Book Description

Proven leadership lessons from the author of the international bestseller The Welch Way

Techniques Jack Welch used to create great leaders and drive unprecedented financial performance

Jack Welch and GE used the celebrated 4e model to measure leadership potential and enhance profitability at every level of the organization. Jack Welch and the 4 E's of Leadership delivers a thought-provoking and in-depth analysis of this signature model. Pragmatic and handson, it explains how the model helped Welch to consistently spot 4e leaders--individuals with energy, the ability to inspire others, and the talent to consistently make the difficult decisions and meet financial goals.

Jack Welch and the 4 E's of Leadership reveals how the 4e model helped GE's best and brightest eliminate bureaucracy, hire and promote energetic people, find new ways to increase the organization's customer-centricity, and more. Beyond the nuts and bolts of the 4e model, however, it outlines a step-by-step blueprint anyone can follow to stock an organization with performance-ready leaders and leaders-in-training.

Examples include:

• How to recognize and encourage each of the 4e's--Energy, Energizers, Edge, and Execute
• Leadership theories of Drucker, Senge, and others, and how they support and validate Welch's 4e model
• Seven rules for successfully driving change, and leveraging it to gain long-term competitive advantage
• Leadership lessons of the 4e all-star executive team
• Valuable implementation insights on virtually every page, along with a "4e leader to-do" list

Jack Welch is universally recognized as the greatest CEO of his era. In Jack Welch and the 4 E's of Leadership, bestselling author Jeffrey A. Krames examines Welch's seminal 4e leadership model and provides a penetrating and uncompromising look at how to recognize and develop authentic leaders.

Reviews (1)

Practical leadership book, great to share with others.
The "4 E's" by Jeffrey Krames is among those few leadership books that you can put to immediate practical use for yourself and for others.Krames has a pleasant, to-the-point writing style and the book's clear organization and layout makes the "4E's" a compelling read.

The first part of the "4E's"," a perspective on Welch's leadership model, offers practical "how to" exercises, including "to do" lists for 4E leaders and 4E leadership self-assessments.The exercises are incisive and easy to do.
The second part demonstrates Welch's impact on others with chapters on Jeff Immelt (Chairman & CEO, GE), James McNerney (Chairman & CEO, 3M), Larry Bossidy (former Chairman & CEO, Honeywell), Robert Nardelli (CEO, Home Depot), and Vivek Paul (CEO, Wipro Technologies).The comments of those leaders about Welch's influence are fascinating.

In "How to use this book in training, management workshops, and performance reviews" Krames offers valuable exercise-scenarios, complete with sample meeting agendas.The author makes an important point about books as learning tools in organization: they are easy-to-use,inexpensive, and easily distributed.Not surprisingly, "The 4E's," hardcover & bound, modestly sized (and priced), makes a very nice gift.
This is a great book to share with others.

The "softer" aspects of leadership and management are often hard to grasp, let alone discuss in group settings.The "4E's" is exceptionally clear about the essence of Welch's leadership model.
I highly recommend the "4E's," especially to those who want to share their learning with others.


... Read more

Amazon.com

If you think patents are just about protecting inventions such as the film projector, you're missing the big picture. Now that ideas can be protected--for example, Priceline.com's business model--patents can be wielded to intimidate competitors, uncover their strategies, capture market segments, and, for many companies, generate millions in licensing revenues. Whether patented ideas will ultimately help or hinder innovation is still under debate (seeOwning the Future). In Rembrandts in the Attic, however, authors Kevin Rivette and David Kline get down to business, offering practical advice for competing in today's intellectual property arena.

Their advice ranges from the simple to the sublime. First, they suggest, take stock of the patents you already own. Many companies are sitting on unused patents that could be worth millions. For example, IBM licensed its unused patents in 1990, and saw its royalties jump from $30 million a year to more than $1 billion in 1999, providing over one-ninth of its yearly pretax profits. And if you can't find buyers for your unused patents, then look for companies that are infringing upon them--companies that might owe you a piece of their profits. Rivette and Kline offer "patent mining" techniques to spot such potential infringers that can also reveal where your competitors are headed and help you get there before they do. Overall, Rembrandts in the Attic is a crafty and practical guide for companies that may have untapped riches in storage. --Demian McLean ... Read more

Reviews (9)

Must Reading for Entrepreneurs, Inventors, and Managers
Spellbinding. I laughed. I wept. How could Xerox PARC miss a $500,000,000 patent opportunity in the graphical user interface? Easy, they didn't recognize that someone else might have a use for something they had no use for. Yes, I laughed and I cried.

A book on why you should have an IP strategy
This well written book will convince you that an IP strategy is important. If you have some "entry-level" understanding of the strategic concepts related to IP, this book will be of little help. The concepts presented are of interest but they are presented from a superficial perspective. For instance, the concept of IP map is interesting and is accessible from one of the author's consulting firm...

Rembrandts and Understanding the New Economy
I would like to put Rembrandts into the context in which it was created. Rembrandts was conceived and co-authored by my friend and business partner of the past 15 years, Kevin Rivette. We co-founded Aurigin Systems,Inc., formerly SmartPatents, Inc., in 1992 to make it easier for people working with patents to do their work. From this beginning Aurigin and, particularly, Rembrandts, have helped transform the way intellectual property(IP) is viewed in the business community. Historically, IP was viewed strictly as a legal right, but Rembrandts shows why, in a knowledge-based economy, IP rights are one of the most fundamental business assets, that often determines the success or failure of an enterprise. Understanding the fundamental importance of IP and why it needs to be strategically managed are the underpinnings of Rembrandts. Using the book as a guide post and Aurigin's innovation asset management solutions, allows companies to: 1) understand the IP rights they own; 2) visualize how those rights fit into the competitive landscape with others' IP; 3) help determine where to place their future R&D efforts; and 4)help decide how to strategically leverage their IP rights to help determine their new business directions, increase return on investment and, ultimately, increase shareholder value. The purpose of Rembrandts was not to set forth a cookbook of how to manage IP. Rather, the book was intended to help CEOs and other business, accounting and legal professionals understand the fundamental function and purpose of IP as a highly protectable and leverageable business asset in today's economy, whether in an old-economy or a new-economy company. I believe the book very successfully achieves that purpose in a highly engaging and easy-to-read style, with many real world examples and interviews.

Rembrandts will stand the test of time and, in hindsight, it will become a business school primer on the strategic business function of IP, as well as identifying IP as one of the critical elements in the shaping of the new global economy. I highly commend Rembrandts to any business executive, entrepreneur, accountant, economist, government official, lawyer, business consultant, business school professor or student of the business world trying to understand and operate in the new knowledge-based, global economy.

Patents as a form of token
A fine book written by good story tellers. It described how patents can be used as an asset, or even as a kind of currency, an exchange token, but it lacks depth.

I am interested in Apple's failure to manage its IP. While Xerox was forced to license their photocopy technologies, Apple was doomed because they failed to license their Macintosh user interface to other developers. They have always been a hardware company. They sell underpowered and overpriced plastic cases with miserable circuits. They could have license the look-and-feel to all system builders, and let the Macintosh UI become a _de facto_ standard, but they haven't. While they were making easy money, Microsoft's Windows dominates the market, few people ever know how fun it could be to use a well-designed interface. Nobody follows Macintosh interface today.

And now they have to abandon their original look-and-feel to be more Windows-like (from OS 8). And finally they have to migrate to a mixture of Windows and NeXT when OS X finally ships in the future (hopefully). It is absolutely a bad move not to let others share your IP, but this book did not talk about it.

