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LessonsFromBooksAboutCeos

Several colleagues have told me that the following books are GREAT:

Who Says Elephants Can't Dance? Inside IBM's Historic Turnaround by Lou Gerstner

Jack: Straight From the Gut by Jack Welch with John Bynre

Good to Great: Why Some Companies Make the Leap... and Others Don't by Jim Collins

The first two books are the memoirs of two CEOs. The other is about what one management expert thinks turns a company from being merely good to great. To me, they are all about the CEO.

I read Elephants, read portions of Good to Great, and skimmed Jack.

My first discovery was that Lou Gerstner is truly an excellent writer. Another discovery was how the CEOs frame their stories about change. The most important discovery though was that reading anymore of these kinds of books is a waste of my time.

I can summarize all these books as follows --

1. A great leader is essential
2. Hire good people
3. Face the facts
4. Take risks
5. It's the culture, stupid

The books seem to be written for people who aspire to be a CEO. I aspire to make organizations become more effective and thus more productive. I don't know how to translate a single thing from any of the books so it affects the things I do this week or next week or...

Do you recommend books like these to your colleagues? If so, why? What are you getting out of them that I'm not?

SteveSmith 2003.07.14

Having a notion of what they're trying to accomplish at least gives me talking points when ideas hit the fan and splatter.

I agree, however, that after you've read one or at most two, you only want the table of contents and the jacket flaps of newer ones.

BobLee 2003.07.14

But how do you know if you are one. Every CEO I ever met though he (I never met a SHEO) was a great leader.

Hire good people

Yes, but they all do this. It's what they do with (to) them afterwards that counts. But, they definitely must believe their people are good.

Face the facts (no question about this one)

Take risks

There's a lot more to it than that, unfortunately. Jumping off a cliff is a risk.

It's the culture, stupid

And what do they know about culture or how to change it (or preserve it for that matter).

- JerryWeinberg 2003.07.14

And what do they know about culture or how to change it (or preserve it for that matter).

The CEO thinks that s/he is a master of culture and how to change it.

But the notion of preservation seems an alien concept, which shows that the CEO knows very little.

My observation is that CEOs alternate between placating and bullying the culture.

SteveSmith 2003.07.15

I have found that personality type has much to do with what I think of these people. The ones I admired had personalities similar to mine and did things that I would probably do. I guess this has something to do with culture. The successful CEOs understand the culture of a place and are able to work with it.

As for the books mentioned above, I see them as part of pop culture just like the top 40 radio stations and VH-1 music videos. Someone who is famous or almost famous has a bunch of people help them write a "book" (thick paper, large print, big margins) about why they are so famous. They go on the Today Show and such, and guess what? They sell a million copies of the book, most of which are not read by anyone. The books have nice covers and look good on a coffee table or a decorative book shelf in the sitting room. No or little harm done.

DwaynePhillips 16 July 2003

Collins has his name on two books, both based on a methodology of identifying a population of interesting companies, then going off to look for distinctions between those and a population of less-interesting companies. Collins' first book, Built to Last, uses this approach to attempt to describe companies which sustained superior financial performance over a long period of time. Collins' second book, Good to Great, investigates companies that appear to have made a significant transition from average performance to consistently superior performance.

Interesting to me, companies that feature celebrity CEOs generally don't have performance sufficient to be included in either of Collins' studies. Also, Collins asserts he didn't think the CEO mattered before starting the research. The CEO behavior that correlates with the populations Collins group selected is almost perfectly opposite to being a "celebrity CEO." Collins asserts that he, personally had to be convinced of the importance of the CEO's behavior.

I think Collins' books are different in kind from first person memoirs of celebrity CEO's. Having read both of them, I believe that much like Senge, Collins' prescriptions won't be undertaken by the fad-du-jour types, or other victims of business pop-culture. Like Handy, or Bennis, or even Drucker, what Collins prescribes takes too long and is too hard to interest dillettants and addicts.

I was at GE early in Welch's tenure. I have to think a bit to offer a cogent comment on that experience, relevant to this conversation.

-- JimBullock, 2003.07.16 (Is an accidental celebrity guilty of seeking after fame?)

What's missing for me is how YOU are using his prescriptions. Let's take an example pulled at random from Good to Great --

Sustained great results depend upon building a culture full of self-disciplined people who take disciplined action, fanatically consistent with the three circles. p. 142

Refers to Nucor's Three Circles 1970 - 1995 (three intersecting circles) p. 137

1. Passion for eliminating class distinctions and creating an egalitarian meritocracy that aligns management, labor, and financial interests.
   
   
2. Could become the best in the world at harnessing culture and technology to produce low-cost steel.
   
   
3. Economic denominator of profit per ton of finished steel.

Collins shares lots of nice analysis and presecription like the above and the target audience appears to me to be EXECUTIVES and aspiring executives.

I would love to read about how I can put Collins' prescriptions to use. And ditto for the ideas in the Welch and Gerstner books.

Perhaps I just don't get it or people like me just aren't the target audience.

SteveSmith 2003.07.16

Perhaps I just don't get it or people like me just aren't the target audience.

Perhaps you can use these as filters for the kind of company you want to work for: "Does this CEO's style/strategy bode well for me?" but caution: sometimes CEOs change jobs faster than you do!

