Ford Library

Kiechel, Walter. The lords of strategy : the secret intellectual history of the new corporate world. Harvard Business Press, 2010.

Our guest reviewer today is Fuqua faculty member Peter Regan, who teaches Decision Models in the Duke MBA Cross Continent Program.  In addition to teaching at Duke, Dartmouth and Cornell, Prof. Regan has worked in biotech, financial services, and consulting firms, and founded his own consulting and technology firm in 1995.

Kiechel surveys the history of strategy based on his years as editor of Fortune and Harvard Business Publishing. The book has the “knew them at the time” feel that Peter Bernstein has about finance in his book, Capital Ideas Evolving.

The story lays out the rise of strategy at BCG, its offshoot Bain, McKinsey, and Michael Porter’s rise at Harvard Business School. The book then follows various tributaries as the strategy marketplace matures amid the growing competition accompanying globalization.

I particularly appreciate the attention given to the “strategy as position” school exemplified by Porter’s Competitive Advantage versus the “strategy as people” school exemplified by Peters and Waterman’s In Search of Excellence.

Keichel borrows from both schools of thought in writing his book. You learn about the major firms and the advantages they have as brands with the ear of executives and the eye of top students. But you also learn about the importance of individuals in developing strategy’s ideas and in guiding the major strategy consulting firms.

Keichel admits a possible Boston-centric criticism and no doubt many will decry various omissions but as a reader I find the lack of encyclopedic coverage to be an asset that keeps the narrative line clear.

The book puts in context my own experiences at a boutique strategy consulting firm and helps me to understand the industry so many of my MBA students aspire to join.

This title is also available as an audiobook.

© Reviewer: Peter Regan & Ford Library – Fuqua School of Business.
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Ghaemi, S. Nassir. A first-rate madness : uncovering the links between leadership and mental illness. Penguin Press, 2011.

There is a legend on the internet about Ted Turner’s speech at Duke University commencement.   As the students, parents and relatives eagerly waited, Turner approached the podium and said, “Get out there and work your butts off,” and then returned to his seat. In response to the university president’s plea for him to return to the podium and say more, Turner said, ”Nope, that’s it.”

Like many stories found on the internet, this is not true.  However, in 1999 Ted Turner spoke to the 322 graduating daytime students at Fuqua.  In his speech, he passed along the advice he received from his father: “‘Set your life’s goal so high that you can’t possibly achieve it, because you don’t want to achieve your goal, you want to be constantly striving for it,'” he said. “I took his advice and went ahead saying that life is a journey, and I’m going to go as far as I can as fast as I can.”

This advice comes from Turner’s personal experience. In the book A First-Rate Madness, psychiatrist Nassir Ghaemi, MD reports that Turner’s father achieved his goal of building a successful billboard advertising company in Atlanta.  After he sold his company, he had no other ambitions and committed suicide in 1962, when Ted was 21.  Ted bought back the company, kept the billboard enterprise going and expanded it to radio and television.  Eventually, he launched CNN and Headline News.  Author Nassir Ghaemi proposes that Turner’s difficult childhood, his inherited mood swings, and his nervous energy gave him the creativity and resilience needed to become a powerful entrepreneur, achieving great things in his life.

Author Ghaemi examines the lives of eight key leaders from the past, studying the relationship between mental illness and leadership.  He concludes that in a strong economy or in time of peace, the ideal leader is someone with good mental health who meets the expectations of the community.  Yet when the economy or the world is in crisis, the best leaders are either mentally ill or mentally abnormal. The personal qualities that are present in people with depression or bipolar disorder, such as realism, empathy, resilience and creativity, are the very qualities that make effective leaders in times of crisis.  This controversial idea is well supported by numerous examples in this thought-provoking book.

This title is also available as an audiobook.

© Reviewer: Meg Trauner & Ford Library – Fuqua School of Business.
All rights reserved.

Boyd, Roddy. Fatal Risk: a cautionary tale of AIG’s corporate suicide. Wiley, 2011.

Hudson, Michael W.  The Monster: How a gang of predatory lenders and Wall Street bankers fleeced America and spawned a global crisis. Times Books/Henry Holt and Co., 2010.