As IP becomes more valuable, many may improperly follow other people's advise to closely guard their IP. As suggested in this book, IP can worth a lot. A dead company can make huge profit from selling their patents. However, if badly managed, your IP can be your worst burden.

This book really worths the money. But if it's worthy of your time, that's up to you to judge.

Patents in the light of the e-commerce revolution
A patent gives its owner the right to prevent anyone else from using the invention that is protected by the patent. In a society where new technology plays an increasingly important role, the individual or corporation may find that owning a few patents, or better yet a large portfolio of patents, may be the key to success. This is independant of whether the patent holder practices the technology of the patent.

The authors discuss patents in the light of the e-commerce revolution. They suggest the use of patents in a strategic manner. They provide illustrations and examples of successful patent strategies. Although much of what they say may be known to those who are in the race to establish business method patent portfolios, even those who think that they know what patents are all about can learn something from this book. ... Read more

Book Description

Business guru Verne Harnish's firm Gazelles has brought hundreds of businesses to fast-growth profitability. Now he shares entrepreneurial secrets in this must-read business primer. Harnish has discovered John D. Rockefeller's underlying strategy. Further study uncovered three winning habits:

*Priorities: A few rules remain consistent with a firm's core values and long-term goal. Others change regularly -- what Harnish calls the Top 5 and Top 1 of 5.

*Data: Key metrics should be measured over time (Smart Numbers); short-term metrics provide a tighter focus on an aspect of the business (Critical Numbers).

*Rhythm: A well-organized set of meetings keep everyone aligned and accountable.

In addition to case studies, a bonus chapter co-authored by Rich Russakoff reveals winning tactics to get banks in competition to finance your business venture. MASTERING THE ROCKEFELLER HABITS provides necessary tools for making strategically smart decisions and forkeeping everyone aligned and accountable to those decisions. ... Read more

Reviews (13)

Verne is the small business growth guru
For any entrepreneur who is planning on growing their company, Mastering the Rockefeller Habits is the one book to read. Use this as a manual, I have, and it has made all the difference in the world. It's practical, intelligent, and easy to read and follow.

Keep it Simple, that's the Secret to Dynamic Growth
"The fundamental ideas that produce real market value and owner wealth today are based on the same 'habits' John D. Rockefeller employed to master the oil industry." So says Verne Harnish, author of Mastering the Rockefeller Habits. During America's early oil-boom, tycoon John D. Rockefeller's disciplined approach to business replaced the helter-skelter methods of the original pioneering speculators. "These important disciplines need to be embraced by all companies that want to prosper in the upcoming decade," avers expert Harnish, founder of Gazelles, Inc. and creator of the Master of Business Dynamics program. His new book offers up the tools and habits Rockefeller implemented with such notable success.

Harnish is a man with a mission: to help entrepreneurs of emerging, fast-growth companies increase the value of their firms. He has spent nearly two decades working with the CEOs and executive teams of fast growth firms.

Says former client Alan Rudy, CEO of Columbus, Ohio's Express Med, "Everyone talks about the 'entrepreneurial glass ceiling' and advises you to 'let go,' 'delegate more,' 'concentrate on alignment,' 'be unique,' 'remain nimble as your company grows,' etc., but no one, until now, ever gives you a practical guide on how to achieve all of that and keep your sanity." Complex problems may have simple solutions. Harnish says the secret is strategically smart decisions coupled with a team closely aligned and accountable to those decisions. Alan Rudy and thousands of other business owners have benefited directly from the simple and practical "tools" outlined in Mastering the Rockefeller Habits.

"Today's execs have little patience for anything except that which they can put to work immediately, " says Harnish. "My program brings solid solutions to the challenges that come with building a company." Harnish's now-famous "Mastering a One Page Strategic Plan" process has been a best-selling article on the web. Now his new book from SelectBooks is a compilation of best practices adapted from some of the best-run firms on the planet. Included is an instructive chapter co-authored by Rich Russakoff revealing winning tactics to get financial backing from banks.

This is a Top 5 Business Book in My Library
It doesn't get more straighforward than this. Unlike other jargon-filled business books, Mr. Harnish speaks directly to business owners and executives in clear, concise, easy-to-implement language.

This is a "How-To Manual" for anyone intent on growing an enduring enterprise. This is not for "get-rich-quick" business owners.

Mr. Harnish has helped us triple our revenue in the past 4 years buy applying the lessons in this book along with the lessons learned at his Rockefeller Habits Seminar. All employees must read this book and take his course.

If you don't implement the ideas in this book, I believe you are short-changing your customers, employees, and shareholders.

Helped me get my company off the lanch pad
If you're trying to get your company to the next level then this is the book for you. I'm a CEO of a small 48 person business services company that does lead generation for the complex sale. Our company had grown 95% every year for five years and made the Inc 500 so I thought I had things figured out...until our growth hit the wall.

The biggest value I got from this book was reducing my 100 page strategic plan to just 2 simple pages. Verne calls it the "Planning Pyramid"

You can down load the Planning Pyramid yourself at www.gazelles.com. Also, there's an online course (still in beta) and it's free visit http://www.teamcarney.com/gazelles/

I followed each chapter step that he laid out... values, vision, BHAG, sandbox, annual and quarterly goals, critical numbers, milestones and objectives.

We've now set a clear vision and our entire team knows our critical numbers which has resulted better communication, honesty, accountability and ultimately teamwork. I'm pleased to say that we've broken through to the next level and I give credit to this book for helping me get my strategy in order.

Bottom line: The book is worth the investment.

Entrepreneur Of The Year winner - This is a Must-Read!
Planning is everything. Our company used to be great at developing plans - we had grand plans, plans we'd worked on for months, and plans for our plans. We were planning experts. But we couldn't implement. Our plans sat in fancy binders and we pulled them out to look at them periodically, felt better because we had them, and couldn't figure out why things weren't happening like we'd planned.

Then we read Mastering the Rockefeller Habits. And we found we could actually implement the plans that we learned how to develop from the methods and techniques defined in the book. We now have plans that work. And our company has matured tremendously as an organization from following the book. I strongly recommend that any company, from young start-up to those more mature, read and implement the strategies in this book. It will change your world. ... Read more

Download Description

This is an enhanced edition of HBR article 94403, originally published in July 1994. HBR OnPoint articles include the full-text HBR article plus a summary of key ideas and company examples to help you quickly absorb and apply the concepts. Is your company a rule maker or a rule follower? Does your company focus on catching up or on getting out in front? Do you spend the bulk of your time as a maintenance engineer preserving the status quo or as an architect designing the future? Difficult questions like these go unanswered not because senior managers are lazy--most are working harder than ever--but because they won't admit that they are less than fully in control of their companies' future. In this adaptation from their upcoming book, Hamel and Prahalad urge senior managers to look toward the future and ponder their ability to shape their companies in the years and decades to come. Creating the future, as Electronic Data Systems has done, for example, requires industry foresight. Since change is inevitable, managers must decide whether it will happen in a crisis atmosphere or in a calm and considered manner. Too often, profound thinking about the future occurs only when present success has been eroded. ... Read more

Reviews (27)

Largely an academic waste of time
If your really want to understand how to compete for the future, read Crossing the Chasm, following by Inside the Tornado (Geoffrey Moore). Competing for the Future will largely waste your time. It is a 100 page book crammed into 300+ pages. The authors spend lots of time repeating fuzzy feel good ideas, and criticizing current managers, but say little that would actually help you compete for the future. They continually cite Apple as the poster child for Competing for the Future (ignoring the fact that the Mac was created in a skunkworks -- a concept they poo-poo.) Yet you can see from Apple's plight today that Hamel and Prahalad have certainly not found the most important thing for long term success. Companies that spend too much time looking 20 years out will never see it, as Apple will not. The truth is that top management can certainly ask themselves "What will competition mean in 20 years?", but they will most certainly be wrong. We live in chaotic times, and the best companies know how to turn on a dime and exploit current emerging markets (Microsoft is great at this). Hamel and Prahalad's books is destined to sit on many shelves, looking very impressive but doing nothing for its readers.

