1. strategy+businessissue 69 WINTER 2012Best Business Books 2012by Alice schroeder, phil rosenzweig, shaun holliday, krisztina z holly,j. philip lathrop, sally helgesen, and james otoolereprint 00148

2. BEST BUSINESS BOOKSbest books 2012 introduction 2012 CONTENTS Biography Virtuosity Squared Strategy Considering Competition Marketing Brand New Alice Schroeder Phil Rosenzweig Shaun Holliday 1 56 61 66 s+bs TOP SHELF s+bs TOP SHELF s+bs TOP SHELF Jean Edward Smith, Amitava Chattopadhyay Jim Stengel, Grow: Eisenhower in War and Rajeev Batra, with How Ideals Power strategy+business issue 69 and Peace (Random Aysegul Ozsomer, The New Growth and Profit at House, 2012) Emerging Market Multina- the Worlds Greatest tionals: Four Strategies for Companies (Crown Disrupting Markets and Business, 2011) Building Brands (McGraw- Hill, 2012) Illustrations by Harry Campbell

3. NEW and improved! This promise gets slapped on business books as often as on household cleansers. Many books are new each year,but those with genuine insight and value are very rare indeed. We take the time to find them. In strategy+businesss BestBusiness Books 2012, our team of distinguished experts someveterans of this annual special section, namely James OToole,Sally Helgesen, Phil Rosenzweig, and Z Holly, and somenewcomers, Alice Schroeder, J. Philip Lathrop, and Shaun Holliday review 21 tomes published between the autumn of 2011 andthe autumn of 2012 that fulfill their promise. Be sure to take a close look at our Top Shelf selections our reviewers picks as the best of this years best business books.They include a new appraisal of Dwight David Eisenhower that will best books 2012 introductionprompt you to consider your own effectiveness as a leader, a realisticplan for improving healthcare that eschews political rhetoric forpractical solutions, an exploration of cloud computing that getsbeyond the surface technological story to look more deeply at howit will change business practices, and four more books that merityour time and attention. Theodore KinniInnovation Healthcare Organizational CapitalismContext Is King Beyond the Rhetoric Culture Of Markets and MoralsKrisztina Z Holly of Reform Small Talk James OToole70 J. Philip Lathrop Sally Helgesen 83 55 2 74 78s+bs TOP SHELF s+bs TOP SHELF s+bs TOP SHELF s+bs TOP SHELFThomas M. Koulopoulos, Joe Flower, Healthcare Marvin R. Weisbord, Jonathan Haidt,Cloud Surfing: A New beyond Reform: Productive Workplaces: The Righteous Mind:Way to Think about Doing It Right for Half Dignity, Meaning, and Why Good PeopleRisk, Innovation, the Cost (Productivity Community in the Are Divided byScale, and Success Press, 2012) 21st Century: 25th Politics and Religion(Bibliomotion, 2012) Anniversary Edition (Pantheon, 2012) (Jossey-Bass, 2012) Reprint No. 00148

4. B E S T B U S I N E S S B O O K S 2 0 12 / B I O G R A P H Y Jean Edward Smith, Walter Isaacson, Mark Kurlansky, Birdseye: Eisenhower in War and Peace Steve Jobs The Adventures of a Curious Man (Random House, 2012) (Simon & Schuster, 2011) (Doubleday, 2012) BIOGRAPHY Virtuosity Squared by Alice Schroederbest books 2012 biography GREAT IDEAS OFTEN EMERGE from the collision of two disciplines. So, it seems, do great leaders. The subjects of this years best biographies Dwight Eisenhower, who led two of the worlds largest organizations, the Al- lied forces in Europe during World War II and the U.S. government; Steve Jobs, who built the worlds most valuable company; and Clarence Birdseye, a self-taught biologist who pioneered a technology that revolution- ized food production each illustrate how often in- dividual success is rooted in a merging of disciplinary virtuosity. Eisenhower combined political genius with superb executive skills. Jobs wed the sensibility of an aesthete to an innovators appreciation of technology. As for 3 Birdseye, he once said that he was not cut out for a can be read as a chronicle of World War II, a presiden- career in pure science and wanted to get into some field tial coming-of-age story, or a portrait of the United where [he] could apply scientific knowledge to an eco- States as an emerging global superpower. Business read- nomic opportunity. ers, though, should also regard it as an outstanding case study in leadership; in an alternative universe, one Politics and Management cannot imagine Eisenhower running General Motors Eisenhower in War and Peace, Jean Edward Smiths pow- Company into bankruptcy. erful story of the 34th U.S. president, is my choice for Smith portrays Eisenhower as a decisive yet the best biography of the year. Dwight David Eisenhow- thoughtful leader who had a genius for manipulating er was as close to a man for all seasons as we have had written and unwritten rules, bureaucracy, and social among presidents. He successfully led the military, the maps. He made the U.S. presidency look so easy that government, and a university. Ike himself has receded into a faint image of an avun- strategy+business issue 69 Smith, a political scientist, historian, and political cular leader who presided over a dull, prosperous era. economist, is well prepared to tackle Eisenhowers life, Smith corrects numerous errors in accounts by others having previously written biographies of Franklin D. and gives us Eisenhower in full: not only the most pop- Roosevelt and Ulysses S. Grant, the latter another gen- ular president in modern U.S. history, but also one of eral who won a war by overwhelming force. Eisenhower the most effective.

