What Business Advice is Worth Taking?

Posted by Gary Hamel on December 16, 2008

In my last two posts I nominated a dozen business books that point us towards the future of management—a  world in which formal structures have given way to flexible networks, where hierarchies have been at least partially supplanted by internal markets, where decision-making rights have been broadly distributed, and where the distinction between employees and managers has mostly disappeared.

Many of you chipped in your own recommendations for essential business reading, and that got me thinking—what is it that distinguishes a stand-out business book from a mediocre pretender? What’s the difference between a book that must be taken seriously, and one that merely hopes to be? Scan the upper ranks of any business bestseller list and you’ll find books that are practical, whimsical, and (heaven help us) even anthropomorphic—books that are likeable and useful, but of little import. Forgive me for being elitist (or just plain envious), but you can’t rely on a popularity contest to ferret out the world’s most salient and significant business ideas.

Each year I get sent dozens of books and have to decide which to read and which to use as three-dimensional wallpaper. Here’s what I look for when deciding to venture beyond the first few pages . . .

Does it challenge management dogma? There’s little to learn from a book that panders to your prejudices and recycles old shibboleths. If you’re looking for a bona fide business advantage, you have to embrace ideas that are strange enough to be rejected by your peers—and you need to be quick about it, because loopy ideas that work soon become canonical truths.

My benchmarks: “The Seven-Day Weekend,” Ricardo Semler, and C.K. Prahalad, “The Fortune at the Bottom of the Pyramid.”

Does it dig deep and get at root causes? Big organizations are bad at lots of things because most of them were designed to do only one thing: replicate the past ever more efficiently. Few authors have the guts to tackle the systemic “design flaws” that constrain organizational capability. Most offer some form of cosmetic surgery when what’s really needed is gene replacement therapy. Thankfully, though, there are exceptions.

My benchmarks: Peter M. Senge, “The Fifth Discipline,” and virtually anything written by Jeff Pfeffer.

Does it look over the horizon? As the rate of change increases, so too does the chance of getting caught out by the future. Who in 2003, for example, would have predicted the explosive growth of mortgage-backed securities, and the epochal banking crisis that this would precipitate? It’s never been harder to foretell the future—all the more reason to pay attention to anyone who can help us sort out the inevitable from the improbable.

My benchmarks: Paul Hawken, Amory Lovins, and L.Hunter Lovins, “Natural Capitalism,” and Henry Chesbrough, “Open Innovation.”

Does it open up new vistas? There are thousands of books that can add to your knowledge, but few that can change your worldview. In my experience, the most illuminating business books usually aren’t business books at all. Instead, they are books about science, warfare, religion, or politics—books that give us radical new perspectives on perennial management challenges, even if obliquely.

My benchmarks: Thomas S. Kuhn, “The Structure of Scientific Revolutions,” and Stuart Kauffman, “At Home in the Universe.” (His theory of “fitness landscapes” helped me and many others better understand the challenges of corporate adaptation).

Does it call us to be more principled, and not merely more effective? Excellence, advantage, superiority, value, growth, differentiation—these are the goals that occupy the minds of most business authors. Yet no amount of progress along these vectors can repair the damage done by hubris and greed to the moral foundations of capitalism. The integrity of capitalism depends critically on the integrity of capitalists and their executive agents—a fact ignored by most business authors.

My benchmarks: Bill George, “Authentic Leadership,” and Richard Sennett, “The Corrosion of Character.”

Unorthodox, penetrating, prescient, illuminating, and principled: If a book doesn’t get a 5-star rating on at least one of these dimensions, use it as a dust magnet.


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