Donald Keough’s book “The Ten Commandments for Business Failure” is an interesting, creditable book useful to Chief Executive Officers with a company culture that needs improvement. Donald Keough is the former President of The Coca-Cola Company.
The book is a short, easy read that covers all the elements of a positive culture. Some of it is self-evident. But if officers, second and third tier managers all read it, it would contribute to a re-focused culture. It would put everyone on the same page.
Commandments that lead to business failure:
One:
Quit Taking Risks
Two:
Be Inflexible
Three:
Isolate Yourself
Four:
Assume Infallibility
Five:
Play the Game Close to the Foul Line. (i.e., a culture of self-dealing and corruption.)
Six:
Don’t Take time to Think
Seven:
Put All Your Faith in Experts and Outside Consultants
Eight:
Love Your Bureaucracy
Nine:
Send Mixed Messages
Ten:
Be Afraid of the Future
Eleven*:
Lose Your Passion for Work – for Life
(*The title of the book is “Ten Commandments…”. Mr. Keough has included an Eleventh as “a little added bonus”.)
Showing posts with label Books. Show all posts
Showing posts with label Books. Show all posts
Friday, October 14, 2011
Thursday, May 20, 2010
Peter Drucker's Tenets
Peter Drucker, a writer of 39 books and a management consultant, was considered the “father of modern management”. An avid student of managing complex businesses, he was the advisor who helped mold many corporations into industry leaders which forged this country’s ability to become an economic super power.
A Sampling of Mr. Drucker's Tenets:
“In most business failures, the board was the last to realize that things were going wrong.”
“Managers should make a decision no later than you need it, but as late as possible, because you always have more information.”
“Do reported profits exceed the cost of capital? Review and audit capital allocation decisions of the past year.”
(I suggest random sampling of capital expenditures for prior years and reviewing several to determine if the forecasted return on investment was achieved.)
“Above all management is responsible for producing results. Profit is a requirement for a company…profitability is not the purpose but rather the test of their validity.”
“Management is about human beings. Create an atmosphere where people are permitted to make mistakes.”
(His simple advice to clients: “It’s all about the people.” He was concerned with retaining “knowledge workers” which today most companies describe as the “A” level employees.)
“Never promote an employee on the basis of his or her potential, but based only on performance.”
“Picking a leader: would I want my son or daughter to work under that person?”
Source: “The Daily Drucker” by Peter Drucker, 2004
A Sampling of Mr. Drucker's Tenets:
“In most business failures, the board was the last to realize that things were going wrong.”
“Managers should make a decision no later than you need it, but as late as possible, because you always have more information.”
“Do reported profits exceed the cost of capital? Review and audit capital allocation decisions of the past year.”
(I suggest random sampling of capital expenditures for prior years and reviewing several to determine if the forecasted return on investment was achieved.)
“Above all management is responsible for producing results. Profit is a requirement for a company…profitability is not the purpose but rather the test of their validity.”
“Management is about human beings. Create an atmosphere where people are permitted to make mistakes.”
(His simple advice to clients: “It’s all about the people.” He was concerned with retaining “knowledge workers” which today most companies describe as the “A” level employees.)
“Never promote an employee on the basis of his or her potential, but based only on performance.”
“Picking a leader: would I want my son or daughter to work under that person?”
Source: “The Daily Drucker” by Peter Drucker, 2004
Wednesday, September 16, 2009
Sun Tzu - “The Art of War”
Sun Tzu’s book “The Art of War” was written in 400BC. Peter Drucker’s and Sun Tzu’s management tenets for success are essentially the same.
Sun Tzu was China’s first professional General. Prior to him the Sovereign (i.e., King) led his army which was frequently disorganized, under-funded and unsuccessful. He developed strategy and tactics of war but also detailed financial budgets, manpower required, basic training and logistics (e.g., the number of helmets, chickens)
It is a surprisingly practical manual of war with basic advice, such as: “Dust spurting upward in high straight columns indicates the approach of chariots.” “There are five methods of attacking with fire. The first…, the second…”.
In his tenets listed below, I suggest as helpful guidelines for substituting a Board of Directors, an Owner, a Ruler, or a Chief Executive Officer.