5. B E S T B U S I N E S S B O O K S 2 0 12 / B I O G R A P H Y Eisenhower ended the unwinnable war in Korea, facility at Pennsylvanias Camp Colt, where he com-Smith reminds us, with honor and dignity, and he manded 10,000 men and 600 officers. There, Eisen-sent the Seventh Fleet to protect Formosa from invasion howers logistical skills brought him to the attention ofby China. On the domestic front, he tamed inflation, the War Department.balanced the federal budget, and quelled unemploy- Smith is adept at painting the picture of this andment with the massive public works project of building other episodes that illustrate concretely how Eisenhowerthe interstate highway system. Eisenhower unwound learned to be a leader through a combination of man-the excesses of McCarthyism, ended military foot- agement skills and personal and political diplomacy.dragging over desegregation, and appointed the judge It was at Camp Colt that Eisenhower first displayed awho gave Rosa Parks her seat in the front of the bus. talent for befriending powerful people, many of whomIn one of his most difficult decisions, he sent the 101st were his diametric opposites. One of the delights ofAirborne Division to Little Rock to put down defiance Eisenhower lies in following the maneuvers of the mansof a court order to desegregate the schools. Of course, lifelong campaign to captivate everyone who crossed hishe also made mistakes we have Eisenhower to thank path. The egotistical, flamboyant George Patton wasfor the CIA coup that overturned a government in Iran, Eisenhowers first major conquest, and Patton promptlywith repercussions still felt today. handed him another by introducing him to Brigadier Perhaps Eisenhowers most significant legacy, General Fox Conner. best books 2012 biographythough, was to show the value of cooperation and re- Conner wielded immense power as chief of staff tostraint. He thawed the Cold War, beat back attempts General John J. Pershing, who had led U.S. forces inat gunboat diplomacy by U.S. allies, and worked easily World War I. Conner became entranced with Eisen-across party lines. He also crushed two attempts by the hower, and trained him in military history, psychology,National Security Council to use atomic weapons after and the art of persuasion. In a dramatic example ofWorld War II, insisting on a policy of deterrence instead. the power of mentorship, he rescued Eisenhower from Nothing in Eisenhowers early life pointed to his trouble, intervened on his behalf over and over, and ar-brilliant future. He was born in 1890, the third of seven ranged for him to work directly for Pershing.sons raised by a pair of religious eccentrics in Abilene, Luck by all accounts featured prominently inKan. With no funds to attend college, Eisenhower made Eisenhowers career so much so that Patton declaredthe most of a lucky break the beginning of a lifetime his initials D.D. stood for Divine Destiny. Yet Smithpattern when he won a competitive examination for illustrates repeatedly that Eisenhower advanced because he never wasted his oppor- tunities. Under Pershing,Eisenhower made the U.S. presidency he exhaustively studied the 4look so easy that he has receded into a battlefields of World War I. He graduated first infaint image of an avuncular leader who his class after winning ad- mission to the exclusivepresided over a dull, prosperous era. Army War College. His staff work sent him to key strategic posts in Paris, thean appointment to West Point, an opportunity usually Philippines, and the Panama Canal Zone. In anothergiven to those with political connections. lucky stroke, Eisenhower was put in charge of creating a At West Point, Eisenhower graduated 61st out of wartime mobilization plan that brought him into con-164 cadets in his class, where he was known mostly for tact with financiers and businessmen.his practical jokes and football skills. His early military By the start of World War II, Eisenhower hadcareer was undistinguished until he took a course in the served in the military for 27 years. His career progressArmys first tank school and realized the new technol- was glacial by the standards of todays wireless world.ogy would revolutionize battle tactics. As a result, less Yet one of Smiths insights is that the militarys thenthan three years out of West Point, Eisenhower was rigid promotion system gave its officers experience andcharged with creating the first stateside tank training authority, which encouraged independence of thought.