Competing for the Future
The Business Strategy text written by Hamel and Prahalad delivers mind opening advice and insight that I consider to be helpful for all managers and professionals services consultants.

The text describes and recommends a shift in business strategy. More importantly, the negative impact of not shifting is illustrated by an abundant sample of real life situations (i.e. Xerox, General Motors).

In the past, and even still to this very day, senior managers in the U.S. are betting the ranch on reengineering and restructuring efforts as a means of staying competitive in the future.

Hamel and Prahald disagree with the continued touting of such efforts. While not completely against reengineering efforts, the duo write a convicing argument detailing that managers must shift from the old tools and invest more time and resources into innovation. The value of a company will not reside in how lean and efficient the operations are, it will reside in the company's capability and resources to create new businesses and get to the future first.

Resouces, capabilities, and processes under the new paradigm must and will operate in a state of constant change. Grasping on to the old business model will represent the company's death blow.

Companies under the new paradigm must develop an open environment by which the company can easily exploit new busineses quickly; hence, taking full advantage of the benefits of being first to market (dictating the market in contrast to following the market represents substantial profits).

Ronnie O'Dell

Division Marketing Executive Canon Astro Business Services, CANON USA Calabasas, CA

An important book to read
Few companies that began the 1980s as industry leaders ended the decade with their leadership in tact and undiminished. Many household name companies saw their success eroded or destroyed by tides of technological, demographic and regulatory change and order-of-magnitude productivity gains made by nontraditional competitors. "Do you really have a global strategy", the first HBR article by Hamel and Prahalad, developed the theme that small companies could prevail against larger, richer companies by inventing new ways of doing more with less. Differences in resource effectiveness could not be explained by efficiency, labor or capital, but by amazingly ambitious goals that stretched beyond typical strategic plans, raising the question how such incredible goals could get past the credibility test and be made tangible and real to employees? Frequently the small challengers rewrote the rules of engagement; flexibility and speed were built atop supplier-management advantage, built atop quality advantages. Companies made commitments to particular skill areas a decade in advance of specific end-product markets. How did executives select which capabilities to build for the future? Some managers were foresightful, others imagined and gave birth to entirely new products and services. These managers created new competitive space while laggard companies protected the past rather than creating the future. Existing theory throws little light on what it takes to fundamentally reshape an industry and the gap provoked this book in which the goal is to enlarge the concept of the industry and not just the organization. Being incrementally better is not enough because a company that cannot imagine the future won't be around to enjoy it. This book is about strategy and how to think by drawing on the experience of companies that have overcome resource disadvantages to build positions of global leadership. It is about companies that escaped the curse of success to rebuild industry leadership a second or third time. It has been written for companies that believe that the best way to win is to rewrite the rules; it is for those who are not afraid to challenge orthodoxy, for those who prefer to build rather than cut, for those committed to making a difference and staking out the future first.

We need to ask ourselves eight questions:
- does senior management have a clear and broadly shared understanding of how the industry may be different in ten years time? Is management's view of the future clearly reflected in short-term priorities?
- How influential is my company in setting the new rules of competition within the industry? Is it regularly defining new ways of doing business and setting new standards of customer satisfaction?
- Is senior management fully alert to the dangers posed by new, unconventional rivals? Are potential threats to the current business model widely understood? Do senior executives possess a keen sense of urgency about the need to reinvent the current business model?
- Is my company pursuing growth and new business development with as much passion as it is pursuing operational efficiency and downsizing? Do we have a clear view of where the next revenue growth will come from?
- What percentage of our improvement efforts focuses on creating advantages new to the industry, and what percentage focuses on merely catching up to our competitors? Are competitors as eager to benchmark us, as we are to benchmark them?
- What is driving our improvement and transformation agenda - our own view of future opportunities or the actions of our competitors? Is our transformation agenda mostly offensive or defensive?
- Am I more of a maintenance engineer keeping today's business humming along or an architect imagining tomorrow's businesses? Do I devote more energy to prolonging the past than I do to creating the future?
- What is the balance between hope and anxiety in my company; between confidence in our ability to find and exploit opportunities for growth and new business development and concern about our ability to maintain competitiveness in our traditional businesses; between a sense of opportunity and a sense of vulnerability, both corporate and personal?

These are not rhetorical questions. We are told to get a pencil and rate our company because these questions go unanswered in many cases. Such questions challenge the assumption that top management is in control or even that their knowledge and experience may be irrelevant or wrong-headed for the future. The urgent drives out the important and the future goes largely unexplored; the capacity to act is considered to be more important than the capacity to imagine. A capacity to invent new industries and to reinvent old ones is a prerequisite for getting to the future first and a precondition for staying out in front. Gaining an understanding of how to accomplish this most difficult task is the central mission of this book.

What must we do to ensure that the industry evolves in a way that is maximally advantageous for us? What skills and capabilities must we begin building now if we are to occupy the industry high ground in the future? How should we organize for opportunities that may not fit neatly within the boundaries of current business units and divisions? The answers are to be found in this book. Armed with this information, a company can create a pro-active agenda for organizational transformation and can control its own destiny by controlling the destiny of its own industry. No company can escape the need to reskill its people, reshape its product portfolio, redesign its processes, and redirect its resources. There is not one future but hundreds; there can be as many prizes as runners; imagination is the only limiting factor. In no way does the success of one preordain the failure of another. What distinguishes leaders from laggards, and greatness form mediocrity is the ability to imagine what could be. If your senior management did not do well on the eight questions, then your company may not be around a decade from now. There are few who would not profit from reading this book.

1990s thought leadership
Hamel and Prahalad brought two ideas to the forefront of management in the 1990s: Creating a strategic intent that dominates corporate thinking, and then understanding the core competencies that the organization requires to get there. Rather than create numerous 5 year plans, communicate the direction and insure you have the skills to get there.

The impact of this was felt across corporate Americas. As companies struggled in reacting to changing times, they would talk more of core competencies instead of certainy of the future. Well run companies could also articulate their vision and what they're good at. (Example GE: "We are #1 or #2 in every business we run. We get there by rigorous management and continuous improvement.") These ideas are here to stay.

Is it all so simple? In Consulting Demons, Lewis Pinault takes issue with Prahalad and his consulting practice at Gemini. He asserts that the ideas can be misapplied to fuel a consulting boom, and that Prahalad's missionary zeal was better for generating consulting fees than for corporate bottom lines.

Bottom line - the book is a good introduction to some important strategic concepts. Although it is no longer required reading at top consulting firms, it is still relevant and important. Just take the ideas (like all pop management ideas) with a grain of salt.

A retrospective on a 1994 breakthrough management guide
Corporate strategy texts are notorious for their short shelf lives, but it is instructive to revisit them during business downturns and understand what they contributed and also where they fell short.

Now that the future has happened - nine years after this book was published - what would the authors say about the dot.com bust and the collapse of erstswhile visionary corporate giants such as Enron and Global Crossing?

In 1994, the authors wrote that the goal of competition QUOTE is not to simply benchmark a competitor's products and processes and imitate its methods, but to develop an independent point of view about tommorow's opportunities and how to exploit them. UNQUOTE By this criterion, how exactly did the dot.com dwarfs or giants of the late 1990s, many of which were hailed as exactly the kind of visionary enterprises the authors encourage, fail to leave a lasting legacy?

