Kelly's Recommended Business Books

Most of these books have been around for awhile, have stood the test of time, and are well seasoned. Buy new and used books at amazon.com and used books at abebooks.com Brodie - When your name is on the door Covey - The 7 habits of highly successful people Csikszentmihalyi - Flow Deming - Out of crisis Gladwell - The tipping point Grove - High output management Higgins - Analysis for Financial Management Janz, Hellervik, and Gillmore - Behavior description interviewing Kohn - Punished by rewards Leonard - Mastery Levitt and Dubner - Freakonomics Peppers and Rogers - One-to-One future Stanley and Danko - The millionaire next door Steingold - Legal guide for starting and running a small business Zinsser - On writing well Strunk and White - The Elements of Style

Brodie. When Your Name is on the Door. Books in Focus, 1981. This book is by a little known author, but it packs a big payload. It has more nuggets of business wisdom per page than any other small business book that I have read. This book is long out of print, but it can be bought used from abe books. Here are a few favorite Brodie-isms: Before your go after new business, be sure your are taking care of the business you have. Plan more and work less. Make profit plans for various volumes of business. (42) Whenever more than two people are in one outfit, probably starting at the age of two, they form warring groups. (164) Another waste of your money is on elaborate working conditions. Management development and job enrichment is the path to financial oblivion via overhead pile-up. The only reason to be in business is to make money. The first thing to do every morning is list the problems in the order of the amounts of money they are costing you. (34) It's tough to replace and teach employees, but uUnproductive employees are like the carriers of disease. (48) Work for the balance sheet not the P&L. (49) Regard all employees as temporary (64) Most printed material is mental junk food. (154) Freelance writers eke out a wretched living rehashing articles for any and all such publications. (154) If your employees are not doing things the way you want them to, it's because you have not instructed them properly. (173) Responsibility cannot be given. It can only be assumed. An employee who asks for responsibility indicates his inability to handle it. (175) Look for the fellow who just takes over. (191) Remember - you are hiring help - not building men, or women, or contributing to the betterment of society. (177, 191) Some owners claim that money spent teaching employees new techniques constitutes a further “investment.” Nothing could be further from the truth. At least half the time, it is really throwing good money after bad. (204) Employees are expenses and nothing but expenses. (204) As a business owner one of the various crafts you must master is that of teacher. (205) Efficiency is the result of doing only what is necessary. Your real objective is work elimination. (208)

Covey. The 7 Habits of Highly Effective People. Simon & Schuster, 1989. This is the grand daddy of self-help books. It has staying power because it is one of the best. Read it, follow it, and be successful. This is on a par with the ultimate classic "Think and Grow Rich" by Napoleon Hill. The seven habits are precisely the habits every business owner should have. Be proactive Begin with the end in mind Put first things first Think win/win Seek first to understand, then to be understood Synergize Sharpen the saw

Csikszentmihalyi. Flow. Harper, 1990. Forget trying to pronounce his name (chick-sent-mih-high), just pay attention to what he says. Nearly all great things are done by people in a state of flow. Building a successful business is the ultimate flow experience on a par with a champion athlete or performer. "C" sites eight components of flow. The first states that "optimal experiences require sequences of activities that are goal-directed and bounded by rules - activities that require the investment of psychic energy, and that could not be done without the appropriate skills."

