content best business books 10

T BOOKS that capitalism — . to modern times. N (Harvard Business (Harvard C . BEST 03 B (Currency Doubleday, (Currency

— (Crown Business, 2003), by Leslie by 2003), Business, (Crown Toxic Emotions at Work: How Work: at Emotions Toxic (Modern Library, 2003), by John 2003), by Library, (Modern

Burnham discordance defined the bat- discordance Burnham – (Perseus Publishing, 2003), by James 2003), by Publishing, (Perseus The Managerial False Prophets: The Gurus Who Created The Gurus Prophets: False The Company: A Short History The Company: A Short of a

Who Really Matters: The Core Group Theory of Group The Core Matters: Who Really When You Say Yes But Mean No: How Silencing How No: Mean But Yes Say You When Beyond Budgeting: How Managers Can Break Free Break Can Managers How Budgeting: Beyond The Orwell In In

School Press, 2003), Jeremy Hope and Robin Fraser and Robin Hope 2003), Jeremy School Press, a newpropose management model that leads to a radi- And two more cal decentralization of managerial power. effects of exercising the negative books investigate power: Compassionate Managers Handle Pain and Conflict Pain Handle Compassionate Managers from the Annual Performance Trap Performance the Annual from Micklethwait and Adrian Wooldridge, tracks the evolu- Wooldridge, and Adrian Micklethwait 3000 tion of the corporation from Revolutionary Idea for Bad Are Their Ideas Why and Management Modern Today Business (Harvard Business School Press, 2003), by Peter J. Frost. J. Frost. Peter 2003), by School Press, Business (Harvard the Framing Debate to begin back in 1941. Con- is useful, however, It notion of the left a favored travening would turn into socialism in Burnham, Conflict Wrecks Relationships and Companies...and What and Companies...and Relationships Wrecks Conflict It About Do Can You Hoopes, takes the management gurus of the past to Hoopes, with the issue of mana- task for failing to deal squarely gerial power. A. Perlow, and A. Perlow, Power, Privilege, and Success Privilege, Power, 2003), Art Kleiner examines the nature of power within of power 2003), Art Kleiner examines the nature organizations. tle lines between the opponents and supporters the opponents tle lines between of man- a field that continues to be creating agerial power, new man- highly regarded Six to this day. fought over state of into the current insight agement books provide the debate. ” and The right “ came in GEME 1984

Animal Farm Animal A of are the reigning prin- the reigning are ” s inspiration for ’ s future. s future. ’ cooperation “ is such a loaded word that it is that is such a loaded word s massive wartime bestseller, wartimes massive bestseller, ’ and ” frequently absent from discussions of man- absent from frequently (pre- agement, especially today when such concepts as sumably antithetical-to-power) ower

Orwell is widely regarded as having been Orwell is widely regarded

George Orwell,George whose centenary birth is being cel- collaboration ciples. Yet every a solid manager must have competent Yet ciples. and any organization use of power, grasp of the effective but also the abuse of power, can be crippled, not only by addition, the role imbalances in its distribution. In by lie at the heart of and legitimacy of managerial power any analysis of capitalism ebrated this year, understood this latter issue particular- understood this latter issue ebrated this year, novels for his two known Best ly well. “ Managerial Revolution: What Is Happening in the World, in the Happening Is What Revolution: Managerial published in 1941 by the John Day Company. Company. Day the John published in 1941 by 1984, by David K. Hurst Destruction Destruction Managerial Weapons Weapons about Communism and Fascism, the two ideological about Communism and Fascism, his writings also have But scourges of the 20th century. of capitalism, for what is less a lot to say about the future is that Orwell known well

part his deep antipathy to the central message of from Burnham James

P MAN

su 33 issue strategy+business … The John agency “ ” the rule of right “ The Company, The Modern Corporation The Modern as it came to be known, was as it came to be known, ” s seminal work in the process. s seminal work ’ (Commerce Clearing House, (Commerce writers for the U.K. weekly writers for the U.K. weekly — problem, Micklethwait and Adrian Wooldridge and Adrian Micklethwait in a mar- perspective supply a broader survey, compact, well-written velously 1932), by Adolf A. Berle and Gardiner Berle A. Adolf 1932), by this monumental classic, In C. Means. which is still in print, the duo offered data to document statistical extensive the decline of the individual and the rise of the owner/proprietor The separation of owner- corporation. the or control, ship from consequences that profound to have In continue to play out to this day. their new book, show that from the beginning the corpora- that from show In the modern corporation the decisive the modern corporation In

