The Essential Drucker – Peter Drucker

The fundamental task of management is to “make people capable of joint performance through common goals, common values, the right structure, and the training and development they need to perform and respond to change.” – Essential Drucker

Why did the Allies win World War 2? They had longer supply lines, a smaller population, and lower production of war material. For Drucker, the victory was because of management. The Allies won because they could make better use of the resources they had.

The Essential Drucker a collection of some Drucker’s key essays and ideas, conveniently collected into a single book. It is an old book, and at some points that shows, particularly in the examples he uses. An amazing number of modern management books just recycle his ideas, though. In part, that’s because of Drucker’s tremendous span: the book covers management in the broadest possible way, from managing yourself and your time to large organizations and even society. The book goes from arguing management is a liberal art to suggesting the single largest reason for an organization’s decline is a failure to innovate; that if someone doesn’t perform, it is the failure of the person who put them in the wrong place, not the failure of the person who is there; and that effectiveness is only poorly correlated with intelligence.

Perhaps the strongest chapter for me was the one on managing your own time. Drucker argues most of us have no idea how we spend our time. He suggests everyone should allocate a week to keep a time diary, recording exactly what activities they spend their time on. It’s a surprise. When you know how your time is spent, though, you can make it more effective. Rather than spending 15 minutes on something here and there, you can consolidate, streamline, and improve.

If you’re someone just starting in a management role, The Essential Drucker is a perfect book to begin. Broad, sweeping, and you can pick the sections you like and read the rest of Drucker’s work on the subject.

The Lean Startup – Eric Ries

“It’s moving leaders from playing Caesar with their thumbs up and down on every idea to—instead—putting in the culture and the systems so that teams can move and innovate at the speed of the experimentation system.” – The Lean Startup

Regular readers will note I’ve been offline for a while – my apologies.

Say you have 100 envelopes to address, stuff, and seal. What do you do? Most people would address them all, fold them all, seal them all, etc. Sadly for most people, this is wrong. It is actually faster to do them one at a time! (there is video evidence, honest). Why? Because moving 100 envelopes around is cumbersome, and takes time. Rather than moving piles repeatedly, it’s better to do them in a small batch. Doing them step by step may improve individual performance, but the system performance is bad. In fact, even if it took the same amount of time, the usual method is risky. What if you address all 100 envelopes, and realize the letters don’t fit?

What’s the point? Businesses should do the same. Rather than coming up with an amazing idea, building huge factories, developing vast numbers of the product, and selling them all at once, companies should try to be in continuous deployment. They should be releasing dozens of small changes per day and testing them on small groups of consumers.

The defining feature of a startup, says the Lean Startup, is uncertainty. They aren’t sure who their customers are or what they need. As a result, the key resource is information. Startups must therefore focus on learning above all else. To do so, they need to experiment, try new things, and piece together an awareness of what their context is all about. From that insight, all else in the book flows: that startups should have fast cycles, small batches, develop minimum viable products, etc.

It’s a powerful insight, and one that firms, governments and individuals are usually terrible at. Even in our own lives, it probably doesn’t make sense to come up with a single huge master plan. Rather, we should try new things, experiment, and see if they work for us. If we do, we can do more. If not, we can do something else. Life, as with startups, is all about learning.

Overall, I’d highly recommend the lean startup. A powerful insight into life and business.

The Upside of Stress – Kelly McGonigal

“The stress response is more than a basic survival instinct. It is built into how humans operate, how we relate to one another, and how we navigate our place in the world. When you understand this, the stress response is no longer something to be feared.”

When you speak in public, do you get nervous beforehand or excited? McGonigal points out the physiological response is identical: the difference is purely in our mindset and how we interpret it. That’s why college athletes get excited before games but nervous before exams. Our mindset then induces a different response to the stress, which affects our psychological and physiological state: a fear response, which is what most of us think of with stress, or a challenge response, where our performance improves to meet the challenge.

The point is that how we think about stress matters. If we think it’s bad, it will be. Shifting our mindset, though, is often enough to change stress from bad to good. In 2008, for example, telling bankers being stressed was good for them reduced anxiety and health problems and increased productivity and collaboration.

