Popular topics, potent lessons

Citation

Lane Voss, B. (2003), "Popular topics, potent lessons", Journal of Business Strategy, Vol. 24 No. 6. https://doi.org/10.1108/jbs.2003.28824fae.001

Popular topics, potent lessons

Popular topics, potent lessons

A promise of going "behind the scenes'' is hardly an original hook, but it has sold many books, TV shows and movies. The reason it is such a popular device is because most readers and viewers like finding out what really goes on – what the truth is, what the facts are, how the reality differs from the popular image.

This Stack Attack ends the year by merrily diving into three subjects that have not yet lost their luster: The accounting scandals, dot.com businesses (not the ones that collapsed, but the profitable few), and sports (in one case angled as a topic in and of itself, and in the other as an analogy to general business).

The book on accounting is the hands-down winner and not because of the business lessons it imparts. What is fascinating is how the accounting profession did so much damage to itself and its clients by successfully employing the most accepted business practices, especially its unyielding devotion to client service and its studied efforts to turn itself into a profit-maximizing industry rooted in salesmanship, product development, and double-digit annual growth. What could have been more wholesome than that?

Unaccountable: How the Accounting Profession Forfeited a Public Trustby Mike Brewster. Published by John Wiley and Sons, Hoboken, New Jersey. www.wiley.com

Authors' credentials: Seven years in the industry at one of (the then) "Big Six'' firms, Peat Marwick.

Thesis: The root of modern accounting's problems has been to divorce accounting from fraud detection.

Scope: 8000 BC-2003

File under: The road to hell can be paved with perfectly good business practices.

Reason to buy/read: Mike Brewster has written several books in one. The first is a concise history of accounting and auditing (ancient times to present). The second is a scrupulously researched and documented story (45 direct interviews) of how modern accountants who are both auditors and expert business advisers could fail to catch malfeasance at Worldcom, Enron, et al. And the third book is a tragedy due to the fatal schism between the self image of the industry as a business (particularly its steadfast maintenance that it is not a watchdog) versus its image in the public's (and the courts' and legislators') minds.

In 1993 the author, with a graduate degree from Columbia's School of Journalism, went to work for the firm that became KPMG. His intimate view of the events of the past decade combined with his skills as an investigative journalist, plus his knowledge of so many of the high profile individuals that populate the field, combine to make Brewster the ideal author to tackle the question implied in the subtitle, how the modern accountant could manage to fumble thousands of years of trust and power. In turn, he has written the watermark book answering that question and more – including identifying the heroes who did expose problems and the champions who have tried to put official and unofficial rules in place to keep the industry from being a hazard to itself.

The reader will learn by the end of the book how window after window that could have opened the industry to reform has been nailed shut. Even the seemingly tough Sarbanes-Oxley Act has been defanged and potential candidates who would be real "watchdogs'' of the industry have been muzzled.

In other words, there is every indication there could be an Unaccountable Two.

Placement in your life: Essential reading: This should volley between your briefcase and your nightstand until it is finished.

How to read: Straight through. The Introduction grounds the reader in the thesis, then the bulk of the book deals with the historical role and importance of accounting, accounting's "Americanization'' as a profession, what early problems arose as business changed, and the failure of many early attempts to prevent the profession from going down the path that has led to its recent crossroads. Here is a hint: in the 70 years following the passage of the Securities Acts, there was not one piece of legislation that affected the nature of accounting oversight.

The last third of the book covers Enron and the fall of Andersen, what as happened since Enron to accounting (including Sarbanes-Oxley), and the authors take on the future of the industry. Here is another hint: left to its own devices (a.k.a. self regulation) the pace of change will be glacial at best. Public accountants took almost 30 years to stop investing directly in their clients, for one thing. For another, the Financial Accounting Standards Board and the American Institute of Certified Public Accountants have dismal records of going on record with definitive pronouncements.

Unintended effect: Given that today's complex accounting represents staggering levels of abstraction and fewer of the assets being valued are tangible, it sometimes seems like a new kind of accounting needs to be developed.

Irresistible miscellanea: There are several excellent ideas put forth by experts Brewster talked to about "fixing'' accounting, one of the most inventive being the proposal that public companies should pay insurance companies "financial statement insurance''. Then the insurance companies would match up accounting firms and public companies. That way, the company they are auditing would not pay accounting firms and there would a further incentive to keep the books clean, lest premiums go sky-high.

You will throw this book across the room if: You worked for Arthur Andersen and/or lost money in any accounting-related stock collapse.

Price/value: $27.95/Full value plus whatever ancillary expenses it takes to get hold of this book.

When the Game Is on the Lineby Rick Horrow with Lary [SIC] Bloom. Published by Perseus Publishing, Cambridge, Massachusetts www.perseuspublishing.com

Authors' credentials: Founder of Horrow Sports Ventures (Omnicom Group), consultant to National Football League and the New York Olympic Committee; journalist.

Thesis: To make a successful deal you have to see beyond narrow interests, get sparring parties to the table, and sell a vision to everyone's benefit.