6. B E S T B U S I N E S S B O O K S 2 0 12 / B I O G R A P H Y When George Marshall chose Eisenhower as chief of president reached a crescendo, Eisenhower set what the armys war plans division in 1942, Eisenhower was must be a record for coyness by lingering in Europe a protg of nearly every important army general officer, with NATO rather than filing in the early primaries. and understood mobilization in a European theater bet- His sponsors determined as always won him the ter than anyone. nomination through a brokered convention that resem- Smith details Eisenhowers ascent from staff offi- bled a coup. Once more, Eisenhower made the most of cer to wartime leader of the Allied forces as a triumph his opportunity; during the eight years he spent in the of executive ability, political acumen, and judgment White House, his legacies multiplied as fast as his popu- honed through harsh experience of battles barely won. larity ratings rose. Eisenhower was a weak strategist. His skill at build- Smiths magisterial book sparkles throughout with ing consensus served him poorly as a field commander, lessons from Eisenhowers life and career. Late in his but helped him become a military statesman who held years, the former president warned that the U.S. must together a fractious alliance that included FDR, Win- avoid becoming a community of dreadful fear and ston Churchill, Joseph Stalin, Charles de Gaulle, and a hate, and be, instead, a proud confederation of mutual handful of strong-willed generals. The toughest, loneli- trust and respect. Forging these confederations was est decision Eisenhower faced was whether Allied forces how Eisenhower changed the world. Its a worthwhile should cross the English Channel lesson to consider as we face thebest books 2012 biography on June 6, 1944. Smiths account challenges of our own age. of Operation Overlord is absorb- ing both as a military story and Aesthetics and Technology as a personal drama. Eisenhower Walter Isaacson opens Steve Jobs staked his career on the decision with the tale of a wavering court- to launch D-Day, and it led to the ship in which Jobs first seeks him victory that catapulted him into out to write his biography, then the White House. becomes skittish, and finally re- Eisenhower is an evenhanded commits when his pancreatic can- account that reveals the sources cer advances and it is clear Jobss and reasoning behind its conclu- story will soon end. Jobs spoke sions, a signature of a great his- openly to Isaacson of his enemies, torian and confident researcher. friends, erstwhile friends, and, to a Smith does not shy from showing lesser degree, himself. Others filled Eisenhowers flaws, including a in the rest of the portrait of one 5 fundamental impenetrability that of technologys most charismatic occasionally turned to coldness. Smith lays out his pas- titans along with providing a much-needed check on sionate wartime affair with his bright, attractive British Jobss tendency to create his own reality. driver, Kay Summersby. While Eisenhower contem- Jobs saw his importance in his ability to stand at plates marrying Summersby, he gushes a flood of in- the intersection of the humanities and the sciences, a sincere letters to his wife, Mamie: I desperately miss theme that he suggests and Isaacson adopts for the bi- you. Then he drops Summersby by sending her an ography. By this, Jobs did not mean he simply stood impersonal note when he returns home after the war to there; he plainly saw himself as transmuting these disci- re-embrace Mamie and his ambitions. George Pat- plines through the alchemy of his genius into a perfect- ton would have said a warmer goodbye to his horse, ed whole. (Jobs never claimed to be modest.) He cared notes Smith. about the tiniest details and relied on a powerful intu- After the war, Eisenhower, who claimed he wanted ition to bring emotional resonance to designs that he strategy+business issue 69 to semi-retire and live on a farm, took on high-profile insisted be executed flawlessly. Trying to copy Jobs, one work while Harry S. Truman finished out his second source observes, would be like trying to copy Picasso by term as president. He set Columbia Universitys fiscal using red paint. In fact, the lessons in his story are most house in order as its president and served as supreme powerful when considered as a cautionary tale. commander of NATO. When calls for him to run for Steven Paul Jobs was born in 1955, the son of an