McGonigal acknowledges the research that shows anxiety or worry is bad. She certainly isn’t suggesting that struggling to find enough to eat is somehow an advantage. She points out, however, that much of that research is done with stressors that are paramount to torture: rats who get electric shocks, for example. Much of what we encounter in life, though unpleasant, is not clearly comparable. Instead, the evidence on mild stress is mixed; monkeys separated from their mothers for a day actually showed more curiosity and self-control later on.

The evidence is mixed, and it may well depend on the person. The next time you feel stressed, though, remind yourself it isn’t all bad, and can even be good. It can’t hurt, and it might help!

We don’t make Widgets – Ken Miller

“Government is a bunch of hardworking people, trapped in dysfunctional systems, who produce invisible things for people who do not want them, on behalf of others who do, for reasons we rarely articulate and can hardly measure.”

Most government employees—perhaps most employees, these days—would say they don’t make widgets. They provide services, help others, and answer questions. Fair enough. But, says Ken Miller, they have the wrong idea of widgets. An answer can be a widget; so can a service. A widget is anything created by work which can be given to someone else to achieve a desired outcome.

Ken Miller outlines three myths that hinder the improvement of government. One, governments don’t make widgets; two, governments don’t have customers; three, governments aren’t there to make a profit. In a literal sense, these are all plausible. Believing them, he argues, can also prevent government from learning and improving.

If everyone is making widgets, everyone is a plant manager. The analogy, says Miller, can provide useful insights, regardless of whether it is literally true or not. If a widget plant is to improve, it must make widgets better, make better widgets, or make new widgets that lead to better outcomes. The same three areas are where government can improve. Those three things are also the key areas to measure. Every manager needs to know how good their process is, how good their product is, and whether they can make better products to better meet the needs of their customers.

The analogy can sometimes be taken in the wrong way. Serving customers isn’t the same as doing whatever they want: Ford doesn’t give away free cars, even though customers might want them to. In the same way, having oil companies as customers doesn’t mean doing what they want. It means acting in the interests of shareholders, in this case taxpayers, and regulating them for the benefit of all.

The book is short, clear and compelling, a summary of how the private sector perspective can benefit governments. Of course, that isn’t the end of the story, and such a perspective can also go too far. Government is different from the private sector. Innovation, however, comes from interdisciplinary work, and both government and the private sector can benefit from studying the lessons of the other.

The Innovator’s Dilemma – Clayton M. Christensen

“The logical, competent decisions of management that are critical to the success of their companies are also the reasons why they lose their positions of leadership.” – The Innovator’s Dilemma

The Innovator’s Dilemma is simple. ‘Good’ companies, ones that maximize investment returns and listen to their customers, are harming their future prospects. Why? Because to stay on top, you need to innovate, but customers don’t want innovation: they want what they’ve always gotten. To innovate, you need to find new customers, try new things, take on risks, but ex-ante those risks can seem unreasonable or unwise.

The Innovator’s Dilemma argues that many business miss disruptive technologies. They do so not because they aren’t able to produce them, but because their current customers didn’t need or want the new product. When a smaller 5.5 inch hard drive was introduced, the major market for hard drives was users of supercomputers. They cared about power, not size. A well-managed firm in the traditional sense would have listed to their customers and not sold 5.5 inch drives.

It is left to a small firm to find a new market for the product, and indeed such a small market is only really profitable for a small firm. Of course, in the long run such small markets can grow, as did the one for 5.5 inch drives when it sparked the development of the laptop.

Are large firms doomed? No, says Christensen. Innovation requires focus, and it has to be essential to the existence of the organization to succeed. The answer is often to set up a small organization for whom the innovation is their core business, at let if flourish.

A challenge Christensen doesn’t address is how to identify which technologies are disruptive. A large firm can hardly set up a spinoff for every possible idea that crosses its desk, but it isn’t easy to know which will succeed in advance. That said, the book is and remains a classic on innovation, and if excessively long in some parts, it is focused on an important challenge for firms big and small.