Certainly, other breakthrough management guides have not been exempt from the harsh judgment which the benefit of hindsight might impose only a few years after these books come out. Such a fate befell one of the renowned predecessors to this book, In Search of Excellence, half of whose most admired corporations ran into serious difficulties within a few years of publicaiton of the book.

None of this undercuts some important contributions this book does continue to make about how organizations should anticipate, manage and thrive amidst rapid change. The single most important idea in this book is that of leveraging core competencies, so that a business continually focuses on what it can do best and most profitably, rather than on what it is currently doing. If nothing else, the authors have left a legacy of language which remains helpful as a common currency among business leaders who need to understand the importance of industry foresight and to shed obsolete competencies.

And the authors did rightly suggest that appropriate public policies are also needed, althought this prophetic message was unfortunately given only a fleeting mention prior to the dot.com bust QUOTE We are not arguing for a set of policy measures that in any way discriminates in favor of large companies. The goal is not to keep dinosaurs alive at any costs. However, society pays a heavy price when, through , managerial malfeasance,a company richly endowed with resources and talent self-destructs. The goal is not to embalm dinosaurs throguh subsidies, protectionism and preferential procurement policies - as European governments have too often done - but to ensure that large companies don't become dinosaurs in the first place UNQOUTE ... Read more

Book Description

The most successful business book of the last decade, Reengineering the Corporation is the pioneering work on the most important topic in business today: achieving dramatic performance improvements. This book leads readers through the radical redesign of a company's processes, organization, and culture to achieve a quantum leap in performance.

Michael Hammer and James Champy have updated and revised their milestone work for the New Economy they helped to create -- promising to help corporations save hundreds of millions of dollars more, raise their customer satisfaction still higher, and grow ever more nimble in the years to come.

Reviews (31)

A great update of a much maligned book
What ever your feelings on reengineering (dramatic process improvement or excuse for downsizing payroll) Hammer and Champy reinvigorate the topic for the new millenium in this clear revision. Learning from their mistakes (they move process to the front instead of radical in their four word description), they reintroduce the goal of making major gains in reducing wasted work and time. Their case studies read as a list of comeback stars in corporate America and show that great strides can be made and do pay off. Just as Six Sigma is trying to reengineer TQM for a new economic reality, this book once again brings process improvement to the forefront of business management conciousness.

Some great ideas, but not thoroughly thought-out
This book has some great ideas, particularly the idea to take a fresh look at processes. For any established process, it's likely that enough has changed since the process was born that the process is no longer the best way to get from the beginning to the result. This book is well written and easy to read and the examples are especially useful in illustrating the major benefits of reengineering.

Unfortunately, many of points are not as well-thought out. For example, the book advocates building teams around discrete processes but fails to realize that this just moves companies from horizontal silos to vertical silos. These vertical silos cause different but still serious problems. Also, the book mentions the critical role of Information Technology, but fails to realize that they can often lead reengineering efforts because if they have a solid knowledge of the business and new technologies they are in the best position to see the new possibilities. Another confusing area is that book indicates certain problems that should be overcome in an initial reengineering project such as functional departments and lack of understanding of reengineering continue to be problems for subsequent reengineerings.

Many of the questions that are not answered in this book are answered in John Case's "Open-Book Management". Open-Book Management and Reengineering have many things in common including empowered workers, performance measured by results, and coaching managers, but Open-Book management does a much better job of explaining what really drives these changes and how they can best be aligned.

Manifesto or Miscalculation?
According to Hammer and Champy, business process reengineering "is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed" (p. 35). It is important that you do not confuse business process reengineering with other types of change management. It is not incremental change, down-sizing, total quality management, nor a "doing more with less" strategy. In business process reengineering, quantum changes are made to core processes, which results in far greater advances. Not only are the emerging business processes vastly different from what was previously in place, but the entire organization must change also. Employees, managers, core processes and business relationships will change in a reengineered company, and the change is significant.

The authors say this process-based approach will benefit three types of companies: 1) Those in deep trouble 2) Ones who are not yet in trouble but have the foresight to see future problems and 3) Those in peak condition but are looking to take a greater lead over their competition.

The authors present their case in a well-written manner and use frequent real world examples to great effect. I would like to see the authors use future printings to update the currency of their examples. They also need to examine the internet's role in reengineering. The few pages in the updated introduction are not adequate. The most recent printing does include an updated introduction where they remark on reengineering's successes and why it is still relevant today. This printing also adds a very useful frequently asked questions section to clarify their position on business process reengineering and lessons learned since the initial printing.

This book is for mid- and senior-level managers who believe whole-scale process changes are warranted. Also, entrepreneurs will glean important ideas for developing sound business processes. It is ideal for students studying management, organizational behavior, or process change. The author's compelling argument may not be for all business situations but their provocative manifesto deserves a thorough examination and serious consideration in today's business environment. Some readers will no doubt find reengineering as a panacea; others will see it as a relevant alternative. Read the book and judge for yourself.

I recommend this book.

A management classic
What if you started your company from a blank slate with serving the customer as the end goal?

This question is at the heart of Re-engineering the Corporation, a book that started a wave of corporate restructuring. At it's heart, the book offers the reader tools for staggering leaps of improvement (Cut cycle time from a week to 2 hours) by focusing on processes instead of internal organizations. Instead of asking, "How do we improve what we do?" the reader is challenged to ask, "What is absolutely required to serve the customer?"

The book is broken up in sections of theory followed by case studies where re-engineering did meet the lofty goals. There is an evangelical zeal with the book. By nature of it being a manifesto for revolution, the authors are out to inspire in addition to educate. It isn't enough that you understand reengineering, you must go out and do it.

The main criticism of the book comes from the authors own admission that two thirds of reengineering projects fail. If that's the case, does it pay out to begin a project like this? Or are more modest goals really appropriate? How does one avoid a major failure? The length of the book (in the spirit of the content, the book is very concise!) doesn't permit the authors to answer these questions. It's up to the individual manager to best decide how to apply the lessons in the real world.

Book review
James Champy and Michael Hammer published a key book in 1990. It is called Reengineering the Corporation. They define reengineering as "fundamental rethinking and radical redesign of business processes to achieve dramatic improvement in critical measures of performance". Allowing for the excesses of words such as dramatic improvement and fundamental rethinking - everyone wants to sell a book and get some consulting revenue! - what Champy and Hammer are reminding us is that the human relations movement in management is only one part, and that scientific management still has a role. Frederick W. Taylor, credited as being the originator of scientific management, may be used as a bogey-man to scare children but there was and is sense in what he said. The same goes for Champy and Hammer.
Their view is that any organisation needs to review its processes - indeed the very way that it works - to ensure that what is does is necessary and central to its needs, skills and concerns. Process engineering has a long and respectable history. There are ways to do things that are more effective than others. Processes in organisations do become cumbersome over time and many existing processes in any organisation are probably unnecessary. A UK based organisation, known as B&Q, once had a room set aside next to the CEO's office in which worked the Cut the .... committee. Their job was to review every system, process, report and control in the company to ensure that it was really necessary and really did add value. Systems and processes are like cupboards, basements and lofts. They can contain all sorts of unnecessary junk and garbage and need regular review. (They do not often get it!)
However, Champy and Hammer want to go well beyond the analysis and improvement of business processes. They want organisations to take a completely fresh look at what they want to achieve and how they achieve it. They argue for a blank sheet of paper as the start point. Such an approach would call into question everything that the organisation does now. Despite their critics - and there are very many indeed - most organisations spend too much energy on operations not central to their core activities. Most organisations have too much overhead. Champy and Hammer's fresh look at least motivates an organisation to examine everything and to hold nothing as a given.
Their critics are from the human relations movement side of management thinking. Henry Mintzberg calls reengineering, "just the same old notion that new systems will do the job". The truth may be that the relevance of more or less ml_topi_mngt_hrmv human relations movement and of more or less scientific management is situational. Some companies are more systems than others. In some companies, constant and daily repetition of quality is vital and such companies are like systems. McDonalds is the classic case. Stuart-Kotze has argued that organisations and leadership can have three orientations - Inspiration, People empowerment and System (he calls them task, people and system) - and that the relevance of each depends upon the organisation's situation.
Perhaps the main problem with reengineering has been that it is seized upon by the numbers people and used as a justification for staff reduction. Perhaps also every new idea, or re-statement of an old one as in the case of reengineering, is that they are taken to be the whole truth instead of part of it. New ideas are sold by academics and consultants as the total answer. Reeingineering is one of a series of such total answers from organisation and methods to participative management, to human asset accountancy, to MbO (Management by Objectives), to empowerment and TQM (Total Quality Management), all of which are highly respectable contributions to the art of management but none of which is the only answer. ... Read more