Sun Tzu was China’s first professional General. Prior to him the Sovereign (i.e., King) led his army which was frequently disorganized, under-funded and unsuccessful. He developed strategy and tactics of war but also detailed financial budgets, manpower required, basic training and logistics (e.g., the number of helmets, chickens)
It is a surprisingly practical manual of war with basic advice, such as: “Dust spurting upward in high straight columns indicates the approach of chariots.” “There are five methods of attacking with fire. The first…, the second…”.
In his tenets listed below, I suggest as helpful guidelines for substituting a Board of Directors, an Owner, a Ruler, or a Chief Executive Officer.
1. “There are five qualities that are dangerous in the character of a general..."Basically his book describes the development and execution of a strategic plan. His emphasis on doing the unexpected is a synonym for Peter Drucker’s innovation.
"These five traits of character are serious faults in a general and in military operations are disastrous.”
- "If he is reckless..."
- "If he is cowardly..."
- "If he is quick-tempered, he is obstinate and hasty - does not consider difficulties. The essential temperament of a general is steadiness..."
- "If he is defensive. One anxious to defend his reputation pays no regard to anything else..."
- "If he is too much of a humanitarian..."
2. “The ways in which a Ruler may bring misfortune upon the army is by interfering with its administration and operations. He whose generals are able and not interfered with by the Sovereign will be victorious. There are occasions when the commands of the Sovereign need not be obeyed.”
3. “If one ignorant in military matters is sent to administer the army, then every movement will be hamstrung. This engenders doubts in the minds of the officers. A confused army leads to another’s victory.
4. “He whose ranks are united in purpose will be victorious. Thus, command them with civility and imbue them uniformly with martial ardor and it may be said that victory is certain.”
5. “And therefore the general who in advancing does not seek personal fame, and in withdrawing is not concerned with avoiding punishment, but whose only purpose is to protect the people and promote the best interests of his Sovereign, is the precious jewel of the state. Few such are to be had.”
6. “It is the business of a general to be serene and inscrutable, impartial and self-controlled. If serene he is not vexed; if inscrutable, unfathomable; if upright, not improper; if self-controlled, not confused.”
Monday, December 22, 2008
India – What Hinders Its Development?
Some thoughts on the interesting book “In Spite of the Gods – The Strange Rise of Modern India” by Edward Luce, the Financial Times' Washington Bureau Chief. He worked and lived in India for years.
While his conclusion is that India will become an economic super power, its many negatives will delay its development.
Some of the negatives:
Its massively ineffective and corrupt "quasi-socialist" political system.
Labor laws are too restrictive, cannot fire or lay off any employees, even if they are criminals, which supports the case for outsourcing only and not investing in 100% owned operations.
Literacy in China is 90%, in India it is 65% - female literacy is 48%. Focus in India is on university education, not elementary school education which China has focused on to build a viable work force. By comparison, the USA's literacy rate was 90% during its industrial and economic ascendancy in the 1800s.
India lacks investment in infrastructure, just starting to build roads and highways.
Bulk of population lives in small villages, not an urbanized country most developing countries tend toward. Of 1 billion population, 750 million live in small villages.
People are not motivated to seek a better life, caste system is an obstacle, lack of ambition somewhat stifled by elite strata which are still very British oriented.
Corruption is pervasive and extensive. Bribes are commonplace.
A telling difference between China and India is that China has accepted capitalism. Surprisingly for China's controlling government, its economy is based on market-driven industrialization. India has not accepted capitalism with its over-regulated private sector which is a draw back to growth and development.
An interesting fact:
India's police have "encounter specialists" which are policemen who kill criminals the police decide are guilty - prior to a trial. India has a 27 million criminal and civil case backlog. Police kill criminals because evidence gets lost, witnesses die, low-paid judges are easy to bribe and it takes too long for cases to come to trial.
While his conclusion is that India will become an economic super power, its many negatives will delay its development.
Some of the negatives:
Its massively ineffective and corrupt "quasi-socialist" political system.
Labor laws are too restrictive, cannot fire or lay off any employees, even if they are criminals, which supports the case for outsourcing only and not investing in 100% owned operations.
