Management

In Good to Great, former Stanford business professor Jim Collins offers a primer on turning the average into the exceptional. Through detailed case studies of 11 companies that went from tracking the market to exceeding it by at least 3x, Collins presents the key factors that separate merely good organizations from great ones—from rare leadership to disciplined thinking to the dogged pursuit of a core mission. 

Whether you’re an entrepreneur, a manager, or just an individual looking to improve, the concepts in Good to Great provide food for thought—and spurs to action. You’ll learn what it takes to be a “Level 5” leader, why assembling the right team first is more important than having the right idea, why you should be more like a hedgehog than a fox, and why “stop doing” lists are as important as “to do” lists.   

Jocko Willink and Leif Babin are two Navy SEALS who, among other accomplishments in their service, led teams in the Iraq War. After their experiences in battle, they began applying their leadership principles to business as consultants.

Despite the superficial differences between warfare and business, there are strong parallels in effective leadership in both arenas. Extreme Ownership combines classic management principles with Jocko and Leif’s vivid stories of warfare. In these highest of stakes, common management refrains like “own your results” and “keep it simple” take on a gravitas that make everyday corporate concerns seem like petty squabbles.

In this Extreme Ownership book summary, learn:

• How to handle failure.
• How to get other people to listen to you and disarm their resistance
• What prioritizing the result above all else really means
• Why you need to take full ownership of everything that occurs in your life

Michael Porter is considered the father of modern business strategy. One of Harvard Business School’s most famous professors, he originated the ideas of “five forces” industry analysis, the value chain, and competitive advantage.

Like fashion trends, most business ideas come and go. Frameworks are shown to be poorly predictive of success, or apply only to a narrow set of situations. That Porter’s ideas are still widely used in management consulting and taught in MBA programs today, 40 years after introduction, are testament to their enduring utility.

Porter’s seminal works are two tomes, Competitive Strategy and Competitive Advantage, covering 1,000 pages of business strategy. This book, Understanding Michael Porter, is an accessible distillation of the core principles by Joan Magretta (Porter collaborator and former Bain partner).

When I started my first business, Understanding Michael Porter revolutionized my conception of what successful businesses do and what strategy is. It’s not an understatement to say that it gave me an entirely new lens to look at leading businesses and understand how they operate.

In this Understanding Michael Porter summary, learn:

• Why “aiming to the best” is a stupid business strategy
• The five forces that tell you how profitable an industry is
• Why choosing what not to do is as important as what to do
• How IKEA and Southwest Airlines built master strategies that have endured for decades

The failure of Enron in the early 2000’s is one of the largest bankruptcies in US history (with Lehman Brothers in 2008 as the largest). Its accounting scandal led to Enron’s bankruptcy as well as the dissolution of Arthur Andersen, one of the big five accounting firms. Shareholders were wiped out, and tens of thousands of employees left with worthless retirement accounts.

Today the name “Enron” still evokes a reflexive repulsion, a feeling that these were simply bad people doing illegal things. But, we think, that’s in the past. Surely we’ve evolved as a society, and by thinking hard enough, you or I can avoid these problems.

In reality, when you dig into the details, Enron’s downfall is the predictable mixture of human greed, poorly structured incentives, and lack of sanity checks when everyone has their fingers in the pie. You might be surprised to learn that most of Enron’s accounting tactics were not technically illegal at the time – they were actually publicly celebrated for being financial innovations. Shareholders, employees, investment bankers, and accountants all benefited from the situation and enabled Enron for years. They only stopped when it became untenable.

The Smartest Guys in the Room, by former Fortune reporter Bethany McLean, is a fantastic recounting of the rise and fall of Enron. It shows how, layer by layer, the fragile house was constructed until it became impossible to sustain.

In smaller ways, we too are subject to the same pulls as Enron managers and employees. The warning – if we were put into the same situation, we might not have behaved any differently.

In this Smartest Guys in the Room summary, learn:

• The key conditions that enabled Enron’s corruption and allowed stakeholders to look the other way
• The financial maneuvers that allowed Enron to disguise its fundamental financials
• Practices to avoid in your own life