“ ” — The authors Managerial power did not meet this test, Drucker did not power Managerial Indeed, over the centuries there seem to have been seem to have centuries there the over Indeed, framing Berle and Means framing Berle their subjects, indicating that the lack of such justifica- lack of such that the indicating subjects, their suggest- Drucker tyranny. lead inevitably to tion would brute force society, a functioning, sustainable ed that, in had to be exer- normal times power In resort: was a last he defined as which cised as authority, over might. over suggested: no one from the managers, is derived that of power, to no nobody and nothing and responsible by controlled unfounded, unjusti- is in the most literal sense one. It power. and irresponsible fied, uncontrolled, Corporate Power Corporate in Power Society and Peter Burnham early writings, both James their In heavily upon drew Drucker Economist tion has been both an economic and a political animal: incontestable, are The economic benefits it has delivered but its political legitimacy has always been a problem. and abuse, success, excess, of innovation, cycles several These cycles political outrage and reform. by followed either the exploitation of new by often catalyzed were metals) or the and precious (spices, slaves, resources emergence of new and technologies (canals, railroads, most are cycles These communications technologies). the economic in the U.S. and the U.K., where marked in America has been emphasized, of the corporation role of consideration of its political almost to the exclusion seem less noticeable in contrast, these cycles franchise. In and Private Property and Private To “ (John Day Defenders of Defenders published in is can be read as a can be read doublethink: like sociologists ” contended that both that contended (John Day Company, (John Day 1984 the de facto control of control the de facto — followers, s notion of The End of Economic Man: A Man: of Economic The End ’ “ s lack of concern for the ethical ’ dynamics were changing into changing were dynamics Revolution, The Machiavellians, The Machiavellians wrote Burnham. wrote

” the managers won. the managers won. ” — The Future of Industrial Man of Industrial The Future BOOKS The leaders must profess, “ Indeed, the whole of Indeed, s next book, ’ ” , and Burnham

Orwell concluded that Burnham rather approved of rather approved Orwell concluded that Burnham It is but a short this step from It The subtitle of

although they had to pretend that although they had to pretend The leaders, if they themselves are The leaders, if they themselves the factors of production and the exercise of power by of power and the exercise of production the factors Thus, or workers. rather than shareholders managers of this for the use the rhetorical justifications although was societies, the result across differed might have power always the same this development and accused him of both cowardice and accused this development by seemed bolstered charges that worship, and power Burnham what he called managerialism managerialism what he called Study of the New Totalitarianism of the New Study “ scientific, must lie. chilling thought to Orwell indeed foster, belief in the myths or belief in the myths indeed foster, the fabric of society will crack and they will be overthrown, 1943 by the John Day Company. In it, Burnham argued it, Burnham In Company. Day John the 1943 by eyes the at the evidence through that, when one looked and his of Machiavelli democratic self- Pareto, Vilfredo and Michels Robert ideal: All societies and was an unattainable government inherently were social movements was of necessi- stratified and all power and fraud. Although ty based on force in the the masses might need to believe myths, their leaders and other mem- bers of the elite, who studied the evi- could not believe dence scientifically, — they did. Freedom issues distressed not only Orwell but also Peter Drucker, not only Orwell but also Peter issues distressed at about the who had begun his American writing career In same time as Burnham. know and not to know, to be conscious of complete and not to know, know constructedtruthfulness lies, to while telling carefully hold simultaneously two opinions which cancelled out, them to be contradictoryknowing and believing in both of them. 1939) and underlined the need for the 1942), Drucker Company, to justify their behavior as benefiting wielders of power