7. B E S T B U S I N E S S B O O K S 2 0 12 / B I O G R A P H Yunmarried Wisconsin university student and a Syrian niak as engineer and Jobs in the role he would even-Muslim teaching assistant, who put him up for adop- tually settle into permanently: visionary and promoter.tion. His adoptive father, Paul Jobs, a high school drop- Jobss journey as a manager and business partner cov-out with a passion for mechanics and woodworking, ered much rougher ground. Among the many unfortu-instilled in his son an appreciation for the sanctity of nate episodes are his ungracious treatment of Wozniakcraftsmanship. Growing up in what would become Sili- and his lovehate (mostly hate) relationship with Billcon Valley, the boy was surrounded by friends whose Gates, who was generous in his comments about Jobsparents were engineers. for the book, only to be repaid with insults. Jobss great- To his credit, Isaacson makes clear that Jobs was est business error took place when Apple went throughby no means destined for greatness. Had he been raised a Silicon Valley rite of passage, the transition from theas a SyrianAmerican by his dreamy, peripatetic birth founderCEO to professional management. Jobs lostmother in Wisconsin, there is no telling how his life the confidence of CEO John Sculley through his insis-would have turned out. As it did transpire, Jobs often tence on (mis)managing the Macintosh division, whichwas his own worst enemy. This point is made unmis- led to his ouster as chairman. But being rejected by histakably, and entertainingly, through accounts of his bo- own brainchild at age 30 focused Jobs on what mat-hemian, bizarre, selfish, willful, and cruel behavior. tered. The ensuing years brought the NeXT computer; Early on, Jobs forces his much-loved adoptive par- animation by Pixar; and eventually, a second chance at best books 2012 biographyents to cripple themselves financially by sending him Apple that yielded iTunes, iPhoto, the iPod, the iPhone,to expensive Reed College then bristles at the con- and the iPad.cept of a curriculum, drops out after six months, hangs Isaacson details these stories as evolutionary rungsaround auditing classes that suit his aesthetic tastes on a ladder of creativity. One innovation follows anoth-(such as modern dance), and lives on money scrounged er, as Jobs and his company ascend to iconic heights.by cashing in soda bottles for deposits. (Eventually, he Each of these products also came to market accompa-gave his parents Apple stock.) The younger Jobs trips nied by lots of collateral damage. Jobss relationships inon LSD, pirates Bob Dylan tapes, flirts with the Hare business were complicated by the fact that he was, as aKrishna movement, and refuses to bathe. At one point, contemporary describes, full of broken glass as a re-a Hindu holy man in the Himalayas spots, or perhaps sult of his early abandonment to adoption. He was thesmells, Jobs, and grabs him in order to lather and shave opposite of loyalanti-loyal, according to a colleague:him. Unfortunately, the lesson did not stick. a tyrant at work and a frighteningly cold, reject- Jobs would later attribute much of his success to ing narcissist in his personal life, who attracted peoplethis period, even making the preposterous claim that through brief displays of interest, only to mistreat andhad he not audited a calligraphy class, its likely that no abandon them. 6personal computer would have had multiple typefaces Implicitly, Steve Jobs raises the question of whetheror proportionally spaced fonts. Fortunately, he soon be- indifference to social norms and a degree of madnessgan working with Steve Wozniak, a former high school are requirements of creative genius. As he rises, Jobsclassmate who had a sizable tolerance for grandiosity. lives on fruit to ward off mucus, soaks his feet in theThe two had bonded as teenagers over an idea spotted toilet to relieve stress, offends his colleagues with hisin an Esquire article by Wozniaks mother that described filthy body, falls into fits of tears during business meet-how hackers pirated free phone calls. Wozniak built a ings, and turns orange from eating only carrots.circuit that could control AT&Ts routers, which Jobs In a sense, Jobs is the un-Eisenhower. He is indif-figured out how to package and market at a 78 percent ferent to working through procedures and followingprofit margin. This experience taught the two teenagers rules, including the most basic rule of acknowledgingthey could control billions of dollars worth of infra- reality, which Isaacson describes in multiple breathtak-structure, writes Isaacson. It also, says Wozniak, gave ing scenes of lying and self-deception. Seductive as aus a taste of what we could do with my engineering Svengali-like, mesmerizing but corrupt preacher, Jobsskills and his vision. It was the first of many visions enchants business partners into making deals that he re-based on breaking rules. vokes on a whim. Outraged at the thought of anyone Reunited in 1976, the pair founded Apple Comput- stealing his ideas, he takes pride in pilfering intellectualer in the proverbial garage with US$1,300, with Woz- property from Xerox. Stopped for speeding, he honks