Deming. Out of Crisis. MIT, 1982, 1986. Deming is famous for resurrecting the Japanese economy after WWII. His complete philosophy is described in this book, much of which goes against corporate culture America. It is filled with nuggets of wisdom and should be read by managers of all companies large and small. For example, he has this to say about employee performance appraisals: It leaves people bitter, crushed, bruised, battered, desolate, despondent, dejected, feeling inferior, some even depressed, unfit for work for work for weeks after receipt of rating, unable to comprehend why they are inferior. It ascribes to the people in a group differences that may be caused totally by the system that they work in. He summarizes his philosophy in his 14 Points of Management, which are extracted below. Condensation of the 14 Points for Management The 14 points are the basis for transformation of American industry. It will not suffice merely to solve problems, big or little. Adoption and action on the 14 points are a signal that the management intend to stay in business and aim to protect investors and jobs. Such a system formed the basis for lessons for top management in Japan in 1950 and in subsequent years (see pp. 1-6 and the Appendix). The 14 points apply anywhere, to small organizations as well as to large ones, to the service industry as well as to manufacturing. They apply to a division within a company. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs. Institute training on the job. Institute leadership (see Point 12 and Ch. 8). The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers. Drive out fear, so that everyone may work effectively for the company (see Ch. 3). Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force. Eliminate work standards (quotas) on the factory floor. Substitute leadership. Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective (see Ch. 3). Institute a vigorous program of education and self-improvement. Put everybody in the company to work to accomplish the transformation. The transformation is everybody's job. Deming also lists his six deadly diseases: Lack of constancy of purpose Emphasis on short-term profits Performance appraisals and merit raises Job hopping Dependence on only visible figures Excessive medical costs

Gladwell. The Tipping Point - How little things can make a big difference. Little Brown, 2000. This book pulls together, in one neat package, the theory and rationale behind the spread of social epidemics, which in turn apply to all successful marketing campaigns. The theory of contagious diseases is used to describe how the demand for a product can explode when the right catalysts exist. The "tipping" point occurs when demand for your product shifts from linear growth to exponential growth. The tipping point can be used to describe social trends and other rapidly growing phenomena like: best sellers, crime, fashion trends, rise of teenage smoking, drug use, business growth, and TV viewer ship. Three attributes characterize the growth process: Social phenomena behave like a contagious disease. Little changes can have big effects. Once in motion, growth can happen fast. There are three agents of change that cause social phenomena to spread like contagious diseases: Law of the Few Stickiness Factor Power of Context The Law of the Few says that some people matter more than others. That is, some people are more contagious than others; some know more people than others (Connectors); some are more knowledgeable and therefore more believable (Mavens); and some are better spokes persons (Salesmen). Small changes in ones behavior can have big changes in the way messages are received. The Stickiness Factor says that a phenomenon will spread faster if the infected person is contagious longer; if the marketing literature is read longer; if the commercial is viewed longer; if the web site is viewed longer; if the fashion is worn more; etc. Once again small changes in an item can have dramatic effect on its ability to stick. The Power of Context says that the spread of a phenomenon depends strongly upon the environmental conditions in which the phenomenon takes place. The Broken Window theory of crime says that crime is more prevalent in an environment of “broken windows.” A neglected building or neighborhood appears to be a safe place to commit crime and thus encourages it. The Power of Context says that social behavior is a function of social context. For example, people behave (buy) differently in a group than they do individually. There is much in this book to stimulate the mind of the small business owner. We would all like to see demand for our products and services grow like contagious disease.

Grove. High Output Management. Random House, 1983 and Vintage, 1995. This is without a doubt the best management book I have read. The focus is on a large high-tech environment, but the ideas can be generalized to smaller less sophisticated environments. Some of the reviews on Amazon from past employees provide an interesting counterpoint. Chapter 13 on Performance Appraisals provides much food for thought. It is the exact opposite of what Deming proposes. Chapter 14 on interviewing is excellent. My copy has been underlined and annotated at least four times. It is always interesting to go back and reread sections to see how my thinking has changed over the years. I have given away dozens of copies of this book.

Higgins. Analysis for Financial Management. Irwin, 1995. You must be able to think in and work with numbers to be an effective business owner. That doesn't mean being an accountant, but it does means understanding how to describe and interpret the performance of you business with numbers. This book may be a bit sophisticated for some, but the payoff for understanding it is profound. It is extremely well written and easy to read by non-accountants. It should be at the bedside of every small business owner.

Janz, Hellervik, and Gillmore. Behavior Description Interviewing. Allyn and Bacon, 1986. This is a for runner of an interview technique called "Behavior Based Interviewing." This methodology gets at the heart of how an prospective employee will perform in at typical tasks on the job. This methodology will improve your interviewing and hiring skills, an essential skill for all managers and business owners.

