sometimes feels a bit like a magazine article that's been puffed up into a full book. As Philip Greenspun notes on Amazon "This book illustrates a fault in the publishing industry. If you have a 50-page idea it is too long for a magazine. But it is too short for a book. So if you wanted to get it distributed before the Web came along, you had to drop in words until you reached 200 pages." In all fairness, examples and the like do reinforce the basic concept, but I've made the same comment about a lot of business books myself.)

The Alchemy of Growth: Practical Insights for Building the Enduring Enterprise by Baghai, Coley, and White rounds out my list of books that are essentially about business strategy. Alchemy focuses on how companies can sustain growth by focusing on "three horizons." The first is the current bread-and-butter of the firm; the second, the fast-developing entrepreneurial ventures; and the third, the ideas that will germinate into tomorrow's profits.

Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard Thaler and Cass Sunstein is the one book on this list that I haven't gotten around to reading yet; it's quite recent. It's also not especially focused on using the concepts that it describes for business purposes. Why bring it up then? Well, Richard Thaler was one of (perhaps the) pioneer of something called behavioral decision theory. In a nutshell, it's an approach to understanding how people make decisions that consider how people actually make decisions as opposed to how they would make them were they the rational expected-value maximizing actors that traditional economics largely assumes they are. It's an incredibly powerful concept for many areas of business as it deals with things like the best way to frame or present possible outcomes. (Thaler was a professor of mine at Cornell and he's now at University of Chicago.)

Getting to Yes: Negotiating Agreement Without Giving In by Patton, Ury, and Fisher is a breezy read. But it also lays out succinctly a number of basic negotiation principles that make a lot of sense but aren't necessarily common sense.

Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company by Andy Grove, former Intel CEO. This list is light on CEO memoirs and biographies. However, I had occasion to read this book as part of an Intel competitive assessment that I was putting together for a client and I got a lot out of it. Partly this was because it was interesting to read Grove's analysis of how the computer industry had developed but there are also good insights about how Intel dealt with PR crises (e.g. the Pentium FDIV bug) and technology transitions.

While we're on the topic of the computer industry, I'll mention three books that are essentially histories of one sort or another. However, they also give insight into project management and how product development and product teams work. These are:

The Mythical Man-Month: Essays on Software Engineering, Anniversary Edition (2nd Edition)by Frederick Brooks. An account of bringing the IBM System 360 to market, this book is especially valuable for highlighting two specific concepts: the vast gulf between a simple product and a complete system and the difficulty of accelerating projects by adding more people.

The Soul Of A New Machine by Tracy Kidder. This may be the best account of developing a new technology product, the Data General "Eagle" minicomputer, ever written. (Of course, I may be biased because I worked at Data General for many years--joining a few years after the events recounted here--and worked closely with many of the people in "the book," including Tom West.)

Show Stopper!: The Breakneck Race to Create Windows NT and the Next Generation at Microsoft by G. Pascal Zachary is another excellent account of developing a product, Microsoft Windows NT in this case. Dave Cutler, formerly of Digital Equipment Corp., is the focus here.

Finally, I'll close with a couple of classics. It's been ages since I've read these and I'm not sure how relevant they are--outside of historical interest--at this point. But I include them because they're often mentioned when talk turns to business books. These are My Years with General Motors by Alfred Sloan and any of a variety of works by Peter Drucker, such as Classic Drucker: From the Pages of Harvard Business Review.

I’m sure that others have their own favorites. But did I make any egregious omissions?
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