It is fair to say that the average American does not understand what caused the global economic crisis.  The sub-prime mortgage industry played a major role, but did not cause the meltdown by itself.  Financial innovations, such as CDOs, CMOs and CDSs, also contributed.   To explain what spawned the global meltdown to those without an MBA, two engaging new books use the stories of companies and their managers.

In Fatal Risk, Roddy Boyd tells the story about AIG, a company whose management analyzed and modeled risk better than anyone else in the financial business yet ended up needing an $85 billion government bailout.  In The Monster, Michael W. Hudson covers the sub-prime mortgage business through the stories of Ameriquest and Lehman Brothers.

Fatal Risk: From 1962 CEO Hank Greenberg built AIG into the largest and most risk averse financial company on the planet by knitting together a collection of insurance companies from around the world.  Then in 1986, seeking additional growth opportunities, Greenberg raided Drexel Burnham Lambert and launched AIG Financial Products, entering in the market for equity options and derivatives.  Even before CEO Greenberg was forced out in 2005, management changed its focus from risk control to profit maximization.  New management leveraged the business, scrapped the internal controls and ruined the company, nearly bringing down the global financial system in the process.  Roddy Boyd has written a very readable chronicle about a complicated subject.

The Monster: The sub-prime industry was spawned in Orange County CA, home to four of the nation’s six largest sub-prime lenders.  This is a story of Ameriquest Mortgage, the leader in the sub-prime industry, and about its CEO Roland Arnall.  The methods used by Ameriquest and other sub-prime lenders to make loans to unqualified borrowers included falsifying documents, forging signatures, misrepresenting interest rates, inflating appraisals and charging exorbitant fees.  These loans were bundled and sold on Wall Street to unsuspecting investors by firms such as Lehman Brothers, which bankrolled lenders such as Ameriquest.  In this excellent read, author Michael Hudson uses the rise and fall of Ameriquest and Lehman to tell the story of the industry that helped bring about a global crisis.

© Reviewer: Meg Trauner & Ford Library – Fuqua School of Business.
All rights reserved.

Welcome to the Winter 2012 installment of Ford Library Director, Meg Trauner’s selections of five recent business books recommended to readers at the Fuqua School of Business.

Click the titles below for information on location and availability. Complete reviews, and audiobook versions are linked where they’re available.

..

Boomerang
By Michael Lewis
Uses dark humor to illustrate the effects of the ongoing economic crisis on Iceland, Ireland, Germany and Greece, as well as California. Also available as an audiobook.

Now You See It
By Cathy N. Davidson
Explains that people only see a part of what is happening around them, and shows how to overcome this deficit to gain a broader perspective on the world. Also available as an audiobook.

Psychopath Test
By Jon Ronson
Investigates everyday psychopaths and the harm they cause, advising how to recognize them in business and society. Also available as an audiobook. Read the full review.

Joint Ventures
By Trish Regan
Presents a behind-the-scenes view of the secret world of the U.S. marijuana industry, including growth and distribution, both legal and illegal,  outlining the key issues of this flourishing underground economy. Read the full review.

Thinking Fast and Slow
By Daniel Kahneman
Explores two types of decision making, intuitive and deliberate (fast and slow) that underlie our business and personal choices, counseling when to trust intuition and when not to. Also available as an audiobook.

© Reviewer: Meg Trauner & Ford Library – Fuqua School of Business.
All rights reserved.

Reagan, Ronald. “The notes : Ronald Reagan’s private collection of stories and wisdom“. Harper, 2011.

I ordered The Notes by Ronald Reagan for the Ford Library after reading a favorable review by Christopher Buckley in Bloomberg BusinessWeek.  The Notes is a compilation of cites and quotes collected by Ronald Reagan for speechwriting purposes.  Beginning in the 1950’s, he found quotes from famous leaders such as Washington, Churchill and Lenin and  transcribed them by hand on 4 x 6 cards.  He added humorous time-tested one-liners that he inserted into speeches, once and again.

The cards were discovered in 2010, tucked away in a box with paperclips and rubberbands at the Reagan Library and placed on display a year later to celebrate the 100th anniversary of his birth.  This book is a collection of the quotes.