Kohn. Punished by Rewards. Houghton Mifflin, 1993. This is a very controversial book which may cause you to rethink your use of rewards and incentive plans. It changed my thinking and jived with many of my experiences as a manager and business owner. Peter Drucker, the most influential writer on management practices in the past fifty years takes a more traditional view in "The Practice of Management, 1954" when he states "If one can "get fired" for poor performance, one must also be able to get rich for extraordinary performance. Rewards should be directly tied in with the objectives set for the manager's job." Kohn sites four reasons why rewards fail: Rewards are a disguised form of punishment for not achieving the reward. Rewards exacerbate the imbalance in manager worker relationships and diminish the potential for learning and coaching. Rewards are often used to attempt to change an undesirable form of behavior, which usually ignores the reason the trouble developed in the first place. Rewards discourage risk taking I would add that rewards are a huge de motivator for those who do not participate or fail to achieve them.

Leonard. Mastery. Plume, 1991. This book is about rising above the plateaus we reach in life, about rising above our comfort zone, about reaching successively higher and higher plateaus. The model works well for sports, business, and many other effort/skill based activities. It is very much in sink with the spirit and philosophy of Deming where the focus is on the process not the end. Leonard summarizes his philosophy as… “To put it simply, you practice diligently, but you practice primarily for the sake of practicing itself. Rather than being frustrated while on the plateau, you learn to appreciate and enjoy it just as much as you do the upward surges.” He describes the dabbler, the obsessive, and the hacker. The dabbler stops after the first plateau is reached and goes on to the next activity. The obsessive wants results fast and, after a few setbacks, abandons the activity in search of something he can excel at quickly. The hacker is willing to remain at the first or second plateau indefinitely. Leornard lists fives keys to what he calls mastery: Instruction – train under a master, take courses, read books Practice – make practice a part of your life and an end in itself Surrender – trust your instructor, be willing to change or abandon past beliefs Intentionality – engage you're your entire body and mind, heighten your awareness The Edge – be willing to take calculated risks and cross the edge to the next plateau I particularly liked Chapter 13, “Mastering the Commonplace,” which describes how mastery can be applied to the mundane tasks of life like cleaning the house, driving a car, or playing with our children.

Levitt and Dubner. Freakonomics: A Rogue Economist Explores the Hidden Side of Everything. William Morrow, 2005. Though not technically a business book, it provides many insights in the use of numbers and data to study cause and effect relationships. It presents a way of thinking critical to business success, namely the shift from opinion and hearsay to the use of numbers and facts to form conclusions, prove a point, and justify actions. Some of his conclusions about crime and child/parent relations are sure to surprise.

Peppers and Rogers. One-to-One Future. Currency Doubleday, 1993.. This is one of the few innovative marketing books published in the past decade. It is particularly appropriate in the Internet age. Chapter titles tell part of the story: share of customer, not share of market; collaborate with your customers; differentiate customers, not just products.

Stanley and Danko. The Millionaire Next Door. Pocket, 1998. Perhaps the best book on wealth accumulation ever written. No hype, just sound advice. Have you ever wondered who lives in the big house on the hill. There is a 60% chance that it is a small business owner. Very motivational.

Steingold. Legal Guide for Starting and Running a Small Business, 9th Ed. Nolo Press, 2006. This is a superb reference for the any new or existing business owner. Chapter headings include: Which legal form is best? Structuring a partnership agreement Creating a Corporation Creating a limited liability corporation Buyout agreements Naming your business and products Licenses and permits Taxes Raising money Buying a business Franchises: How not to get burned Insuring your business Negotiating a favorable lease Home-based businesses Employees and independent contractors Extending credit Contracts Resolving disputes Legal Research The companion volume, Legal Forms for Starting & Running a Small Business, is another excellent resource, also published by Nolo Press. Be sure to check out the other excellent references published by Nolo.

Zinsser. On Writing Well. Harper &Row, 1976, 2006. Strunk and White. The Elements of Style, 4th Ed. Allyn & Bacon, 1979, 1999. These two classics belong of every writers desk, and all business owners should be writers. They are short and filled with insight for writers of all levels. Just read the reviews at Amazon.