Leading Change – John P. Kotter

“A managerial mindset will develop plans, not vision; it will vastly undercommunicate the need for and direction of change; and it will control rather than empower people.” – John P. Kotter

What’s the difference between a manager and a leader? Most of us can glibly dismiss managers as not-leaders, but explaining the difference takes a little more thought. Kotter argues that management is about the processes that keep a complicated system running smoothly, including planning, budgeting, organizing, staffing, and controlling. Leadership, in contrast, is what creates organizations in the first place or adapts them to change, by defining what the future should look like, aligning people with that vision, and inspiring them to make it happen.

Kotter is a giant in the change management field. Except, he compellingly rejects the idea of change management. What we should be doing, he argues, is change leadership. Historically, the focus in universities and businesses has been hiring and training managers. That’s a good thing: they are essential! But as a result, we are now short on leadership, and we often end up with a manager where leadership is needed.

Kotter presents eight steps to changing an organization. If you skip any, go back to step 1.

  • Establish a sense of urgency
  • Create a guiding coalition
  • Develop a vision and a strategy
  • Communicate the change vision
  • Empower broad-based action
  • Generate short-term wins
  • Consolidate gains and produce more change
  • Anchor new approaches in the culture

The first six are about building up momentum, while the final two are about preventing backsliding. The distinction between management and leadership also provides another lesson, though. Far too many leaders, or would-be leaders, spend so much time managing they don’t have any time to lead. Developing a vision and inspiring people takes time: all culture changes are slow, and cannot be rushed. One can hurriedly set up a budget; one can’t hurriedly change people’s minds.

Kotter is an engaging writer and the book is powerful. If you’re thinking about changing an organization—and these days, who isn’t—well worth the read.

The Fix – Jonathan Tepperman

“At a time when most of us have glumly concluded that our governments are broken and our domestic and international problems are insurmountable, I aim to show how the right individuals can overcome the most intimidating obstacles–if they follow the right strategies. This book makes a data driven case for optimism at a moment of gathering darkness…One of the basic premises of this book is that while the details of all the troubles currently wracking the world vary, they share an underlying cause: the failure of politicians to lead.”

The Fix introduces ten big problems, and ten countries or places which have successfully overcome them to flourish. Not all solutions can be transplanted or last for the long-term, of course, but they provide ideas and inspiration to the rest of us. The ten are:

  1. Inequality – Lula in Brazil with his Bolsa Familia (Cash grants to the poor)
  2. Immigration – Pierre Trudeau in Canada (Intentional multiculturalism)
  3. Islamic Extremism – Indonesia (Rehabilitate terrorists, and co-opt their agenda)
  4. Civil War – Rwanda (Village-level court system to sentence those involved in the genocide)
  5. Corruption – Singapore (strict penalties, systemic changes, and high pay for officials)
  6. Resource Curse – Botswana (Establish good institutions first)
  7. Energy – U.S. Shale gas (Strong property rights)
  8. Middle-Income Trap – South Korea (Use crises to strengthen the system)
  9. Political Gridlock (International) – Enrique Pena Nieta in Mexico (in the first part of his term, at least – bargain with everything on the table so can trade in reciprocity)
  10. Political Gridlock (U.S.) – Bloomberg’s fight against terrorism in NYC (Get the data and do the right thing)

The book is great fun. It’s well written, in a clear, informal style, and the author clearly had fun researching and writing it. His list is in some ways notable for what it omits—global warming does not appear, I suspect because there are no countries that have cracked it—but for all that they are still ten big problems. Some of his solutions I doubt will work elsewhere, or at least will require completely reformulating, but they remain interesting and very relevant.

Disclosure: I read The Fix as an advance reader copy. You can read reviews and order your own copy here: The Fix.

The Personal MBA – Josh Kaufman

“Instead of trying to absorb all of the business information that’s out there–and there’s a lot out there–use this book to help you learn what matters most, so you can focus on what’s actually important.”

Want to be a guaranteed millionaire? Save $10 a day for forty years at 8% interest. Not something that comes up in many MBAs, but actually quite interesting when you think about it. Two lattes a day, and retire a millionaire! Though, 8% is pretty optimistic these days. Anyway.