cautionary tale on what organizations look like if mana- is unchecked. gerial power BEST 03

content best business books 11 content best business books 12

BOOKS bad for busi- “ BEST 03 Distinguished Professor of History Professor Distinguished all of a sudden the organization is all of a sudden the — False Prophets, False because, through superfi- because, through Core Groups are inherently neither good nor bad, inherently are Groups Core In ” James Hoopes of Babson College examines the writings of Babson Hoopes James to Taylor of eight management experts, Frederick from ways in which they the various and shows Drucker, Peter either duck or finesse the question of managerial power. been makes a compelling case that these writers have He that cultures much happier expounding on integrative and on the the ordinary, to go beyond workers empower high performers, virtues plans that reward of incentive argues, Hoopes and threat. than talking about coercion that this bias has been less convincingly, ness cial talk about the possibility of Group. Nevertheless, the Core Group is real: It is the It is real: Group the Core Nevertheless, Group. wants mind, and its of the organizational embodiment will the organization amplified so that are and needs way of describing Kleiner has an eloquent meet them. a Core a member of such like to become what it feels in love organization falls he writes, as if the is, It Group: This is no passing fancy but a deep, with the individual. headlong passion showering you with money and perks and giving you with money and perks you showering The individual is usually secrets. access to its innermost such a power- to resist off his or her feet, helpless swept ful seduction. a fact of organizational life and are Kleiner suggests; they is to make sense of a complex essential if an organization Core however, world. Like the individuals in them, The the potential for both good and evil. have Groups expan- more argues, are the author Groups, better Core and membership in in their spread, and inclusive sive other characteris- them is based on merit rather than on cites Springfield tics, such as gender and race. He and its open-book Company (SRC) Remanufacturing of an Expanded- style of management as an example everyone has access to organization where Core-Group and the accessibility of This transparency, the numbers. of performance of cause and and the webs the measures them, would seem essential to the effect that produce as legitimate. acceptance of managerial power ” s the care and feed- s the care ’ management consultant — and a political animal. Its political a book that began as a series of — The Customer Comes Eighth. The Customer legitimacy has legitimacy always been a problem. “ Micklethwait and Micklethwait show that Wooldridge operations in what was to become the operations in what the corporation the has corporation been both an economic strategy+business s East India Company and the brutalities Company and of the s East India ’ s first priority, or, as Kleiner puts it in the title of as Kleiner puts it in the or, s first priority, ’ From their high-level perspective, Micklethwait and Micklethwait perspective, their high-level From Although the Core Group is present in every is present organ- Group Although the Core Who Really Matters Who Really articles in requires that they be modular and hierarchical in struc- that they be modular and hierarchical requires of people will inevitably be an elite group There ture. for the performance of the who assume responsibility will be applied. whom power organization and through In The complexity and scale of most modern organizations The complexity and scale of most modern The Managerial Elites concessionaire Germany and Japan, where corporations are far more are corporations where and Japan, Germany process. and the political in the community embedded on social pressures economic and As the current social stability however, indicate, and Japan Germany econom- at the price of reduced been bought may have to change. response and a sluggish societal ic benefits of corporate the latest crop by unfazed are Wooldridge just partThis is of the cor- of the evolution shenanigans. of with the bloody excesses poration, and compared England Belgian Congo, the misdeeds of Enron and WorldCom and Enron Congo, the misdeeds of Belgian extract mil- can today if executives do seem trivial. But with- and employees shareholders lions of dollars from Why to such mayhem, the question is, out resorting would they bother? Art Kleiner writes for organizational insiders about this found in every specimens of which are institu- group, does not Group, The elite, which he calls the Core tion. necessarily consist of managers alone, although they usually make up the majority of it. It ing of this Core Group that is far and away the organi- Group ing of this Core zation his opening chapter, his opening chapter, ization, its existence may be shadowy and even undis- and even ization, its existence may be shadowy to admit that any- cussable, with managers reluctant actually exists. the formal structure thing beyond of the members Kleiner suggests that up to 95 percent contractual relationship a purely of an organization have not members of the Core with the establishment and are