8. B E S T B U S I N E S S B O O K S 2 0 12 / B I O G R A P H Y at the policeman for not writing the ticket fast enough. Most people think the Birds Eye brand emblazoned Because Jobss rule-breaking attitude is part of his suc- on packages of frozen vegetables has something to do cess, these stories are amusing, up to a point. But when with an actual bird. But Kurlansky tells us otherwise. In he horrifies his friends and family by refusing conven- Birdseye: The Adventures of a Curious Man, he relates the tional medical treatment for a curable form of cancer, story of Clarence Birdseye, the man who changed the his willfulness becomes a tragic flaw. way the world eats by figuring out how to flash-freeze Jobss lack of introspection complicated Isaacsons food on an industrial level. Thanks to Birdseye, by task. (At one point, he simply ignores a question about the 1930s, people who previously had lived on mushy why he felt a kinship with two belligerent, driven canned goods in the winter were enjoying fresh-tasting and doomed fictional characters, King Lear and food year-round. Captain Ahab.) Steve Jobs also was completed while Jobs Ever since childhood, Birdseye was an amateur was dying, and published a few weeks after his death. naturalist who kept his eye on turning a profit from his One cant help but wonder how the timing affected the hobby. Born in Brooklyn in 1886 to a prominent and interviews, as well as what fruit might remain on the wealthy family, he encountered the wild as an 8-year- tree in the form of sources who did not cooperate. old when his family bought a farm on Long Island. The biographers portrait, despite stories and com- Two years later, he trapped a dozen live muskrats and mentaries that soften the edges, is shipped them to a customer hebest books 2012 biography of Jobs as detestable genius. His found in England. While attend- charisma apparently made some ing college at Amherst, he sold people loyal to him. But Jobs, in his frogs to the Bronx Zoo for reptile own words as quoted in the book, chow, and collected rats of a near- is anything but charismatic, which ly extinct species from behind a means readers who encounter him butcher shop to sell to a geneticist. on paper are unlikely to feel it. Birdseye was forced to drop Fifty years from now, when out of Amherst when his parents the iPad and the iPhone are super- fell into financial distress around seded, what will people remember 1908, during one of the worst about Steve Jobs? His crystalline banking and economic crises in focus. His defining taste. His per- U.S. history. He took a job with fectionism. His intuitive salesman- the U.S. Biological Survey count- ship. And a pragmatic streak that ing coyotes in New Mexico and expressed itself in understanding Arizona and hunted the ticks that 7 design from the users point of view. caused Rocky Mountain spotted Jobs admired the titans of industrial design, people like fever, but eventually his commercial instincts led him Raymond Loewy. In the end, he became one of them, into fur trading. After collecting bobcat and coyote and more, because he also had the will and the wiles skins in the western U.S., he moved north to search for to forge his creative genius into the worlds most valu- fox and ermine pelts by dogsled in Labrador. able company. Birdseye entertains readers with stories of its sub- jects consumption of delicacies as varied as skunks Science and Business and horned owls, a particular favorite being fried rab- Mark Kurlansky, author of Cod: A Biography of the Fish bit livers. Birdseye was omnivorous and obsessed with That Changed the World (Walker & Co., 1997) and Salt: food, and in the frozen North, a hunger for the taste of A World History (Walker & Co., 2002), likes to take freshness had a lasting effect, Kurlansky writes. his readers down the mineshaft into narrow subjects It was in Labrador that Birdseye discovered the strategy+business issue 69 in this case, the life of an unusual man and use flash-freezing process that would transform food pro- those subjects to unearth hidden realms in the commer- duction. Kurlansky keeps the story moving, although cial universe. Here, he also fills an important niche by the second half of the book, which details how Bird- documenting the life of an entrepreneur who changed seye invented the freezing equipment and brought his the world. product to market, is necessarily dry compared to the

