Book Reviews
How: Why How We Do Anything Means Everything...in Business (and in Life)
By Dov Seidman
Like most readers of CRO magazine, you are likely to be asked to critique a book written by someone you know—a colleague, a customer or even a boss. The experience can be weird. Here are the secrets to surviving. First, manage your expectations. Second, be honest. And third, remember that in selling books, criticism matters.
So when I was sent a copy of Dov Seidman’s new book, “How: Why How We Do Anything Means Everything...in Business (and in Life),” my eyes were wide open. After all, I know Dov, and his personal story is a jaw-dropper. Here’s the short version: Seidman, the CEO of training and management services company LRN is a self-described “chronic dyslexic” who scored a below-average 900 on his SATs. He then overcame his reading problems to earn three philosophy degrees, two at UCLA and another at Oxford, plus a law degree from Harvard.
The good news is that his first offering is just as surprising as the author’s come-from-behind story. “How” is a CEO-graphy, a cornerstone of the trade paperback publishing business because the CEOs who write them nearly always sell enough copies to guarantee the publisher a profit. Happily, this CEO-graphy’s key message—that companies now compete based more on how they behave rather than what they make—is delivered with science, wit and skill.
As it turns out, dyslexia or not, Seidman is a talented communicator. And while the Southern California-based author uses as many wave and curve analogies as a surfing anthology, the reality is that his book’s practical stories and examples will resonate with reputation-obsessed corporate leaders who are interested in getting an edge in today’s hyper-sensitive markets.
Seidman starts his journey into “How” by dissecting the case of “Krazy” George Henderson, the Oakland Athletics baseball fan who started sports stadium staple “the Wave.” Henderson’s innovation, Seidman argues, offers business leaders a lesson in how to start a revolutionary movement—what Seidman implies it will take to make many companies behave better.
Among Seidman’s observations is that rating corporate behavior is similar to grading school papers on a curve. In schoolwork, earning an “A” requires synthesizing elements to relate to the bigger picture. But to get up the curve to an “A” from an average “B” often requires going back to a low-average performance, to discover the path to excellence. This book is about how both “A” and “B” players often must suffer through “C”-type results on their way to true industry leadership.
Thankfully, riding all these waves and curves will not leave the reader queasy. Seidman keeps the deep thoughts fresh by offering frequent relief in the form of water cooler anecdotes. My personal favorite is the story of Ralph, the donut cart guy who out-sells his competitors many fold because he trusts his customers to make their own change. Seidman says: trust pays.
While the author’s personal story is rags-to-riches, it is not until the book’s Acknowledgments that we start to understand what makes Seidman run so hard. As a student, the author was the butt of endless jokes for having three diplomas in philosophy, a field not known for its high earning potential. How would all that learning help him earn a living? To those skeptics, Seidman wrote the punch line, “This is ‘How.’”
My guess is that three types of readers will buy “How” now. One is anyone who has worked for more than six months at an executive level in California. As a former Californian, I hear a clear Golden State shading in Seidman’s stories. Another is the corporate responsibility officer or aspiring CRO who will gladly invest the price of a few days’ Starbucks habit to get an edge. And last is the executive of any stripe who knows his or her company has lost its way along the corporate responsibility highway and needs to see “How” to find its way home. “How” is how. -Jay Whitehead
The newest popular business title in the tradition of Thomas Friedman’s “The World Is Flat,” Alvin Toffler’s “Future Shock,” Peters and Waterman’s “In Search of Excellence,” Levitt and Dubner’s “Freakonomics,” Jim Collins’ “Good To Great” and Malcolm Gladwell’s “Tipping Point” is Bruce Piasecki’s “World Inc.”(Sourcebooks, $24.95, available April 2007, see Sourcebooks.com). Once it appears in a month or so, you should buy it, if just to make people think you read it. (Just in case you never get to finish it, though, print out today’s CRO POV and slip it inside the book for that quick pre-cocktail-party refresh.)