Amazon.com

From the time our ancestors lived in caves to that day in the late '80s when Chrysler sanctioned unofficial "tech clubs" to promote the flow of information between teams working on different vehicle platforms, bands of like-minded individuals had been gathering in a wide variety of settings to recount their experiences and share their expertise. Few paid much attention until a number of possible benefits to business were identified, but many are watching more closely now that definitive links have been established. In Cultivating Communities of Practice, consultants Etienne C. Wenger, Richard McDermott, and William Snyder take the concept to another level by describing how these groups might be purposely developed as a key driver of organizational performance in the knowledge age. Building on a 1998 book by Wenger that framed the theory for an academic audience, Cultivating Communities of Practice targets practitioners with pragmatic advice based on the accumulating track records of firms such as the World Bank, Shell Oil, and McKinsey & Company. Starting with a detailed explanation of what these groups really are and why they can prove so useful in managing knowledge within an organization, the authors discuss development from initial design through subsequent evolution. They also address the potential "dark side"--arrogance, cliquishness, rigidity, and fragmentation among participants, for example--as well as measurement issues and the challenges inherent in initiating these groups company-wide. --Howard Rothman ... Read more

Reviews (10)

A community of practice == a virtual community ?
Wenger, McDermott and Snyder draw on the past to describe the usefulness of a community of practice. In the Stone Age knowledge was passed on to others while people gathered around a fire and discussed hunting strategies. A community of practice is a group of people who may be trying to solve a problem and who interact about a topic in order to deepen their knowledge. The aim is shared insight and information. The authors write that in the time of ancient Rome corporations of metalworkers, potters, masons and craftsmen formed communities with a combined business and social function. Moreover, in the Middle Ages artisans formed guilds as a way to share knowledge and experiences. Therefore, the authors argue that community as a basis for knowledge creation and management has a long historical tradition.

Wenger, McDermott and Snyder believe that knowledge management needs to become more systematic and deliberate. The authors believe in the collective nature of knowledge, which involves every person contributing their perspective of a problem. A Community of Practice (CoP) allows for the connection of isolated pockets of expertise across an organization. The CoP consists of a domain of knowledge, a community of people and the shared practice they are developing. The community environment allows for interactions, relationships, sharing of ideas and the opportunity to ask difficult questions. The purpose of the CoP is to create, expand and exchange knowledge. The authors believe that a large number of CoP members rarely participate. Instead they watch the interaction and learn from the discussions that occur, learning from them. The authors believe that the most valuable activities consist of informal discussions that occur between members to solve a particular problem. A case study given is that of Shell, which has created CoP's around particular technical topics.

Wenger, McDermott and Snyder go into detail over how a CoP functions. At the beginning it is important to find common ground between all the members of the community. Members need to find out if they share similar problems and passions with one another. The authors believe a variety of communities exist: help communities, best practice, innovation and knowledge stewarding communities. Usually a community coordinator is needed who identifies important issues and plans events. The author's method for assessing the performance of a community consists of asking the questions: What did the community do? What knowledge did they produce? And how were those applied to get results?

All the characteristics mentioned, although are only intended by the authors to represent a CoP, share similarities with a virtual community. In fact the authors believe that Internet technology such as asynchronous threaded discussions can be used for distributed communities of practice. In fact some CoP's have websites where members have their pictures and biographical information on the site. However, Wenger, McDermott and Snyder make no connection between a community of practice and a virtual community. In fact they don't mention the two being related in any way at all, despite the dynamics appearing to be very similar. At the end of the book this omission seems very obvious given the incredible growth of virtual community at eBay and Amazon.

Communities within large organizations
This is a very useful detailed assessment of the role of communities of practice as developers and stewards of knowledge and their interaction with the application of knowledge inside commercial organizations. (The book is written around business organizations, but its content applies very well to public sector organizations as well and will be useful to public sector knowledge managers.)

The authors' focus of attention is - explicitly - on communities within (almost by definition quite large) organizations, and how they can be cultivated as a key element in the organization's success. Although the authors acknowledge that communities of practice can and do cross organizational boundaries, their attention to this aspect is cursory. As a result a number of very important issues (for example the degree of openness permitted/encouraged where communities cross organizational boundaries, the challenge to professional loyalties, access by specialists who are isolates within their own organization to communities of practice across the nation or the world, the management of communities of practice across strategic alliances) do not get attention.

That is about my only criticism and is almost more in the nature of a plea for someone to provide equivalent coverage of that critically important and growing field of interest.

The book defines communities of practice (COP) in relation to other groupings (for example it makes a useful distinction from communities of interest, while acknowledging that the distinctions are 'fuzzy' - see the useful table on P. 42). It also identifies the key roles, key elements and principles affecting the successful operation of COPs and factors requiring attention over their life cycle. The authors also identify diseases of COPs and their causes, address the difficult issue of measuring and managing value creation through them and provides guidance on the role of the management structure of an organization in fostering and supporting COPs within it.

Interesting and Practical Guide for Organizational Leaders
The metaphor in this book's title says it all. Wenger, McDermott, and Snyder have written a practical guide aimed at helping you grow and develop semi-informal communities capable of having a life of their own. The model they put forward is fairly simple and easy to understand.

Communities of practice, according to the authors, have three essential focal points. The first is the "domain" which is essentially the topic area or subject that people gather around to discuss, learn, and improve. Next is the "community" which includes the people who want to learn, share, and engage one another. In the words of the authors, these communicating people are the "social fabric of learning." Finally you have the "practice" which is a specific set of frameworks, tools, information, language, stories and documents that the community shares and produces with one another. All communities of practice must address the domain, community, and practices if they are going to be successful and meaningful.

With this framework in mind, the authors go on to discuss how communities of practices move through five idfferent stages--from potenital to transformation--as they mature. The majority of the book discusses the opportunities and obstacles that we face when working with a community of practice throughout the five stages. Many key ideas emerge in these chapters. Stewrdship seems to be more important than management. We cannot expect communities of practice to only solve the problems we face (which they can), but we must also expect them to create problems of their own. Building connections and aiming to add value to each community member should be an early priority. These statements are just a small sample of the ideas discussed.

Finally, the book ends by discussing how you might measure the value added and how community-based knowledge initiatives can help an organization improve its overall learning and performance.

No doubt the addresses a "soft" topic. My reaction is that effectively stewarding a community of practice requires a fairly unique person who is able to work for the good of the group and has particularly strong networking and opportunity identification skills. That said, the authors do a superb job of helping us see exactly what skills are needed for growing our own community.

