In these latest additions to our ongoing book beat, we offer up a wide selection of topics, ranging from the secrets of long-term business success to the importance of managing customers as investments. We also take a look at the revolution of the American palate, entrepreneurship in China, economic and political developments in modern-day India, Pepsi-Cola’s pioneering efforts to bring diversity to the workplace, a critique of some not-so-hot ‘hot’ business books, and new ways to think about innovation. It’s a chance to turn off the electronic devices that rule our lives, and settle down with some old-fashioned, and we hope enjoyable, paper products. Happy reading.
In The Halo Effect … and the Eight Other Business Delusions That Deceive Managers, Phil Rosenzweig tears into some of the most popular business books of recent years, suggesting that a number of the principles bandied about in the business world are based on misguided thinking and flimsy research. These books “contain not one or two, but several delusions,” he writes. “For all their claims of scientific rigor, for all their lengthy descriptions of apparently solid and careful research, they operate mainly at the level of storytelling.”
In their book titled, Managing Customers as Investments: The Strategic Value of Customers in the Long Run (Wharton School Publishing), authors Sunil Gupta and Donald R. Lehmann offer practical examples and case studies to help companies estimate the lifetime value of their customers. That information, the authors suggest, can then be used to make better strategic decisions about customer acquisition, service, retention and segmentation. Knowledge at Wharton has excerpted a section of the book.
Companies that want to be innovative are often seduced by ideas that seem alluring on the surface but over time turn into cash traps. If a company is lucky, cash traps merely cost money and puncture inflated executive egos. In the worst cases, a cash trap can dig a financial pit that is deep enough to sink the whole company. In their recent book, Payback: Reaping the Rewards of Innovation, James P. Andrew and Harold L. Sirkin explain how executives can sidestep cash traps and make money off their innovations by using a four-phase framework they call the “cash curve.”
Alfred A. Marcus, a professor at the University of Minnesota, Carlson School of Management, reviewed detailed performance metrics for the 1,000 largest U.S. corporations, identifiying the 3.2% that have consistently outperformed their industries for a full decade. In his book, Big Winners and Big Losers: The 4 Secrets of Long-term Business Success and Failure (Wharton School Publishing), Marcus explains the strategies these companies followed, how they found opportunities in markets that others didn’t see, and how they managed the tension between agility and discipline. Below is an excerpt from Chaper Seven, titled “Focus.”
In 1949, an African-American marketing executive for the Pepsi-Cola company named Edward F. Boyd attended a performance of Arthur Miller’s Death of a Salesman. By his own account, Boyd was moved to tears by the play and its echo of his own experiences and disappointments as a salesman in mid-20th century America. Yet Boyd’s role in Pepsi’s pioneering venture to tap the African-American market by employing African-American sales personnel is a story of triumph, as related in a new book titled, The Real Pepsi Challenge: The Inspirational Story of Breaking the Color Barrier in American Business, by Stephanie Capparell.
In Firms of Endearment: How World-Class Companies Profit from Passion and Purpose (Wharton School Publishing), authors Raj Sisodia, Jag Sheth and David Wolfe suggest that the best firms in today’s marketplace are those that deliver emotional, experiential and social value to all their stakeholders, from customers and partners to investors and society. By emphasizing such principles as authenticity and empathy, the authors contend, companies gain “share of heart,” not just share of wallet, and, in the long run, are able to gain competitive advantage over firms that are focused only on profits. Below, Knowledge at Wharton offers an excerpt from Chapter Six, “Investors — Reaping What FoEs Sow.”
The American palate is an anomaly. U.S. consumers want their burgers and pizza, but they also can’t do without their imported cheese, organic baby greens, bottled water and fancy coffee. In his book, The United States of Arugula: How We Became a Gourmet Nation, David Kamp describes how, at precisely the moment that fast food became a fixture of American culture, an ideal of fine American dining also emerged. The revolution of the American palate over the past half century is, for Kamp, also a triumph of the American market.