Director logo
Book review
Books that do the business
by Peter Bartram

What makes a great business book? Two of the judges of a prestigious book award share their insights and recommend the best reads of the last 60 years

Breakfasting directors spreading rationed butter on their rationed bread in 1947 might have turned from their rationed newspaper to read one of the first business books to appear after the war in austerity Britain.

Peter Drucker's Concept of the Corporation (1946) had been published the previous year. And books were rationed too, in the sense that they had to conform to "book production war economy standard"—a reminder that the book itself sometimes says more about the society from which it comes than its contents. Drucker's classic drew heavily on Alfred P Sloan's experience of building General Motors into the world's automobile behemoth.

Readers who wanted Sloan's inside story had to wait until 1964 when he told his own tale in My Years with General Motors. It was the first of a long parade of "how I did it" memoirs that were to include rival Chrysler CEO Lee Iacocca's An Autobiography (1984).

Since Drucker's seminal work, probably more than 250,000 business books have been published. Indeed, one estimate a couple of years ago suggested that there might be around 200,000 currently in print, taking a fairly generous definition of what constitutes a business book.

Two senior business leaders who have decided views on what's worth reading are Sir Martin Sorrell, chief executive of WPP Group, the FTSE-100-listed advertising company, and Rachel Lomax, deputy governor at the Bank of England, where she has specific responsibility for monetary policy.

In the past month, both have been ploughing through books shortlisted for the FT/Goldman Sachs Business Book of the Year award. Away from the judging panel, both admit to being voracious readers of business books.
"I tend to look for books about topics that I'm interested in," says Sir Martin. "At the moment, two of those things are emerging markets and new technologies. I would read a book that I thought would give me some insight into those two areas."

He cites a recent one as Andrew Keen's The Cult of the Amateur (2007). It's a rousing polemic which argues that "today's internet is killing our culture". Keen rails against the flood of "user-generated nonsense" on the Web, claiming it obscures work of real value. He argues that blogs tend to reinforce readers' prejudices rather than broadening their horizons and opening their minds to new ideas. "I found it interesting," says Sir Martin, "because it takes an opposing view on the value of the internet."

Likewise Rachel Lomax says: "I like books that open up new horizons and talk about the new things that are out there." She has recently been reading Tim Clissold's Mr China (2005). Clissold, a Wall Street banker with a couple of years of Mandarin under his belt, headed for China in the early 1990s at the time when pundits were starting to talk about the country as the next economic superpower. In the following few years, he managed to see off the better part of $400m in abortive deals in a business climate in which Chinese chancers always seemed to be one step ahead.

"It's great fun," says Lomax, "because it's the personal story of somebody who goes to China and tries to do joint ventures with Chinese companies. It gives you a real sense of what it was like 10 or 15 years ago." And, as one reviewer has observed, it was such great fun to read because it was somebody else's money.

The very best books impart more than a sense of fun—they leave a lasting impression. So which titles have had that kind of impact on Sir Martin and Lomax?

Sir Martin nominates the relatively obscure The Economic Theory of Managerial Capitalism (1964), by Robin Marris, a former professor of economics at London University. Marris's work broke new ground by setting out the way companies are managed in the context of society as a whole. He was one of the first to examine the impact that executive bonuses might have on the behavioural decision-taking of senior managers.

"He talked about the theory of the firm and management theory," recalls Sir Martin, "but he also talked about the practical side. It gave me an insight into how economists thought companies worked—and how they really worked. It just seemed to me to be very acute and perspicacious."

As someone who's spent her career in the public service, Lomax was also much influenced by David Osborne and Ted Gaebler's Reinventing Government (1992), said to be one of Bill Clinton's favourite reads. "It really changed the way we thought about how to structure public sector tasks," says Lomax. "It was very influential."

She also mentions Peter Senge's The Fifth Discipline (1990), the book which effectively launched the concept of the "learning organisation". "This is one of the books that probably changed how I behave in my management role."

In her current job at the Bank of England, she has been taken by James Surowiecki's The Wisdom of Crowds (2004). It's one of a modern breed of business books that draw more heavily on other social sciences—in this case psychology—to make their case.

Surowiecki argues that the decisions that emerge as the result of the aggregate thinking of large numbers of people are often sounder than those taken by individuals with a single perspective. "I've found it very thought-provoking to think about decision-taking in groups—when it works and when it doesn't," says Lomax.

But who are the greatest business writers of all time? Both Sir Martin and Lomax mention Drucker, who produced a stream of seminal works, including The Age of Discontinuity (1969). The high priest of quality management, W Edwards Deming, whose books include Out of the Crisis (1982-1986), also had a profound impact on business thinking.

It would be easy to pick out other books that have made their mark, such as Michael Porter's Competitive Advantage (1985), Henry Mintzberg's The Nature of Managerial Work (1973) and, reaching back half a century, JK Galbraith's The Affluent Society (1958)—the first of a breed of mass market books that explained the economic and social context in which business had to operate.

But, not surprisingly, it's the more recent books, which are freshest in the memory, that Sir Martin and Lomax mention most. These include Tom Peters and Robert Waterman's In Search of Excellence (1982), Charles Handy's The Empty Raincoat (1995), and Gary Hamel and CK Prahalad's Competing for the Future (1994).

The reason these books stick in the memory is that they advance new ideas. But do the most successful invent new concepts or merely articulate existing trends?

"The best business books pick up a contemporary preoccupation, open up a new way of thinking about it and give you a new angle," says Lomax. "They give you a new insight into what's going on and help you look at it in a new light."

As an example, she cites Michael Lewis's Moneyball: The Art of Winning an Unfair Game (2003), which Sir Martin has also recommended. Although it's about baseball, the book has shrewd lessons for business at large, such as focusing on who in your organisation creates the real value.

Lomax was also fascinated by Debora L Spar's The Baby Business (2006), which she would have liked to have seen on the shortlist for the FT/Goldman Sachs award. It shows how business imperatives affect the decisions people take about procreation. "I think one of the reasons I couldn't get it on the shortlist was that people found it a very uncomfortable subject to think about in a business context."

From austerity days, when business books were produced on thin paper, they have reflected their times, and not only in the subjects they've chosen. Kenneth Blanchard's One Minute Manager series, a franchise which has sold more than 10 million copies since it first appeared in 1973, came on the scene just as the pace of business started to quicken—stimulated by the rise of information technology—and managers became more worried about time constraints.

Yet, over the past 60 years, not all business books have hit the spot. For Sir Martin, books by "pseudo intellectuals" are a turn-off.

"I don't like anything that's over-complicated," he says. Books by business academics are often the worst. "There are very few who write well. They tend to over-complicate things and use 50 words when one will do."

Lomax dislikes business hagiographies. "There are an enormous number of books which are little more than thinly disguised boasting." She's also less keen on consultants' case studies, not all of which stand the test of time.
Both agree that books written by people with first-hand experience, who tell their tales with wit and wisdom, make by far the best reads. But then, whether in 1947 or 2007, that has always been true.