This is a highly practical and easy to read book. I read this cover-to-cover in a single day. The theory of communities of practice is largely limited to only essentials and most of the time is spent helping the reader see how communities operate. If you are looking for advice about how to form a learning or discourse community around a particular issue or topic at work, or if you are interested in forming a collegial group that shares and learns about a topic, then this book is for you. This book is very much about life long learning in a professional context. It presents the community of practice as a nice alternative to the formal team or ad hoc committee. In short, this is a users' guide for meaningful and productive knowledge management groups and learning communities.

An essential reading for the knowlege economy
This book, just published by "the three musketeers of Communities of Practice", is a practical guide to managing knowledge. What makes this book special is that it goes far beyond the simple explanation and advocacy for communities of practice, which we have all been reading about for the last five years. Through in-depth cases from firms such as DaimlerChrysler, McKinsey & Company, Shell, and the World Bank, the authors expand on many practical aspects one should have in mind when engaging in a community development: The "seven principles", the "five development steps" are presented in practical terms and with great details so that they can be used as a framework for all practitioners.

The approach to "cultivating" and nurturing communities, as opposed to "managing" them, is also explained so that managers will hopefully resist the urge to try and control them using mechanistic mental models. At last, the question of measuring value creation for organizations is addressed in convincing and, again, practical ways.

There is also some wisdom in this book. The "dark side" of communities of practice is also addressed. If unproperly managed, communities of practice can indeed create isolation, collusion, or tensions, which can be quite destructive for community members and sponsoring organizations.

This book is an essential reading for any leader in today's knowledge economy. It will undoubtedly remain as a reference for all of us practitioners who want to develop communities of practice for the benefit and long-term success of organizations and their employees.

Relevant, Insightful and Practical
This is a very interesting book in explaining how to initiate communities of practice, their lifecycle and their role in the sharing and development of knowledge. Over the last ten or twenty years there has been much written about new organizational structures and the emerging importance of developing and retaining knowledge within corporations. Wenger, McDermott and Snyder approach this topic from a social perspective and apply some standard community building concepts to "communities of practice". This contrasts much of the popular thinking on these topics that tend to overemphasize the role of technology in helping to build communities or address knowledge management issues.

Cultivating Communities of Practice is and excellent handbook for anyone involved in the setup, participation or stewardship of "communities of practice" within a corporation. I would though suggest that the emphasis is on "corporation", which in some cases implies individuals having some predetermined alignment (presumably with the interests of the corporation). There is some very good discussion at the end of the book covering communities of practice outside of the corporation with and some review of supply chains and 3rd sector examples, although very limited coverage. It was noted that the focus has been on corporations as this is where there are solid examples of these practices. Hopefully a future book will address this area in more depth.

This book is identified as "A Guide to Managing Knowledge", and it does fit this description well. If you still believe that technology can be the primary component of a knowledge management strategy, then you need this book to better understand the nature of knowledge management in terms of communities of practice. ... Read more

Book Description

In 1990, IBM had its most profitable year ever. By 1993, the computer industry had changed so rapidly the company was on its way to losing $16 billion and IBM was on a watch list for extinction -- victimized by its own lumbering size, an insular corporate culture, and the PC era IBM had itself helped invent.

Then Lou Gerstner was brought in to run IBM. Almost everyone watching the rapid demise of this American icon presumed Gerstner had joined IBM to preside over its continued dissolution into a confederation of autonomous business units. This strategy, well underway when he arrived, would have effectively eliminated the corporation that had invented many of the industry's most important technologies.

Instead, Gerstner took hold of the company and demanded the managers work together to re-establish IBM's mission as a customer-focused provider of computing solutions. Moving ahead of his critics, Gerstner made the hold decision to keep the company together, slash prices on his core product to keep the company competitive, and almost defiantly announced, "The last thing IBM needs right now is a vision."

Who Says Elephants Can't Dance? tells the story of IBM's competitive and cultural transformation. In his own words, Gerstner offers a blow-by-blow account of his arrival at the company and his campaign to rebuild the leadership team and give the workforce a renewed sense of purpose. In the process, Gerstner defined a strategy for the computing giant and remade the ossified culture bred by the company's own success.

The first-hand story of an extraordinary turnaround, a unique case study in managing a crisis, and a thoughtful reflection on the computer industry and the principles of leadership, Who Says Elephants Can't Dance? sums up Lou Gerstner's historic business achievement. Taking readers deep into the world of IBM's CEO, Gerstner recounts the high-level meetings and explains the pressure-filled, no-turning-back decisions that had to be made. He also offers his hard-won conclusions about the essence of what makes a great company run.

In the history of modern business, many companies have gone from being industry leaders to the verge of extinction. Through the heroic efforts of a new management team, some of those companies have even succeeded in resuscitating themselves and living on in the shadow of their former stature. But only one company has been at the pinnacle of an industry, fallen to near collapse, and then, beyond anyone's expectations, returned to set the agenda. That company is IBM.

Lou Gerstener, Jr., served as chairman and chief executive officer of IBM from April 1993 to March 2002, when he retired as CEO. He remained chairman of the board through the end of 2002. Before joining IBM, Mr. Gerstner served for four years as chairman and CEO of RJR Nabisco, Inc. This was preceded by an eleven-year career at the American Express Company, where he was president of the parent company and chairman and CEO of its largest subsidiary. Prior to that, Mr. Gerstner was a director of the management consulting firm of McKinsey & Co., Inc. He received a bachelor's degree in engineering from Dartmouth College and an MBA from Harvard Business School.

Reviews (96)

Win, Execute, Team - He did it, He Tells It
A previous reader review suggested that Mr. Gerstner's was out of touch and if readers want the real story they should read Soldier of Fortune 500. Who better than Mr. Gerstner, the man responsible for turning IBM around to write about it? Who Say's Elephants Can Dance is wonderfully candid and well written (and by Mr. Gerstner himself, without the assistance of a ghost writer). I particularly liked the passages on "inspect versus expect," managing by principles vs. process, focus on core competency and impact of culture and how to change it. These can be applied to any company.

I am author of Soldier of Fortune 500. In fact, my book is very positive about Mr. Gerstner and what he did for IBM. I think the Gerstner book is brilliant and would recommend it to all. Rather than contradicting, my book echoes similar themes, albeit the employee view vs. CEO.

Steve Romaine
Author, Soldier of Fortune 500

Must reading for IT professionals and business strategists
Lou Gerstner has succeeded in writing a book which both provides valuable insights into the computer industry and the situation and success of IBM, as well as providing a roadmap for leaders seeking to effect strategic change in any industry. He reveals that IBM was close to running out of cash in 1993 before he stepped in and kicked out the investment bankers (later pilloried as greedy suppliers of the "hooch for all of the wild speculative periods in our economic history") who were preparing to sell of IBM, a national treasure, in pieces.

The book is easy to read, non-technical, and laced with interesting anecdotes.

Turning around IBM was one of the greatest business achievements of our time. I have worked much of my career in companies that competed against IBM and have known many ex-IBMers. All continue to have great respect for the people and the organization. There is no question that IBM had, and has, some of the best people in the world. Yet, they became unable to execute appropriate strategies quickly, losing much of their market share in the process.

Lou Gerstner rejuvenated the company, a task which is rarely permanently successful in the high technology world. Today, IBM still sells mainframes (much less expensive now, but an extension of the basic architecture introduced in 1964). And, that technology is still at the center of the IT organizations of many of our largest companies. Introduced later, but now long gone, are the Digital VAX, the Intel 8080, the Zilog Z80 and various computer architectures from the likes of Prime, Wang, Data General, etc. Most have been replaced by Unix or Windows.