Scope: 1895 to 2002

File under: Visionary deal-making.

Reason to buy/read: The book is a quick read of the facts and personalities behind the building of several prominent new sports facilities in the USA and various professional team expansions (NFL, NBA, etc.) awarded within the past 15 years. While the main author, Rick Horrow, whose memoir this is, is clearly a born wheeler-dealer, he is hardly a diplomat, which makes for some juicy and catty swipes at major league personalities, on the record.

Starting in the "political banana republic'' of Miami, Horrow turned a childhood obsession with sports into an adult fixation on making the city more than just home to one national sports team (at the time, the football Dolphins). Along the way, he made an enemy of then-Dolphin's owner (the late Joe Robbie) and his "fellow rascals'' (county and city commissioners), got money for a stadium by bundling nine projects into one, got ripped off for $10 million by one of those commissioners (J.L. Plummer), got a buyer (Ted Arison) to spend $32.5 million for a new sports franchise, got a sports commissioner (David Stern) to bring a new NBA franchise to Miami, and got cheated out of his promised interest in the Miami Heat by his partner (Zev Buffman).

And that is just the first episode. Needless to say, Horrow learned a lot from all that and decided to codify what he learned – essentially how to make his personal sports vision prevail over astonishing odds – and take it on the road. The reader follows him to Boston, Phoenix, Oklahoma City, into the Major League Baseball Players Association, into NASCAR, and into (and out of) Jack Nicklaus's living room. 

Horrow quickly nails down for the reader the personalities of everyone he encounters; one person is "intellectual and instinctive'' another is a "garrulous Buddhist who wears his heart on his sleeve'', and yet another is full of "high blown attitudes and hypocrisy''.

On top of its other charms, the book satisfactorily and entertainingly answered several questions which have puzzled Stack in the past, including how cities get talked into building stadiums for rich sports franchise owners and what the heck NASCAR is and why should business care?

Placement in your life: This book falls somewhere between leadership and accounting. The fact that it is set in the sports world is incidental. Horrow is the definition of a driven visionary who works through others and skillfully dodges the restraints of old-fashioned numbers. "It's not about traditional math any more, it's about vision and expertise. Not having a formal budget line shouldn't stand in the way of us doing what we have to do … everybody has a discretionary fund.''

How to read: The reader finds out how Horrow "does it'' (builds the stadiums) in the first chapter – he gets the behemoths built with public-private partnerships, by linking them to redevelopment plans and getting key players from many non-sports constituencies (arts groups, community groups, tourism, heritage) to unite behind a comprehensive package, a grand plan for a city. Then he puts the whole project on one ballot initiative upon which everything rides.

He does non-stadium work too, some successful (NASCAR), some not so successful (fired after four years from Jack Nicklaus' Golden Bear Sports Management).

The reader can move through the book chronologically or can cherry pick by one escapade or another (generally each contained in a chapter). But for the evolution of how he does things and how he applies what he learns from one project to the next, it is better to go straight through.

The reader can pick up the lessons as the book goes along. These include: "Stay flexible to get buy-ins from as many people as possible''; "If you press forward on every front you can hardly go a day without some promising developments''; and "Sometimes you've got to camouflage the bullshit''.

For the time pressed, the last two chapters of the book contain Horrow's ten-point checklist used in NFL cities, the five-point checklist for public involvement, his "Horrow principles'' which served him in his deal making and may serve the reader.

Horrow's not retired, he is working on bringing the Olympics to New York City in 2012.

Unintended effect: if you ever have to take less money than you think you are worth for a project, put a "no tell'' clause in the contract. Then later you can say, "I am bound by a confidentiality agreement with them not to divulge the fee''.

Irresistible miscellanea: Cleveland is the only football team not to refrain from putting a mascot on its helmets.

You will throw this book across the room if: You are a sports fan as loyal to the old stadiums as the old teams. The "outdated facilities'' that Horrow and his ilk replace are usually only economically obsolete (not anticipating the era of skyboxes, club seats, stadium naming rights).

Price/value: $26/Entertaining enough to pick up next time you are placing an order from an online site.

On the Ball: What You Can Learn About Business From America's Sports Leadersby David M. Carter and Darren Rovell. Published by Financial Times Prentice Hall; Pearson Education Imprint, Saddle River, New Jersey. www.ft-ph.com

Authors' credentials: Author of Keeping $core (sports marketing strategies) and teacher at the USC Graduate School of Business (course: The Business of Sports Entertainment); sports reporter an analyst for various media especially ESPN.

Thesis: There is much to be learned about everyday business from the way sports handles its own operations.

Scope: 1864 to 2002

File under: The sandbox of life.

Reason to buy/read: There is no new wisdom in this book, though it is solidly packaged. Carter and Rovell examine the most traditional business practices, strategies and tactics as they have been applied in the sports industry – estimated to generate $200 billion annually – and provide examples of how these can apply to business in general. Their book chronicles many of sports' largest and most publicized developments and provides specific lessons that can be learned from the actions (and inactions) of industry leaders like George Steinbrenner, Bud Selig, Vince McMahon, and Bill France.