9. B E S T B U S I N E S S B O O K S 2 0 12 / S T R AT E G Yaccount of the early years in Labrador. A highlight is To be great, a biography must do more than tellBirdseyes aptitude as a promoter, which was essential to us an interesting life story; it must teach us somethingwinning over resisters, whether culinary conservatives new and worthwhile about ourselves or the world. Thisor people suspicious that the new technology was tam- years best biographies do just that: They illuminatepering with Gods intentions. By the mid-1940s, U.S. realms forgotten and unknown, and contain lessonshouseholds were convinced: In 1945 and 1946, they that range from inspirational to cautionary. Above all,bought 800 million pounds of frozen food. the lives of Eisenhower, Jobs, and Birdseye give us a col- Birdseyes success came from a marriage of two lective portrait of the enormous potential that can bequalities. He needed his business skills to make his unleashed when two fundamental, and even opposing,scientific ambitions a reality, just as Jobs needed his skills are combined in a single human being. +aesthetic sense to ignite his technological visions andEisenhower needed his political genius to lever his exec-utive ability. Birdseye died at age 69 in 1956, a year af-ter Jobs was born. The business he built had become so Alice Schroederubiquitous that the man himself was forgotten. It took alice@aliceschroeder.com is an investor, journalist, and best-selling author of The50 more years for Kurlansky to arrive and recognize the Snowball: Warren Buffett and the Business of Life (Bantamneed for a biography. Books, 2008), selected as a 2009 s+b best business book. best books 2012 strategyAmitava Chattopadhyay and Rajeev Ikujiro Nonaka and Zhichang Zhu, Benoit Chevalier-Roignant and LenosBatra, with Aysegul Ozsomer, The New Pragmatic Strategy: Eastern Wisdom, Trigeorgis, Competitive Strategy:Emerging Market Multinationals: Four Global Success (Cambridge University Options and Games (MIT Press, 2011)Strategies for Disrupting Markets and Press, 2012)Building Brands (McGraw-Hill, 2012)STRATEGYConsidering 8Competitionby Phil RosenzweigIN 2005, ONLY 44 of the companies on Fortunes Global500 list were from emerging markets. In 2010, therewere 113 emerging-market companies on the list, anincrease of more than 150 percent. What led to this sig-nificant increase in just five years? Thats the question taken up in this years bestbusiness book on strategy, The New Emerging Mar-ket Multinationals: Four Strategies for Disrupting Mar-kets and Building Brands, by Amitava Chattopadhyayand Rajeev Batra with Aysegul Ozsomer, professors at

10. B E S T B U S I N E S S B O O K S 2 0 12 / S T R AT E G Y INSEAD, the University of Michigan, and Ko Univer- India, Korea, Mexico, and Turkey, but also from Guate- sity in Istanbul, respectively. In a strong field, the book mala, Jordan, Taiwan, Thailand, and more. stands out for taking on the important topic of global Two of the strategies are familiar. Some EMNCs competition, and presenting original findings in a man- are indeed the stereotypical cost leaders, using their ad- ner thats engaging and accessible to practitioners. vantaged cost structures, often related to wage differ- The authors central argument is that the new gen- entials, to achieve competitive success in new markets. eration of emerging-market multinational companies Others are knowledge leveragers, drawing upon their un- represent a trend that will transform the global economy. derstanding of home country customers to achieve suc- These EMNCs (the authors abbreviation) are no longer cess elsewhere, perhaps following the diaspora of home content to play a secondary role in their industry. They country emigrants. have, write the authors, the ambition, vision, and con- More interesting are the growing numbers of fidence to want to become global giants themselves. EMNCs pursuing a third strategic path. They are Some of them, such as South Koreas LG Electronics and seeking to employ their particular advantages of knowl- Chinas Lenovo, have been well known for years. Oth- edge and innovation while avoiding direct competition ers, including Indias Wipro, Taiwans HTC, and Chinas