We have Lou Gerstner to thank for saving IBM. As the book describes, he did it by focusing on the customer, eliminating useless bureaucratic processes, and, as a non-engineer, understanding the business implications of technology change better than most within IBM. But, it was execution, focus on cash flow and profits over revenues, and constant attention to detail in strategic planning and monitoring, together with communications and leadership which saved the day for IBM.

The title is interesting. Elizabeth Moss Kanter, a Harvard Business School Professor, wrote Teaching Elephants to Dance in 1989. Gerstner refers to some of her other works late in the book, but not this one, which appears to have provided the inspiration for the title of his book.

Worth your time and then some...
Who Says Elephants Can't Dance? Inside IBM's Historic Turnaround by Louis V. Gerstner Jr. is insightful, entertaining, and full of valuable historical perspectives into the computer revolution. There are also many management approaches throughout the book that may seem like common sense to some of us, but clearly need to be re-evaluated by many mid and top-level executives. I thoroughly enjoyed the writing style and light-hearted details of the first part of the book; and found the second part of the book that detailed the major steps taken in restructuring to be equally compelling.

I definetly recommend this to anyone in the computer industry, anyone at an executive level of any company, and to those who just enjoy reading!

A big case study on renovation
The first part of the book is full of satire and is amusing. The rest four parts lack this satire and are a little bit boring.

The book not presents a case study of a company innovation but describes the history of IBM in nineties. For example, the author explains in detail why OS/2 was cancelled and why did they buy Lotus and didn't buy other companies.

It's very exciting to read how the CEO has diagnosed the problems of the company and which solutions did he find.

I would also recommend "Leading the Revolution" by Gary Hamel. It is a very serious examination on how companies innovate and why should they do it, with lots of remarkable examples. Gary Hamel uses plain friendly language.

The books of Chris Argyris about organizational learning are also about innovation. Although the language style is "academical", the books are interesting and somewhat unique.

Overall, good, but had a few problems
`Now before getting turned off from the stars, let me just say this: the rating reflects, for the most part, my personal connection to the book. The book itself, as well as the author, is very nice. The writing, and style of, is also nicely done. However, the writing may set you off if youfre a gslowh individual such as myself. Most authors, when writing about business, generally use the expression grepetition, repetition, repetition.h Gerstner on the other hand is very straightforward and`` doesnft repeat as much as other authors. Again, this is not bad; I however, donft care for it.

The subject matter is very well organized and easy to pick up, even in cases where you need to look up a quote. The first part, entitles gGrabbing Holdh mainly talks about the background to IBMfs problems and the effects. Part two, gStrategyh is well, self-explanatory. Part three, gCultureh talks about corporate culture inside and outside of IBM. Part four, another self-explanatory piece,`` is gLessons Learnedh. Lastly, you have the Appendices.

While reading this, I found that this was not all about IBM. A lot of it wasnft about large corporations at that. What I did notice was that a lot of saying, quotes, teachings and the such, could also be applied to other fields of life, both in and out of business. I use the comparison to gPoor Richardfs Almanach a lot, but it seems to fit and describes it quite well.

Again, this is not a bad book, not at all. Personally,` however, I had a few problems with the writing and such, but I do recommend it as a good read. ... Read more

Book Description

The business world seems to have given up on loyalty: many major corporations now lose-and have to replace-half their customers in five years, half their employees in four, and half their investors in less than one. Fred Reichheld's national bestseller The Loyalty Effect shows why companies that ignore these skyrocketing defections face a dismal future of low growth, weak profits, and shortened life expectancy. Reichheld demonstrates the power of loyalty-based management as a highly profitable alternative to the economics of perpetual churn. He makes a powerful economic case for loyalty-and takes you through the numbers to prove it. His startling conclusion: Even a small improvement in customer retention can double profits in your company. The Loyalty Effect will change the way you think about loyalty, profits, and the nature of business. ... Read more

Reviews (20)

A great, non-preachy business book
While many authors of business books seem to be really just selling their consulting services, Mr. Reicheld paints a picture of what businesses need to do to retain customers while adding VALUE to those customer relationships. Reicheld talks about his experience as a consultant, but I never felt he was trying to sell me on his services. The Loyalty Effect is a must read for anyone who is mystified at why their profits aren't as high as their competitors while everyone seems to have about equal margin.

The most valuable business book I've ever read
Reichheld lays out both why loyalty matters, and why difficulty in measuring the impact of loyalty has made managers undervalue it in the past. He shows how loyal relationships with employees, suppliers, customers and investors all contribute to a company's long term success.

His insights are profound for anyone building a company. We have used his insights to build our business, and have benefited enormously from the viewpoints expressed in this book.

Superb
Simply the best business book I've read in years. An invaluable framework for long-term success.

Substantiating soft efforts for loyalty with hard figures
“Loyalty is dead” begins this classic about loyalty. But after you’ve read this book, you'll know that pursuing loyalty pays off. The authors show you many ways to measure the profit of loyalty. Not only is employee loyalty important but also the loyalty of customers and investors. The first step is to build up a set of values for your company. This core task can't be delegated; it must be done by CEOs themselves. Loyalty can't be managed; it must be earned. The book contains many examples of how large companies have done this. What I like most about this book are the hints for substantiating “soft” efforts for loyalty with “hard” figures. Most of the time the authors argue for a focus on the long term. Loyalty-based management is hard work. This is the right book to get you started.

Peter Pick
(...)

How to Achieve and Then Sustain Loyalty
I read this book when it was first published and recently re-read it. Those who have checked out my reviews of other books which address many of the same issues already know that I have a bias with regard to "customer satisfaction" and "customer loyalty", agreeing with Jeffrey Gitomer and others that the former is wholly dependent on each transaction and the latter can end (sometimes permanently) because of a single unsatisfactory transaction. The objective for those who have customers (be they internal or external) is to achieve and then sustain their passion about doing business with you. You want them to become evangelists.

Of course, Reichheld fully understands all this. In a brilliant essay which recently appeared in the Harvard Business Review, he shares new research which (again) shows that companies with faithful employees, customers, and investors (i.e. capital sources which include banks) share one key attribute: leaders who stick with six "bedrock principles": preach what you practice (David Maister has much of value to say about this in his most recently published book, Practice What You Preach), play to win-win, be picky, keep it simple, reward the right results, and finally, listen hard...talk straight. In this book, Reichheld organizes his material within 11 chapters which range from "Loyalty and Value" to "Getting Started: The Path Toward Zero Defections." With meticulous care, he explains how to devise and them implement programs which will help any organization to earn the loyalty of everyone involved in the enterprise. He draws upon a wealth of real-world experience which he and his associates in Bain & Company, a worldwide strategy consulting firm. Reichheld heads up its Loyalty Practice. In his most recently published book, Practice What You Preach, David Maister explains why there must be no discrepancy whatsoever between the "talk" we talk and the "walk" we walk. Reichheld agrees, noting that the "key" to the success of his own organization "has been its loyalty to two principles: first, that our primary mission is to create value for our clients, and second, that our most precious asset is the employees dedicated to making productive contributions to client value creation. Whenever we've been perfectly centered on these two principles, our business has prospered." It is no coincidence that the world's most highly admired companies are also the most profitable within their respective industries. I wholly agree with Reichheld that loyalty is critically important as a measure of value creation and as a source of profit but that it is by no means "a cure-all or a magic bullet." Loyalty is based on trust and respect. It must be earned, usually over an extended period of time and yet can be lost or compromised at any time with a single betrayal.