“World Inc.” is a manifesto for the corporate responsibility revolution. The book’s heroes are “social response capitalists,” examples of which include leaders at GE, Toyota, HP, S&P, Whirlpool, Tom’s of Maine, Innovest and Suncor. Spurred on by the swiftness of new global market news and the severity of social changes including climate change, energy price hikes and leadership crises, Piasecki makes this sort of corporate responsibility heroism nothing short of the new capitalist imperative.
Piasecki previously wrote a minor 1990 classic, “In Search of Environmental Excellence,” which established his chops as a green guy. And his new journal, Corporate Strategy Today, makes him a made man in the strategic consulting universe. But in World Inc., he breaks out of the shackles of a mere consultant or enviro-dude. He spells out a cohesive world view, including new practices such as “sistering of innovation” among competitors, and a focus on practical realities such as the challenge of building leaders worthy of trust on social leadership issues and measuring success.
For Piasecki, the quintessential “social response capitalist” is Hewlett-Packard’s former CEO Carly Fiorina. For him, Fiorina amplified the enlightened sense of global citizenship that HP’s founders Hewlett and Packard originally built into the company. Fiorina’s leadership, Piasecki claims, is the primary reason that HP is now the world’s largest technology company, having overtaken IBM in January 2007. The fact that 80% of HP brand products are made by outside suppliers, Piasecki says, is testimony to the strength of the company’s globally conscious culture, and reflects its manic focus on high supply-chain labor standards and a tireless search for ever-more-sustainable practices.
This is all good stuff. But as a corporate manager, I want something practical I can use now. This is where Piasecki pulls away from the pack. His last two chapters focus on money measures that matter to the broader corporate markets for talent, product sales and capital. He outlines the financial metrics (P&L, debt, magnifier effect) and customer measures (satisfaction, retention and complaint resolution) that are lagging indicators of effective corporate responsibility practices. He also focuses on the little-mentioned but all-important forward-looking measures, process metrics (cycle time, productivity, multiplier effects such as CST) and employee measures such as satisfaction, development and retention. Without these forward-looking measures, modern companies are managing through a rear-view mirror and face a high risk of being blindsided by a competitive threat.
In an ideal conclusion, Piasecki points out the magical power of comparative ratings and third-party measurement to spur companies to new competitive levels. (I must admit, though, that I have a hard time forgiving the author for failing to mention CRO magazine’s 100 Best Corporate Citizens list as compiled by CRO and KLD Analytics, arguably the most-followed list in the corporate responsibility space.) Starting now, corporate leaders need to know more about how to cost-effectively measure the impact of responsible corporate practices, and what practices or outside services really help companies impact these measures.
In particular, the author highlights the ratings services such as Core Ratings/Fitch/DNV, Value Creation Index, IRRC/ISS, Calvert, Innovest and the granddaddy of them all, the $2 billion S&P unit of McGraw-Hill. These ratings services are bringing the once cottage industry of socially responsible investing, which now represents under 5% of equity investing, to the other 95% of investors. These new-age ratings are now incorporating more intangibles including the hidden value of sustainable practices and assignment of corporate responsibility-related forward-looking risk premiums.
Piasecki’s book reminds me that the difference between a forgettable and a memorable business book is one thing: a hidden and enduring idea suddenly made tangible. In Thomas Friedman’s “World is Flat,” we saw globalization come alive. In “Freakonomics,” we saw the perverse hidden results of out-of-whack incentives. In “Tipping Point,” we saw market hysteria laid bare. In “World Inc.,” we see that demonstrating measurable impact of responsible corporate practices is the secret to moving corporate responsibility from mere “defensive” activities such as compliance and governance to “offensive” strategies that help companies raise capital, sell product and recruit talent. Because we can now see corporate responsibility’s positive impact in the results of HP, GE, Toyota and others, and we can make money if we follow the guidance of corporate responsibility-aware ratings services such Innovest, IRRC/ISS, Calvert and S&P, corporate responsibility is suddenly tangible. Corporate responsibility is no longer merely an aspiration. It is proven. It pays. You can take it to the bank. -Jay Whitehead