Managers are shifting their attention from macroeconomic trends to more basic issues, such as improving performance and growing their business. To do that, it always helps to build up one’s knowledge base.
Strategic View
with Walter Kemmsies
As economic activity and capacity utilization continue to increase, managers are shifting their attention from macroeconomic trends to more basic issues, such as improving performance and growing their business. To do that, it always helps to build up one’s knowledge base. Below is a list of classic books on a range of topics that are not only helpful, but also make good summer vacation reading.
What’s inspiring about these books is that they take complicated frameworks and make them accessible and employable as soon as you have finished reading them. The list is not exhaustive. For sure, there are other useful books worth reading on the topics of sales strategy and leadership. Furthermore, there are books on these topics that delve into greater technical detail. However, that is not the objective of this list. Instead, it is focused on a range of topics addressed in a way that is accessible to almost everyone and which speak to some of the core elements of managing an enterprise.
The Goal: A Process of Ongoing Improvement by Eliyahu Goldratt and Jeff Cox (North River Press) This very well-known book is written as a novel about a manager who is put in charge of a factory that is not performing well. If he doesn’t improve the factory’s performance it will be shut down. The manager turns to an old professor of his and via a Socratic process is advised on how to achieve his goal. Through this ordeal one comes to see how a process can be improved and fine-tuned. The lessons can be applied to any process, be it a factory, a warehouse, a supply chain or even an entire economy.
Thinking Strategically: The Competitive Edge in Business, Politics and Everyday Life by Avinash Dixit and Barry Nalebuff (Norton, W. W. & Co.) John Nash, the Economics Nobel Laureate who died recently in a traffic accident, is the undisputed father of game theory—the analysis of how the outcome of one’s decision depends on the actions of others. Game theory lends itself to heavy mathematical analysis. However, it can be applied by anyone wishing to develop a strategy to achieve an objective, particularly in a competitive environment. The book is a non-mathematical exposure of game theory that is both entertaining and informative.
Co-opetition by Adam M. Brandenburger and Barry J. Nalebuff (The Doubleday Religious Publishing Group) “Co-opetition” is a new paradigm in business strategy. It goes beyond basic thinking of competition and cooperation in a traditional way to combine them to develop strategies that produce the benefits of both. It isn’t the case that one company’s success means the other fails, often the failure of one competitor can hurt the other. Factoring this into business strategy is a revolutionary way to develop profits by leveraging business relationships.
The Six-Month Fix: Adventures in Rescuing Failing Companies by Gary Sutton (Wiley) “If you’re the CEO of a struggling business, let’s hope we never meet. I’m Gary Sutton, a turnaround guy. When I arrive you leave. Results usually get better and fast.” That’s from the introduction to this book. Sutton is a top career turnaround CEO. He has resurrected a dozen failing businesses across a range of industries. The lessons he offers—embedded with his wry humor—are based on real experiences and can be quite useful to a range of enterprises in this current environment. As economic conditions improve, companies that fail to generate improving financial results could struggle to obtain loans needed to invest in capacity expansion. Some of the lessons in this book could prove very helpful.
Finance for Executives: Managing for Value Creation by Gabriel Hawawini and Claude Viallet (South-Western Cengage) For those willing to spend some time dwelling on more detail about financial analysis, this book is well suited for both managers and experienced executives. It explains how financial information can be applied to maximize a firm’s value. This concise introduction to financial management is neither too simplistic nor overly theoretical. Basic modern finance principles are applied to real-world situations and rigorous analysis, even while avoiding complicated formulas with little value for decision-making. In particular, the emphasis on return on invested capital can be very helpful to those seeking to understand why some companies or public entities in the same industry fare better than others.
Contours of the World Economy, 1 – 2030 AD by Angus Maddison (Oxford University Press) Maddison is one of the pioneers of global macroeconomic analysis. His collaborators have assembled historical data sets going back millennia. Analysis of the trends in population, GDP, productivity, and trade data provides insight into the factors that have allowed modern economies to evolve from the agrarian societies that arose towards the end of the Ice Age around 10,000 BC. The data exposition alone is of great interest to students of history. For those attempting to develop long-term forecasts it is a must read.
If none of these topics are of interest, it may be worth getting a recommendation of books about omni-channel strategies, automation or 3D printing. These are three trends that are increasingly shaping the environment in which the freight movement industry operates, both from a macroeconomic and microeconomic perspective.
Kemmsies is chief economist at Moffatt & Nichol, an infrastructure engineering firm. He can be reached at (212) 768-7454, or by email.
This column was published in the August 2015 issue of American Shipper.