MBAs are expensive. Really expensive. So expensive, you might wonder if it’s really worth it. For Josh Kaufman, the answer is usually not, unless you’re hoping to work for an investment bank, lead a fortune 500 company, or be at a top management consulting firm. Too many modern MBAs focus largely on finance, which is relevant in those settings but not if you want to, say, actually run a business.

In response, Kaufman has done his best to distill the many business books he has read to some concrete lessons. The ‘Personal MBA’ is a process of reading one hundred best books on business he recommends, focused on how business actually works. What are the key parts of any business? How do you find a grow a business idea? What are the three universal currencies (resources, time, and flexibility)?

Overall, the Personal MBA is excellent: it does a great job distilling concepts into bite-sized pieces, and it is well-written and clear. It stumbles a few times—some of the bite-sized pieces are so small as to be basically useless, and the risk of a personal MBA is that you don’t realize where you’ve misunderstood, so a few of his explanations are not quite correct—but if you’re looking for a clear, concise, and well-written introduction to a wide selection of business concepts, it’s a great resource.

United: Thoughts on Finding Common Ground and Advancing the Common Good – Cory Booker

“What we need now, more than anything else, are people willing to serve as uniters–people in our communities who can rally others for the greater good, reject cynicism and winner-take-all politics, and embrace the more difficult work of this generation: to unite our country in common cause.” – Cory Booker

A man sees a child drowning in a river, jumps in, and drags her to the bank. As he gets the child to safety, he sees another one, dives in, and retrieves him. He sees more children, and keeps diving in, again and again. As he reaches his limits, he sees another man walking by. He yells at him to help – there are children in the river! The man ignores him, and starts walking faster. He yells again, and the man starts sprinting. The man yells a third time – what are you doing, there are kids in the river! The other man finally turns around and says: “I’m going upriver so I can find out why all those kids are in the river and stop it!”

Cory Booker is the fourth black person to be popularly elected to the Senate (the third was Barack Obama). His name was tossed around as a potential vice-presidential candidate for Hillary Clinton. At his best, he actively strives to appeal to left and right, focusing on making people’s lives better and serving the common good rather than partisan politics.

The book can be inspiring. Booker has done some amazing things, including a tremendous focus on reducing crime and encouraging economic development in Newark, where he became city counsellor and then mayor. He has in many ways forged his own reputation through his personal involvement in public service, and that’s a testament to his determination. My only complaint would be he occasionally misunderstands economics, such as when he discusses the tragedy of the commons, but then he is a lawyer by training, not an economist. An engaging read about a prominent US politician.

Information Dashboard Design – Stephen Few

“Eloquence through simplicity”

One of the largest challenges facing high-level management or leaders is information. A large organization is complicated at the best of times, and the information passed on by lower-level management is distorted by their own biases and interests. Even when you get unbiased information, it may not be clear what matters or what you should pay attention to.

Enter the dashboard. There are many definitions, but Stephen Few uses a relatively simple one: a dashboard is a “visual display of the most important information needed to achieve one or more objectives, consolidated and arranged on a single screen so the information can be monitored at a glance.”

In other words, the reader should be able to look at the dashboard and take in what they need to know in a single glance. They are an overview of performance.

So far so good, and yet many dashboards fail to achieve this purpose. They use misleading diagrams, or colours that provide no information but make it hard to take information in quickly, or have a poor data-to-ink ratio. Some will clutter the display with unnecessary visual effects, or arrange information poorly, or fail to consider exactly what the audience needs to know.

The solution is simplicity. Every pixel in a dashboard should have a purpose, or you should remove it. Dashboards should 1) maximize the data-to-ink ratio, and 2) emphasize the data. IT workers should push back when customers demand poor dashboards, and give them not what they want, but what they need. No dashboard can do everything, and pretending they can will only create confusion.

The book spends most of its time going through examples, which are particularly informative. Few highlights some dashboards that fail, and some that succeed, in a wide variety of contexts. This isn’t a casual read, but if you use dashboards in your own life (and they are surprisingly general in purpose – you could use one for your physical exercise, for example!), it is an excellent one, full of rich advice and good ideas.