BobLee 2003.07.16

I think I understand my problem. Middle level executives recommend these books to their subordinates. And the subordinates tell their subordinates about the greatness of the books. My observation is that vast majority of the levels in the hierarchy can't use any of the ideas because they are outside of their span of control.

I THINK that the initiatives that managers can effectively take are limited by their span of control. At least that's what I discuss with my clients/friends. Other actions are truly marketing initiatives to upper management or peer managers. In other words, don't depend on marketing initiatives to produce the results you need.

The ideas in these books seem like marketing initiatives to me.

SteveSmith 2003.07.16

I get your point, Steve. Indeed, I had the same issue with The Fifth Discipline when if first came out - How the heck do I do any of this? There's a nice transition between The Fifth Discipline and The Fifth Discipline Fieldbook. The fieldbook talks more about what people can do locally, vs. big, sweeping strategy things. I think a couple of things about CEO level strategy now:

• A company with doomed strategy or operations is a problem to work for. They get little done, and eventually you'll be unemployed. So these books are useful filters for "places to work." I prefer places with a viable strategy, some clue about operations, and a CEO with some clue what their job is. Absent those, sticking around requires an exit strategy.
• Interesting counterbalance, if a company's advantage is all strategy and positioning, your contribution in the trenches isn't such a big deal. I've been in several of those, and the internal behavior seems to be a lot about getting in, and staying in, to cash out on the options, first-mover advantage, strategic merger activity, etc. Very Feudal feeling inside those.
• Collins' stuff in particular is a wonderful filter for picking companies based on CEO. Somewhere in one of the books one of his researchers says flat out: "I learned that I only want to work some place that has a CEO like this."
• Collins' stuff is relevant when the performance of the company's operations matters. It isn't about being the first mover, or grabbing cellular licenses cheap before people know what they're worth, or so on.
• I think us grunts can be better recognized for value delivered in operating companies. In the three approaches from the book The Discipline of Market Leaders it's good to understand which discipline is being applied in the company you are part of.
• Personally, you can do some of the "CEO stuff" in your own micro-world with nobody's permission.

For one example I did a thought experiment on what is the fundamental metric (a Collins concept) at a particular e-commerce company of my acquaintence. To the extent that my work could influence that fundamental metric, I had a payoff to point to, and could describe my performance in terms of relativly objective results. To the extent that I couldn't line my work up with that metric, we're in the politics and personality zone. I'm better at the former. My main error there was not being bold enough in aligning myself with the reality I saw - I should have taken the lateral that presented itself. So, you learn.

I'm curious what would happen, Steve, if you used Collins's fundamental metric as a filter for what goes on in your company, to pick what you want to get behind, or not. -- JimBullock, 2003.07.17

OK, I'm having a large-grained synchronicity event. I'll claimed that the small-grained synchronicities are several little a-ha's that line up. "Large-grained" is big, sweeping trends that are scattered all over, softly, that interlock and interrelate for a long time. It's the difference between tectonic plates and a crowd at the checkout counter. More here: BuzzWordBingo. - JimBullock, 2003.07.17

My metric for a successful AYE conference is "Did I talk with at least a few interesting people?" - ShannonSeverance July 17, 2003.

I'm suspicious that the fundamental metric for AYE has something to do with changes in career or life results per conference attendance. (As an example of the process, that sentence changed three times as I wrote this post.) In my e-commerce thought experiment I was pretty clear about the numerator, but a bit less clear about the denominator. In the AYE case, I'm pretty clear (but possibly wrong) about the denominator, while less clear about the numerator.

Here's an abstract of Collins & company's "fundamental metric" idea. They wrote a whole book, so I've necessarily dropped some nuance.

The "fundamental metric" is very much about what business you are in, and it's the fundamental thing you optimize your operations for. It's a metric in the strictly Austin sense - it's a ratio. The top number somehow has to stand in for your payoff from what you offer your customer. The bottom number stands in for all the work you do to make that offer valid. In a sense, Collins' "fundamental metric" is a way to clear a lot of the noise around measures that aren't a lot of use, or aren't particularly relevant to this particular organization.

• One example in the book is a drug store that chose a service metric that led them to build lots and lots of stores that "overlapped." They made a ton of money doing this.
• In my e-commerce thought experiment, I considered a bunch of possibilities: "items found or findable", "people or connections reached by our offering". The metric I ended up with turned out to predict that business's strategic moves, and the payoffs it has generated. They don't talk in these terms internally.
• I can make an argument that Goldratt style production optimization is an example of a fundamental measure that applies to a class of situations. "Throughput" is a fine optimizing measure for a process business that creates capital intensive artifacts.

Developing this fundamental measure is interesting at least three ways:

• Searching for it creates powerful conversations around who we are, and what we're about.
• Using it provides a touchstone for making decisions and evaluating alternatives within the business - in all parts of the organization.
• Exploring the numerator and denominator, creates the question: How the heck would we measure that?

Hope this is helpful.

--- JimBullock, 2003.07.17 (My personal fundamental measure isn't what a lot of people think it is.)

Sherry Heinze 2003.07.18

• if there are N people in attendance, there are (at least) N metrics
• the denominator of each metric is always one (person) (because that's what each person puts into AYE by participating
• the numerators can be determined only by the person in the denominator

This fits for Sherry's and Shannon's metrics, as well as mine. - JerryWeinberg 2003.07.19