It covers the gamut of sports in the USA, from football to wrestling, pro to college, with an emphasis on the most well known figures that the general public would be familiar with: Tiger Woods, Joe Montana, Dale Earnhardt, Lance Armstrong, and Larry Bird seasoned with a few names so obscure that only a sports junky would recall them. Companies follow suit (Coca-Cola, Wheaties, Reebok, Nike, and Walgreens).

Placement in your life: Perfect gift for the sports-obsessed high school or college graduate in the reader's life.

How to read: It is an organized book that is easy to skim or to delve into in any order. Eleven chapters break out typical business changes such as building a business, customer service, employee relations, crisis management, penetrating new markets, and leadership.

Each chapter is clearly titled and bracketed between two summarizing devices starting with the "The Point'', which literally spells out where sports is, and ending with "Championship Points'', which show the reader how to take the lessons of the chapter and apply them to the game of business.

Unintended effect: The reader will be briefed on all major sports events from the past century and, consequently, could become a terror at cocktail parties.

Irresistible miscellanea: Mediocre tennis player Anna Kournikova makes more money in endorsements ($15 million/year) than her long-time doubles partner, Martina Hingis, who was consistently ranked number one in the world.

You will throw this book across the room if: Sports analogies do not hit a home run with you.

Price/value: $24.95/borrow a copy.

Anytime, Anywhere: How the Best Bricks-and-Clicks Businesses Deliver Seamless Service to Their Customersby Robert Spector. Published by Perseus Publishing, Cambridge, Massachusetts www.perseuspublishing.com

Author's credentials: Author of two books on the retailer Nordstrom (emphasizing their customer service) and of the book, Amazon.com: Get Big Fast. Author's Web site: www.robertspector.com

Thesis: Winning companies are the ones that provide excellent customer service across all channels, including the Web.

Scope: 1852 to mid-2002.

File under: Tortoise beats the hare, from the era of Aesop to Amazon.

Reason to buy/read: After the dust has settled and many of the fast-starting, high-flying dot-coms, like Webvan, have burned through billions and pulled out of the race, it is the long established companies (e.g. Tesco PLC) with seasoned management, established brands (who did not have to divert money, time and effort into a marketing campaign), ongoing relationships with suppliers and customers, deep pockets, and hard assets that are still in – and profiting.

This book focuses on the stories of companies that successfully use the net (usually not exclusively) as a touch point for their customers. It examines mistakes and triumphs. The group includes: Recreational Equipment Inc., Lands' End (now owned by Sears), Nordstrom, Fredericks of Hollywood, Powell's Books, FedEx, The Geek Squad, and the San Francisco Giants. All are USA based, except Tesco and all are predominantly B-to-C or B-to-C with B-to-B. The only pure B-to-B profiled is Oncology Therapeutics Network.

According to Robert Spector, the author, it is all one business – the customer chooses the channel. The Web just happens to be a channel that drops the cost of communication and increases the flow of information.

Spector has interviewed and quoted several dozen people for the book and quotes them liberally. His bias is on the retail side, not surprising given his background.

Placement in your life: You do not need it if you know that business, in the end, is not really about technology. A quote from the book by Dennis Madsen, CEO of Recreational Equipment, sums it up, "It's about understanding the customer and translating that understanding into strategies and tactics that will take care of his needs and expectations''.

How to read: Frankly, anyone reading this review will know most of the book. For those who want the real thing, read the intro and the first chapter for the main points of the book and mini-profiles of all the companies quoted.

From then on, the five following chapters end with "Takeaways'' which give a paragraph summarizing the theme covered and bullet points to review the highlights. Since the chapters are not really distinct topics unto themselves, the crossover and repetition of points starts pretty early.

Skimming is about as deep as most readers will want to go. There is little new information in the book that has not been covered elsewhere – although the quotes are fresh. Much of the advice is painfully basic, which the author acknowledges; an example: "Handling unhappy customers … requires a deft touch by people who are empathetic, do not get flustered easily, and know their product line''. To his credit, great businesses can be built on paying attention to the basics.

The book never dives into numbers or hard values about getting all these multi channels to be profitable. It gives figures – targeted e-mails are five to 15 cents each, e-mail response rates are 20-30 percent (astonishingly high), and a Web site can run "50 cents or more per customer'' – but does not give the source or context for that information.

The reader has no idea what the case study examples are used to prove. Is it EVA? NPV? A lot seems riding on gut instinct and many people "find'' that something is or is not profitable as if no business metrics were involved.

Nor does it suggest how to use some of the information bits it provides. FedEx, for example, has a team of 1,500 in-house programmers who write more software code than virtually any other non-software company.

Unintended effect: The telephone is more important than ever in business.

Irresistible miscellanea: About $8 billion worth of apparel alone is retuned to catalog and e-tailers each year.

You will throw this book across the room if: Despite the title, "Anytime, Anywhere'' is still a stretch goal, not a reality.

Price/value: $20.95/retail bias detracts from value for those not in the industry. Save a tree (skip the book).