The introduction to the book claims that there are some shockers here; for example, the book has a quote from Mao.  But this book affirms all that is well known about Reagan.  He hated taxes and communism.  He distrusted big government.   He admired Jefferson and Lincoln. Readers may find the reproduction of Reagan’s tidy handwriting on the endpapers to be interesting.   While little is new or remarkable here, the book is a quick read for Reagan admirers.

© Reviewer: Meg Trauner & Ford Library – Fuqua School of Business.
All rights reserved.

When Dan Ariely published his second book, The Upside of Irrationality, I received an announcement on email about a book signing in Geneen Auditorium.  Students and faculty from throughout the campus packed the giant room and listened with careful attention as Dan described his experiments with decision making that illustrated how expectations and emotions skew our reasoning abilities.  While everyone knew Dan as an excellent story teller, the audience also came from all corners of the university because they were intensely interested in how their minds really functioned.

In recent months, the New York Times has listed several best sellers, written by neuroscientists, psychologists and journalists, which are relevant to faculty and students in many fields including decision making, leadership and marketing.  Below is a list of the Ford Library’s newest books on the topic.  Other titles are on exhibit in the display window at the entrance to the Ford Library and in another book display in the Economics section within the library.

Thinking, fast and slow by Daniel Kahneman
Explores two types of decision making, intuitive and deliberate (fast and slow) that underlie our irrational choices and contradictory thinking. Recommended for fans of Dan Ariely’s Predictably Irrational.

The Mind’s Eye by Oliver Sacks
Presents six case histories of people who lost a key visual ability, such as how to recognize familiar faces or to read simple words, and describes the ways their brains compensated to enable them to live fulfilled lives.

Incognito by David Eagleman
Explains that human brains are composed of a complex array of pieces and parts, most of which we have no access to, and shows how we are influenced profoundly by unconscious drives of which we are unaware.

You are not so smart by David McRaney
Illustrates that humans are prone to think in certain ways and not others, by using 48 cases of self-delusion caused by cognitive biases and logical fallacies.  Easy and fun read.

Now you see it by Cathy N. Davidson
Analyzes familiar patterns of attention, suggesting new ways to see and learn that work best for education and the workplace in the digital age. Author is former Vice Provost at Duke.

The tell-tale brain by V. S. Ramachandran
Uses the bizarre symptoms seen in the author’s neurology patients  to unravel the connections between the brain, mind and body.

Self comes to mind by Antonio Damasio
Takes an evolutionary perspective on the relationships among brain, mind and self, exploring consciousness, what it is and how it is created. Recommended for readers with backgrounds in science and philosophy.

© Reviewer: Meg Trauner & Ford Library – Fuqua School of Business.
All rights reserved.

Carney, Scott M. The Red Market: On the trail of the world’s organ brokers, bone thieves, blood farmers and child traffickers. William Morrow, 2011.

The first urban legend that I ever heard was about a bathtub filled with ice and two missing kidneys. In the 40 years since, I have never met anyone who lost their body parts after a night of drinking, even though the demand for them is higher now than at any other time in history.

In his new book, The Red Market, investigative reporter Scott Carney shows that besides kidneys, spare parts in high demand include the heart, liver, ligaments, corneas, plasma, ova, and hair.  Whole bodies are needed for the adoption and medical cadaver industries. Economic markets are used to supply bodies and their parts, which have become commodities that are bought and sold every day.  Billions of dollars of human flesh changes hands each year.

Journalist Carney travels the world as he investigates what has gone wrong with the supply side of the system of body procurement and tissue harvesting. Under this system, donors cannot be paid for their contributions and must remain anonymous for reasons of medical privacy. Yet the recipients pay thousands of dollars for the flesh. The supply chain of middlemen profits handsomely from the exchanges, producing unsavory implications, such as the transfer of health and strength from destitute donors to wealthy recipients.

While the book contains harrowing stories about exploitation of people in third world nations, most of the book is a thoughtful treatment about the ethical issues in the economic exchange of human flesh. If you consider that each human life is precious and equal, then you must conclude that the market is not the best way to allocate health and well-being. This well-written book is engaging and thought provoking to the end.

© Reviewer: Meg Trauner & Ford Library – Fuqua School of Business.
All rights reserved.

Bugg-Levine, Antony. Impact investing : transforming how we make money while making a difference. Jossey-Bass, 2011.