su 33 issue strategy+business with — rather than — is among the forecasting of results and the manage- and the of results the forecasting — As every the traditional knows, critic of budgeting The authors emphasize that their proposal is not that their proposal The authors emphasize The authors make two key recommendations: The The authors make two key recommendations: s power structure, so we have been warned! have so we structure, s power ’ consultant Robin Fraser show managers how to aban- how managers show Fraser Robin consultant the whole performance and improve don budgeting process. management organizational two incompatible confounds approach purposes ment of performance. The contradiction between these between The contradiction ment of performance. in the busi- the change by two aims has been dramatized contin- steady, one of relatively from ness environment financial capital dominated, to uous change, where discontinuous change, where one of unpredictable, its budgeting, with Traditional intellectual capital rules. targets to fixed geared incentives emphasis on lockstep and payouts to bizarre has led into the future, projected behavior on the part aberrant of executives, increasingly gaming of the performance widespread ranging from management system to outright fraud. about new metrics but about a whole new management adaptive more model that leads, at a minimum, to the organization and, at a maximum, to within processes Every power. a radical decentralization of managerial to change escalates that resistance change agent knows an organiza- rapidly any time one talks about changing tion first is for firms to move from future-oriented, absolute future-oriented, from first is for firms to move performance contracts to arrangements whose payoff assessment of performance depends on a retrospective key performance to benchmarked indicators relative of the need for solid the second is to take care (KPI); Thus managers set forecasts. numbers with rolling goals based on external comparisons stretch industries or competitors, for example not con- are These targets internally negotiated targets. based on the are Rewards to incentives. nected directly decided and are success of the team or group relative after the fact, which discourages gaming and encourages coopera- creation, managers to focus on continual value communi- open business units, and timely, tion across the conditions short, it creates cation and feedback. In ” — Beyond moral ’ show me show “ on the part — notably by Peter notably by — to convey to the convey glandular experience Toxic Emotions at Work Toxic manipulating culture and by and culture manipulating to managers appealing of the phenomena it describes. emotional intelligence emotional intelligence — s yardstick for democracy is Thomas for democracy is s yardstick ’ the few the management few books able are unlikely to succeed. If, as Hoopes sug- as Hoopes unlikely to succeed. If, are BOOKS and Hope Jeremy management researcher retrospective and provisional. Hoopes has no Hoopes and provisional. retrospective — s agrarian idealism, an unrealistically tough an unrealistically s agrarian idealism, ’

— Hoopes

Budgeting, vanity, writers may blind managers to the inherently may blind managers writers vanity, its and power of managerial nature undemocratic of free- our social values contradiction of fundamental to needed, according What is equality. dom and of managerial on the reality emphasis is more Hoopes, and self-awareness in corporations and more power moral humility of those who wield it. of those who wield a performance trap and a tool for repression. In In a performance trap and a tool for repression. Managers usually say that they employ power only in power usually say that they employ Managers The organizational performance. the cause of improving primary tool for performance management at most And the control organizations is the budgeting process. it the allocation of and through of this process, of managerial potent sources themselves are resources, the know, as many employees Unfortunately, power. of budgets is often a dysfunctional ordeal preparation Power and Power Performance Jefferson variety variety suggestions to make, either on this issue or on the suggestions to make, either on this would Many of corporate governance. issue broader and that the power can control argue that only power checks and balances on the continuing glob- appropriate to be discovered. remain in corporate power al growth for managerial power can be its superior performance. for managerial power such performance, in measuring the problems Given the any such legitimacy must always be of Drucker Drucker and manage- democracy to make us free need gests, we only legitimacy rial capitalism to make us rich, then the

standard against which all political institutions, past and which all political institutions, past against standard would fail to measure let alone corporations, present, case that attempts make a strong he does However, up. with social legitimacy on managerial power to endow it uses the basis of the processes BEST 03

content best business books 13 content best business books 14 s ’