Here are three brief excerpts:

"One common barrier to better loyalty and higher productivity is the fact that a lot of business executives, and virtually all accounting departments, treat income and outlays as if they occurred in separate worlds. The truth is, revenues and costs are inextricably linked, and decisions that focus on one or the other -- as opposed to both -- often misfire."

"Companies cannot succeed or grow unless they can serve their customers with a better value proposition that the competition. Measuring customer and employee loyalty can accurately gauge the weaknesses in a company's value proposition and help to prescribe a cure."

"While every loyalty leader's strategy is unique, all of them build on the following eight elements: Building a superior customer value proposition, finding the right customers, earning customer loyalty, finding the right employees, earning employee loyalty, gaining cost advantage through superior productivity, finding the right [capital sources], and earning [their] loyalty."

Who will derive the greatest value from this book? Decision-makers in any organization (regardless of size or nature) which has been weakened by defections among customers and/or employees. If the primary objectives are value creation and partnership, decision-makers in these organizations must never betray or neglect any of the fundamentals of loyalty-based management: "partnership builds incentive; incentive builds value; value builds loyalty; loyalty builds even greater value." It's as simple and (yes) as difficult as that. ... Read more

Book Description

Kevin and Jackie Freiberg’s previous book, Nuts!: Southwest Airline’s Crazy Recipe for Business and Personal Success, described the unconventional leadership that made Southwest an airline industry dynamo. In GUTS!, the Freibergs look at twenty-five gutsy and extraordinarily successful businesses and introduce the chief executives who are creating a new corporate ethos that blows the doors off business-as-usual.

Drawing on five years of research, the Freibergs provide a behind-the-scenes look at these intensely focused, passionate, and unconventional leaders and their companies. Among them:

• James Blanchard, CEO of Synovus Financial, a financial services giant with more than 16 billion dollars in assets
• Roy Spence, Jr., President of GSD&M Advertising, which AdWeekmagazine named Southwest Agency of the Year seven times
• James Goodnight of SAS, a world leader in intelligence software

Although the leaders in the book represent a wide-range of industries, they share a common vision: They see business as a heroic cause and understand that good leadership isn’t a matter of position, but of influence. They reject hierarchical rules, rituals, and expectations, and have replaced in-the-box management with a culture based on passion and innovation. They regard their employees not as “human resources,” but as individuals with unique gifts and talents. And make everyone in the company responsible for the company’s brand and culture.

An exciting follow-up to Nuts!, which has sold nearly 500,000 copies in hardcover and paperback, GUTS! proves that it is possible to have fun, live your values, and still make money. ... Read more

Reviews (35)

Ready for a Gutsy life?
I simply loved this book!! GUTS! has the passion, the research, the real life stories, the challenges to grow and change, and most importantly the principles of gutsy leadership all in one excellent book. Drs. Kevin and Jackie Freiberg have given us all a tool for significant organizational and personal growth for 2004 and beyond.

Their passionate portrayal of unique leaders in a variety of fields employing gutsy behaviors like "lead with love", "make business heroic", and "inspire fun" is sure to cause transformation in you and your organization. The "can do" attitude of the leaders discussed in the The Monarch High School Project renewed my enthusiasm, inspired new hopes, and moved me to action.

Don't miss their use of GUT CHECK's. Organized throughout the book, these GUT CHECK's keep you focused, challenged, and applying the solid leadership principles to your next endeavor. I can't wait to share the ideas and the renewed vision reading GUTS! gave me with all the leaders around me.

2 Gifted authors who lead by example!
Kevin and Jackie Freiberg have the initiative, credibility, and keen insight to truly capture the shared qualities of "Gutsy Leaders". In writing this terrific book, they've once again demonstrated their natural understanding of leadership and have given America a tutorial in how any business OUGHT to be. The leaders they've profiled in "GUTS!" acted on their personal convictions and values, and this book of business wisdom shows how these same values have subsequently shaped their companies. As successful companies, the businesses illustrated in "GUTS!" stand as benchmarks in their respective industries. It's so refreshing to be reminded how simple success can be in any organization. With the right mix of inspirational leadership, a culture of caring, and employee latitude to handle any situation that arises, any company can join the list of successful entities the Freiberg's profile. However, leaders like those mentioned in their book seem to be as rare in business today as diamonds, (especially in HR and CEO's!) Because they also practice leadership by example as business owners, Dr's Kevin and Jackie Freiberg have given us an easy to read, credible, and invaluable example of what works in any organization, family, or environment. Although it's common sense, the book should be mandatory reading for every business leader to reinforce or awaken their "business awareness". Treat associates, employees, and customers as VIP's, and they'll multiply your ROI many times over. I love their philosophy, and this new book reflects their insight and understanding of people as well as of business leadership. The "Gut Check" questions and examples provide a simple and practical reference for any company/leader to use. Buy the book; highlight the paragraphs that reflect your company; and pass it directly to both your manager & CEO to read. Then, do whatever you need to do to make your company as positive as those referenced in "GUTS!" If it doesn't improve, there are 15 companies illustrated in the book who want to let you apply your skills where they are appreciated, encouraged, and rewarded. Have the guts to make the switch, and be another one of these "Gutsy Leaders who blow the doors off business as usual". I really love the book, and it's right on target again just like their first book, "NUTS!"

Why bother?
Why bother to read a book when a review alone clearly indicates that the author didn't do their homework. For example, according to other reviews, this book describes SAS as one of the most spectacular companies. However, that is just the company's excellent PR at work. Obviously there was nothing resembling investigative journalism. To include SAS in this book when there is a wealth of unethical behavior, payoffs, etc. going on there is just lazy work by the authors and questions the entire book's credibility.

Inspiration Food!
When you're looking for inspiration to lead your team, this is the perfect food.Be prepared for generous servings of pride of ownership,innovative approaches,hard work and a caring,human touch combined with gutsy risk-taking ability! The recipe works for all customers, whatever their mood,appetite or circumstances.
On the surface,it appears to be the opposite of "Neutron Jack's" 'tough-guy'approach but deep down they both share a common management style-cherishing and valuing employee contributions at all levels.

Pow! A Must-Have For Your Business Library!!
Sam Brannan, author of Look To The Rock

Kevin and Jackie have done it again! Guts! is even better than Nuts!, which is hard to believe if you read their first remarkable book! The difference between the Freiberg's approach to writing about business management and so many other writers' (ncluding myself), is their excellent ability to capture the pure essence of the most successful leaders of our times. Their crisp, simple approach to business-as-not-so-usual is exactly what we in corporate America need to embrace. Look forward to Freiberg's Book III! ... Read more

Book Description

Five years ago, an unknown entrepreneur named David Neeleman uprooted his wifeandnine kids from Utah to New York to start a revolutionary airline that would makejadedtravelers fall in love with flying again. Against all odds, Neeleman hassucceeded beyondhis wildest dreams. JetBlue Airways has already reached $1 billion a year insales, isconsistently profitable despite the worst downturn in aviation history, and hasthe highestconsumer ratings in the business.

Barbara S. Peterson has been reporting on JetBlue since before its first planetook off.She’s the only book author to gain full access to all the major players in thestory,including the CEO and his inner circle. She even got to participate in flightattendanttraining for a rare inside look at JetBlue’s unusual corporate culture.

Blue Streak is the definitive book on what makes this hot company tickand whyJetBlue’s customers are so fiercely loyal. (It’s not just the leather seats andindividual TVscreens.) This is a fun, exciting narrative about a tight band of true believerswho dared totry a new approach to a tough business. Blue Streak also offers afascinating lookat the decline of American, Delta, and the other airlines that used to be ontop. ... Read more