This afternoon (Tuesday, December 6) at 4:00pm, the Fuqua School’s Center for the Advancement of Social Entrepreneurship is presenting the 2011 Leadership in Social Entrepreneurship Award to Antony Bugg-Levine, CEO of the Nonprofit Finance Fund.

Bugg-Levine is also author, with Jed Emerson, of Impact Investing, a new book  that describes how for-profit investments can help address social problems.  In Impact Investing, the authors outline a set of investment strategies that generate financial returns while intentionally improving social and environmental conditions.

Instead of viewing management of financial assets as a tradeoff between social and financial results, the authors show how investors can take an integrated approach, generating a blend of values of shareholders and stakeholders alike.   Impact Investing is an optimistic view of what can be achieved when financial assets are managed in unison with values and beliefs.

© Reviewer: Meg Trauner & Ford Library – Fuqua School of Business.
All rights reserved.

Campbell, T. Colin. The China study : the most comprehensive study of nutrition ever conducted and the startling implications for diet, weight loss and long-term health. BenBella Books, 2005.

Fulkerson, Lee (writer/director). Forks over knives. Monica Beach Media & Virgil Films. 2011.

At least once every month, I learn about a Fuqua faculty or staff member who has been diagnosed with cancer.  Many others are survivors – thanks to Duke Univ. Medical Center.  And any student who lives long enough runs the risk of this disease, which some people are calling an epidemic.

Staff member and cancer survivor Mia Ketchum recommended two resources for the Ford Library’s health management collection – the video Forks over Knives and the book, The China Study* by Dr. Colin and Thomas Campbell.

The book and the video cover the same topic — the connection between diet and chronic diseases, such as heart disease, diabetes,  and cancer.  They also review the work of scientists and conclude that a whole foods, plant based diet can prevent these diseases.  Furthermore, they provide evidence that this diet can repair damage to cells, reversing the course of disease and restoring one to full health.

In discussing the link between food and health, these scientists recommend that patients eat fruits, vegetables and whole grains, avoiding animal based foods including meat, fish, milk, cheese and eggs.  The ideal diet is a vegan diet, composed of whole unprocessed foods, based on plants.  The authors are convinced that scientific evidence about diet has been tainted by financial support for scientific research in nutrition made by the dairy and meat industries.

As a cross check, this reviewer contacted the nutritionist at Duke Radiation Oncology and discovered that Duke is also recommending that their patients eat more plants and fewer animal based foods, although they stop short of recommending a vegan regimen.

Not everyone will be motivated to adopt a vegan regimen, yet those interested in maintaining a healthy diet would find this book or video illuminating.

* The China Study is also available as an audiobook.

© Reviewer: Meg Trauner & Ford Library – Fuqua School of Business.
All rights reserved.

Ronson, Jon. The psychopath test : a journey through the madness industry. Riverhead Books, 2011.

Students, the next time you are in class, look around. Chances are good that at least one person in the room is a psychopath. And when you graduate and move on to your dream job, chances are even better that several people in the executive suite are too.

How to do you spot a psychopath? According to Jon Ronson (The Men Who Stare at Goats), psychopaths are smart, charming and impulsive. They are ambitious and enjoy power. They are easily bored. They have an inflated sense of self-worth and blame others for their mistakes. Ronson identifies 20 such attributes in his new book, The Psychopath Test, and he interviews doctors, researchers and criminals about the impact that psychopaths have on people and society.

Many psychopaths operate outside of asylums and penitentiaries.  Corporate and political leaders often score high on the psychopath test, where their love of power is useful and their lack of empathy is a benefit. These leaders ruin companies, families and the economy. Many live in New York, L.A. and London, drawn to the excitement of those cities.

In relating his conversations with psychopaths, Ronson pairs an amusing tone with nightmarish details. He bases his book on the well-regarded Hare PCL-R Checklist, developed by Bob Hare, co-author of Snakes in Suits, a book about psychopaths at work. He also discusses the work of Martha Stout in The Sociopath Next Door. All of these books are excellent reads, available in the Ford Library’s collection.

© Reviewer: Meg Trauner & Ford Library – Fuqua School of Business.
All rights reserved.