Six of the Best

For those of you without the benefit of an English education 'six of the best' refers to the corporal punishment meted out to recalcitrant pupils by eager teachers whereby the accused was whacked on his backside six times with a cane. Nowadays you would have to pay good money for a similar treatment.Anyway, my 'six of the best' refers to the most influential business books that I have read. The oldest is over one hundred and sixty years old and the youngest is a mere fourteen. Nothing from more recent times makes my list. Here are the first three...you may disagree.Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay, 1852This collection of popular delusions is a classic study of mass manias, crowd behaviour and human folly. From witch trials and subsequent burning at the stake, through the prophecies of Nostradamus, to my personal favourite, the Tulip mania of the 17th century. What makes this book timeless is how often the business world repeats similar errors today. Junk bonds of the 1980's sound like a good idea now, anybody? How about that internet stock bubble of the nineties? The NASDAQ is still over 50% below its peak reached just about ten years ago! Well what about lending money for people with no income or assets to buy homes they couldn't afford - "sounds crazy but this time it's different" they said - no it wasn't. It happened before and it will happen again - unless of course this time it really is different.The Practice of Management by Peter Drucker, 1954Peter F. Drucker was the most influential management thinker of the 20th Century. He is the founding father of the study of management and remains unsurpassed. Many of his later books are still widely used and referred to today. The practice of Management, one of his earliest efforts, while less well known remains my personal favourite. Drucker, in the Preface, explains that the first aim of this book "is to narrow the gap between what can be done and what is being done, between the leaders in management and the average". You really haven't read a management book until you have read Drucker.Positioning: The Battle for your mind by Al Ries and Jack Trout, 1981In the 1972 two young authors were writing a three part series of articles in Advertising Age about the arrival of the 'positioning era'. From this beginning, Al Ries and Jack Trout went on the write the book in 1981. In this easy to read and practical volume they define Positioning as "an organized system for finding a window in the mind based on the concept that communication can only take place at the right time and under the right circumstances." They go on to develop the idea that positioning is not something you do to a product, it is something you do to the mind of the prospect. Today's use of non invasive technology such as fMRI enables us to view the brain activity of the prospect as they are exposed to various advertising messages - and seems makes the positioning argument even more strongly. This is a thirty year old, bang up to date book. Read it.Competitive Advantage: Creating and Sustaining Superior Performance by Michael Porter, 1985The Financial Times called this book 'the most influential management book of the past quarter century'. The Washington Post described it as 'A brilliant Structural Analysis of what competitive advantage might mean...' It is probably the most obvious choice on this list and, at some 500 plus pages, quite a daunting prospect. It is the literary equivalent of Antarctica - a lot of people know of its existence and relative importance but only a few have actually 'been there'. If you have not read it then make it one of your '2010 things to do'. As good as Competitive Advantage is, this book is not a single volume but essentially a companion to Porter's earlier (and less acclaimed) Competitive Strategy, 1980. Competitive Strategy concentrates at the Industry level while Competitive Advantage concentrates on the firm. If you can find the time to read them both (and you should) then you will have a baseline of knowledge in Strategic Marketing that will be the equivalent of that provided by the best business schools.Risks: Reading Corporate Signals by Haig J Boyadjian & James F Warren, 1987I used to lend money to businesses for a living. As a senior underwriter for a London based global Bank I approved hundreds of millions in loans for asset finance, inventory finance, etc. Later, as part of my MBA studies I took a class in Advanced Risk Management, it was there I came across this book... I wished I had read it before my foray into money lending (not that I lost anything like the amount the clowns of today have mislaid!). It is well written, informed and accessible way to learn about a business's cash generation and how that is linked to its asset conversion cycle (still with me...?). Now I realise this seems the least exciting of my picks but trust me - an understanding of the lifeblood of a business and its sustainable growth rates will dictate what strategies it can pursue and, just as importantly, can also provides insights into competitors weaknesses. As my old boss used to say "profit is an opinion, cash is a fact". Business isn't all about new products and innovations - understanding the engine room is a required skill.The Balanced Scorecard: Translating Strategy into Action by Robert S Kaplan & David P Norton, 1996This book filled the gap for a method of how good ideas get translated into results. Essentially it provided a methodology to monitor and measure the specific actions and outputs that collectively drove business results. The idea itself is not new and can trace its roots to the French 'tableau de bord' systems of the early 20th century, but what made this a breakthrough book for me was the inclusive nature of the individual monitoring systems and how each business would design its own scorecard 'balanced' by the competing and specific needs of the business. All ideas need structure and this book provided exactly that, the subsequent follow up volume 'The Strategy Focused Organization' added to the base knowledge. I help businesses implement web based planning systems to this day and while techniques evolve and improve I can still see the 'family resemblance' to this earlier work. "Measure the outputs but manage the inputs" as I am quite often heard saying.Well there you have it. As my old mentor once said to me "Opinions are like A**holes, everybody has got one"SW 2010 dr seuss book collection