Literacy in China is 90%, in India it is 65% - female literacy is 48%. Focus in India is on university education, not elementary school education which China has focused on to build a viable work force. By comparison, the USA's literacy rate was 90% during its industrial and economic ascendancy in the 1800s.
India lacks investment in infrastructure, just starting to build roads and highways.
Bulk of population lives in small villages, not an urbanized country most developing countries tend toward. Of 1 billion population, 750 million live in small villages.
People are not motivated to seek a better life, caste system is an obstacle, lack of ambition somewhat stifled by elite strata which are still very British oriented.
Corruption is pervasive and extensive. Bribes are commonplace.
A telling difference between China and India is that China has accepted capitalism. Surprisingly for China's controlling government, its economy is based on market-driven industrialization. India has not accepted capitalism with its over-regulated private sector which is a draw back to growth and development.
An interesting fact:
India's police have "encounter specialists" which are policemen who kill criminals the police decide are guilty - prior to a trial. India has a 27 million criminal and civil case backlog. Police kill criminals because evidence gets lost, witnesses die, low-paid judges are easy to bribe and it takes too long for cases to come to trial.
Monday, March 6, 2006
A Helpful History Book For CEOs
I came across an impressive book, which would be very helpful to any CEO. It is an interesting historical effort and was referenced in a footnote of a best selling business book “Good to Great”. It proved to be a better book on management in my opinion, than the popular business publication.
Barbara Tuchman wrote “The March of Folly”. In the work, she reviews four historical debacles. The reasons for these past failures, was primarily due to “wooden-headedness and cognitive dissonance”.
Ms. Tuchman's essential definitions:
The British Generals who had been in the Colonies were essentially opposed to a land war, but there was no “cross functional” type communication and their advice was not heard.
The King and the Parliament believed America was small, populated with criminals and other worthless people. In fact it had a population of 2.5 million, was an economic locomotive populated with many well-educated and independent people.
The taxes the British levied totaled only 50,000 pounds sterling annually. Imports from Britain into the Colonies totaled 3 million pounds sterling annually, one-half of which were lost when Americans boycotted British goods.
Completing their homework in a hands-on manner would probably have caused Britain to handle the situation differently and retain America as one of its Colonies.
“Good to Great” by James Collins is the book that referenced “The March of Folly”. Worthwhile reading, it studies how companies built themselves into great companies.
Characteristics of successful companies:
Barbara Tuchman wrote “The March of Folly”. In the work, she reviews four historical debacles. The reasons for these past failures, was primarily due to “wooden-headedness and cognitive dissonance”.
Ms. Tuchman's essential definitions:
“Wooden-Headedness”: the source of self deception, assessing a situation in terms of preconceived fixed notions while ignoring or rejecting any contrary signs – acting according to wish while not allowing oneself to be deflected by the facts, the refusal to benefit from experience.This book gives meaningful perspectives on:
“Cognitive Dissonance”: reject objective evidence and rigidly hold on to strongly held beliefs regardless of rationality of disproof.
“Folly”: the obstinate attachment to a disserviceable goal.
- How to manage,
- Why open and cross-functional communication is important,
- Hubris,
- The true meaning and benefits of “hard-work, homework, hands-on”.
The British Generals who had been in the Colonies were essentially opposed to a land war, but there was no “cross functional” type communication and their advice was not heard.
The King and the Parliament believed America was small, populated with criminals and other worthless people. In fact it had a population of 2.5 million, was an economic locomotive populated with many well-educated and independent people.
The taxes the British levied totaled only 50,000 pounds sterling annually. Imports from Britain into the Colonies totaled 3 million pounds sterling annually, one-half of which were lost when Americans boycotted British goods.
Completing their homework in a hands-on manner would probably have caused Britain to handle the situation differently and retain America as one of its Colonies.
“Good to Great” by James Collins is the book that referenced “The March of Folly”. Worthwhile reading, it studies how companies built themselves into great companies.
Characteristics of successful companies:
- Disciplined focus,
- No hubris,
- Openness in that everything is discussed,
- A self-effacing CEO only interested in the company’s success - who is not a tyrant,
- Accountability for tangible results,
- Staff the right people – wrong people get fired,
- Only deal in brutal facts and truth, simplicity,
- A culture of freedom and responsibility,
- Have defined what the company is “best” at.
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