with powerful incumbents. These niche customizers Haier, have only recently raised their global profile. And identify specific customer segments, often small and ap- still others are just starting their parently unattractive within largerbest books 2012 strategy ascent to the global stage; these in- markets, where they can use their clude Indias Apollo Tyres, Turkeys expertise to establish strong beach- Arelik, and Brazils Natura Cos- heads and eventually expand their meticos. If the current trend con- positions. An example is Mahin- tinues, the list of high-performing dra & Mahindra Ltd., which used companies from emerging markets its expertise in producing small will grow, and extend to more and tractors in India to expand into more industries. the niche markets of lawn care For some established multina- and golf course maintenance in tional corporations (MNCs), The the United States and Australia. New Emerging Market Multina- Similarly, Haier chose not to enter tionals will explain the strategies the U.S. market with large refrig- being followed by new competitors erators, but instead went after the that are already roiling their mar- niche market for small refrigera- kets. For others, the book offers tors, suitable for dormitory rooms 9 a glimpse of the future, in which or wine cellars, and only later ex- their competitors will come from all over the world. panded its product line. For EMNCs aspiring to succeed in the global arena, The fourth strategy, that of global brand builders, the book explores the immense strategic challenges to represents the most dramatic approach. Just a few years come. Not only must they compete against large and ago, many EMNCs either were original equipment established incumbents, but they must overcome dis- manufacturers or sold low-value branded products. To- advantages, some real and others perceived, associated day, many of these companies have developed global with image, brand, and culture. Any successful strategy brands known for their high quality, including not only must not only neutralize the advantage of incumbents, familiar names like HTC and Wipro, but also, as not- but find new sources of competitive advantage. Hence ed earlier, Natura Cosmeticos and Apollo Tyres. This the reference to disruption in the books subtitle. transformation is especially ambitious, but it holds the The book debunks the idea that todays EMNCs promise of the highest margins and a position of parity strategy+business issue 69 are succeeding only because of advantaged cost posi- with the best companies in the world. tions or generous resource endowments. The authors The authors contend that to succeed on the world identified four strategies in the course of their research, stage, EMNCs aspiring to be global brand builders face which included the study of 39 EMNCs, not only from two challenges: one concerning the need to establish a the largest emerging economies such as Brazil, China, business of global scale, and the other related to build-

11. B E S T B U S I N E S S B O O K S 2 0 12 / S T R AT E G Ying a global brand. Without a sustainable global busi- Japanese companies, including Matsushita and Toyota,ness model, building a global brand is a waste of time succeeded in creating brands with global appeal andand resources, they write. On the other hand, a global shattered the low quality image of Japanese prod-business built on an unbranded commodity basis is not ucts. But they struggled to solve the problem of attract-likely to be very profitable or sustainable long term. ing and retaining local talent, and to become global inBoth are essential and each one reinforces the other, yet outlook. A new crop of EMNCs would do well to ac-they require very different capabilities, confront differ- knowledge how one source of strength a strong andent obstacles, and move at different rhythms. distinctive culture can become a limitation on the One might argue that all MNCs, no matter their broader global stage.country or era, have faced these twin challenges, but the The New Emerging Market Multinationals is anauthors think that the challenge facing EMNCs today important addition to the strategy bookshelf because it helps us understand the logic behind the rise of com-If the current trend continues, the list panies from emerging mar-of high-performing companies from kets, including many new powerhouse firms in elec-emerging markets will grow and tronics, vehicles, services, best books 2012 strategy healthcare, and other in-extend to more and more industries. dustries. The book serves a