BOOKS organiza- ” BEST 03 poisoned “ s targets to the core issues. The issues. s targets to the core ’ is among the few management The second of the books dealing actions that challenge the organiza- a position of authority and by restrict- a position of authority and by ing one objective of the pattern-breaker is to the pattern-breaker of objective turning seek mutual understanding by difficult situations and devel- around There oping the support of others. does but Perlow nothing new here, a serviceher readers dramatizing by the pervasiveness of organizational silence and the damage that it can do. with managing conflict and the nega- Peter is by of power consequences tive of Kaiser Professor F. the Edgar Frost, on the Behaviour Organizational — actions ” The feelings this arouses are not pleasant: The book not pleasant: are The feelings this arouses The antidotes to endemic silence suggested by The antidotes to s norms, and obviously this is done more easily from this is done more s norms, and obviously ’ s feelings that is the hallmark of the abuse of power. s feelings that is the hallmark ’ deviant books able to convey to the reader the glandular experi- to the reader books able to convey ence of the emotional phenomena it describes. consists of series of vignettes of Toxic Emotions at Work at Emotions Toxic tions, unrelieved by any lighter moments. Because he any lighter moments. Because by tions, unrelieved emotional pollution to be systemic in human believes and deals less with the causes of organizations, Frost for this pollution than with the handling of the cures people he calls by symptoms of organizational toxicity, the handlers. Reading toxin book is a bit like stepping into about a dot-com startup a dot-com about observed she as her capacity in life cycle its entire With ethnographer. an organizational firm goes the years, into a space of two compressed birth, stages of conception, the well-known through with bewildering decline, and death maturity, takeoff, do not have made that are each stage, decisions speed. At but con- Group, Core the entire the commitment of the Indeed, let alone confronted: voiced, rarely cerns are the prob- exacerbated to have to go fast seems pressure then sud- and drifts, at first slowly The company lem. into bankruptcy. denly, the break has to science. Someone not rocket are Perlow and only a person changing his organizational pattern, This will require do this. behavior can or her own “ tion Faculty of Commerce at the University of British at the University of Commerce Faculty image of pollution to uses the powerful Columbia. He visceral book about the damage cre- a far more produce the insensitivity to other peo- ated in organizations by ple desirable “ silence begets — Leslie Perlow, an assis- Leslie Perlow, s book is a compelling story ’ learning stops at both the individ- s organization is a ’ — rather than as to-do items. The authors have items. rather than as to-do ” Hope and Fraser make it clear that radical decen- make it clear Fraser and Hope been made these have like Recommendations The use and abuse of power is not the only cause of The use and abuse of power The core of Perlow The core When You Say Yes But Mean Yes Say No, When You Managing Power Managing Plays Power both legitimate of power, The exercise and illegitimate, can damage people and organizations in many ways. documented these effects are of Some management books. In in two recent model of clarity, and every chapter has model of clarity, helpful summaries. outcomes everygiven a good manager who is serious about change and rationale to go process place to start and an excellent with it. Radical decentralization mini- of managerial the accumulation mizes organizations and, at the top of power creat- avoids its transparency, through can be ing contexts in which power abused. The book for learning within the business context. context. the business within for learning model potential of their is essential if the full tralization centralist tenden- the how They show is to be realized. such as undermine tools, budget model can cies of the and customer benchmarking, scorecard, the balanced designed to support that are management, relationship decentralization demands a Such troops. the frontline framework clear principles and that has new governance local decision making, a high-per- boundaries to guide to decide at the local level, formance climate, freedom and so on. information culture, an open and ethical as across come they have but too often before, organizational silence, but it is probably the leading one. organizational silence, but it is probably impose and encourage contexts and cultures Various egalitarian organizations, for example, silence: Many members refrain norms of politeness, where develop silence can discussing issues that divide them. Such from perpetuate itself in a vicious spiral tant professor at Harvard Business School, discusses the Business at Harvard tant professor of conflict with- of silence and the suppression problem in organizations. of organizational its causes, the result Whatever silence. silence is the same ual and group levels, because people, cut off from time- people, cut off from because levels, ual and group to measures unable to take corrective ly feedback, are deal with identifiable problems.

su 33 issue strategy+business Financial , the Crisis & Renewal: (Harvard Business (Harvard (Free Press, 2002). A Press, speaker (Free Learning Learning from the Links: Mastering + Harvard Harvard Business Review , is the author of ([email protected]), a ([email protected]), contributor to regular , and other leading business publications. Power is needed in organizations at all times, but at all times, in organizations is needed Power Orwell understood this linguis- George would have and fury, but perhaps the resulting debate will help will help debate the resulting perhaps but fury, and organizations in power of managerial the role us clarify and talk about it plainly it easier for us to and make alerting its use is being the occasions when us to openly, concealed. will always be the tough, there really when the going gets at to achieve to use raw power temptation for managers — while least part reward — personal of their objective We alibis. intellectual high-flown cloaking its use with in the this process become all too familiar with have and collapse of firms like Enron aftermath of the together elaborate rationalizations, where WorldCom, used to intimidate crit- were power, with the use of raw ics and hide wrongdoing. mass of … words completely: “A process tic cover-up blurring the outlines falls upon the facts like soft snow, enemy of clear The great up all the details. and covering is a gap between When there language is insincerity. aims, one turns as it were declared and one’s real one’s and exhausted idioms, like a to long words instinctively cuttlefish squirting management writers can ink.” If that masks power, of language help us strip away this veil indeed. it will be progress and writer on management, Mr. Hurst and also writer wrote on management, Mr. Times David K. Hurst strategy+business Meeting the Challenge of Organizational Change Management Using Lessons from Golf School Press, 1995) School and Press, was a visiting scholar/practitioner at the N.C., Center Leadership for in Creative in Greensboro, 1998–99. His writing has in appeared appearing in organi- ” the organizational equivalent of equivalent the organizational The emergency room: a hospital Chief Toxin Handler Chief Toxin

BOOKS “

If you are a toxin handler, or if your organization your or if handler, a toxin are you If The virtue and ana- of this book is that it highlights If Huntington is correct, the coming battle will is correct, Huntington If

needs one (and every Frost organization needs several), he handler, toxin As a for you. advice has some excellent up with pain and follows and your role names your practice, some conduct your to sound counsel on how in the physical world. handlers toxin of it based on real work should never handlers toxin Thus he says that expe- with more alone, and newcomers should be paired rienced partners; handlers should be protected toxin flexible schedules and deadlines that rec- harm by from and the double duty they are special role their ognize to recov- breaks handlers need regular toxin doing; lastly, also empha- rigors of their activities. Frost the er from handlers, like top toxin for effective the necessity sizes performers their phys- in any field, to continually build ical, emotional, mental, and spiritual capacities. and formalizes organizational problem an endemic lyzes the emphasis on it. However, the task of addressing rather than on fundamental preven- symptomatic relief see will means that it is unlikely that we tion and cure the job of toxin handlers battle away bravely, like so many ER sur- like so many bravely, handlers battle away toxin in the and well-being their health geons, sacrificing is little satisfaction there unlike in the ER, But process. organizations to health. sick and damaged in restoring handlers strugglemanagers The toxin insensitive while drip poison. systems continue to and flawed zations anytime soon. make everything look like mere before that has gone of sound will be a good deal doubt there skirmishes. No The respected political scientist Samuel Huntington has Huntington political scientist Samuel The respected and suspicion of suggested that opposition to power of embodiment as the most dangerous government themes of American political the central are power with its absolute moral creed, The American thought. egalitarianism, and democracy, of universalism, values outbursts of what he in regular individualism, results passion, when institutions and their officials calls creedal possi- that they cannot held to puritanical standards are is suggests that because power bly meet. Huntington the seen as corporate rather than governmental, now against the next period of this passion could be directed corporate sector. Power and Power the American Creed BEST 03

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