broader purpose as well, and reminds us of eternal stra-is greater. Achieving global scale in the 21st century, tegic questions, such as how to identify, develop, andwhen incumbents are already large and well developed, sustain a competitive advantage in crowded and unfor-calls for particular care. For some, it means avoiding giving fields.direct confrontation by expanding first in peripheralmarkets; for others, it involves large and complex ac- Confucius Saysquisitions, such as Apollo Tyres acquisition of Dunlop, A complementary perspective is provided by Pragmat-Tata Motors purchase of Daewoo Trucks and Jaguar, ic Strategy: Eastern Wisdom, Global Success, by Ikujiroand Lenovos takeover of IBMs personal computer divi- Nonaka, professor emeritus of Hitotsubashi Universityssion. Developing a global brand, meanwhile, calls for Graduate School of International Corporate Strategy,a step change in how an EMNC presents itself and is and Zhichang Zhu, a lecturer in management at theperceived by customers around the world. Hull University Business School in the United King- 10 Not surprisingly, the authors, who are marketing dom. Like the authors of The New Emerging Marketprofessors, devote much attention to the topic of brand Multinationals, Nonaka and Zhu cite evidence of thebuilding. But they are wise to note that without a solid tectonic shift in global competition caused by the grow-organization to back it up, efforts to establish a pow- ing number of emerging market multinationals, in par-erful brand will eventually come to naught. Creating a ticular mentioning those from East Asian nations. Butsustainable business model is achieved through the hard rather than looking to business activities such aswork of attracting and retaining talent, of pursuing in- brand building, market segmentation, and leveraging ofnovation and quality, and of building processes that capabilities to explain this trend, Nonaka and Zhucan handle daily tasks including procurement, logistics, examine the broader societal elements of culture andand sales. They quote Priti Rajora, Wipros head of tal- philosophy.ent management, who commented that one of Wipros Is the rise of EMNCs, and the development of thegreatest challenges was to evolve from being an Indian economies from which they come, testimony to somecompany to being one in which any employee from wisdom shared among Eastern cultures? Conversely, areanywhere in the world had an equal opportunity to rise the recent problems in the West, including debt crises,within the company. financial meltdowns, and economic stagnation, linked Such a view is especially important in light of re- to flaws in the philosophies that underpin their societ-cent history. Looking back just one generation, several ies? It is an intriguing thesis and well worth exploring,

12. B E S T B U S I N E S S B O O K S 2 0 12 / S T R AT E G Y in part to better appreciate the fact that strategy is a re- mately self-defeating. flection of, and embedded in, a larger context. The authors find evidence of pragmatism in Asian The authors illuminate the relationship between companies, including Honda, Canon, Lenovo, and strategic action and its social context through a sweep- Haier. They also discuss Nobel Peace Prize joint win- ing examination of ideas in Eastern and Western phi- ners Muhammad Yunus and Grameen Bank. The revo- losophy and literature. As the books title suggests, their lutionary microfinance bank Yunus founded in Bangla- central focus is pragmatism, by which they mean the desh is a notable example of pragmatism because of its purposeful accomplishment of idealistic, informed, dis- willingness to adapt and experiment, according to the ciplined experimentation that blends a sense of pur- authors. But they recognize that pragmatism is not the pose and idealism with flexibility. Pragmatism is not exclusive domain of the East. It is present in the think- anything goes or opportunism without purpose, they ing of Aristotle, for example, and they note that it also write. Rather, it requires learning and sound judgment. resembles what Jerry Porras and Jim Collins called core Pragmatic strategies, say Nonaka and Zhu, succeed values in their influential book Built to Last: Successful due to sheer down-to-earth vigilance and flexibility. Habits of Visionary Companies (HarperBusiness, 1994). The authors contend that pragmatism is rooted in Con- Indeed, among the first exemplars of successful prag- fucian thinking, and they find matism cited in Pragmatic Strat- more recent evidence of it in mod- egy are Bill Gates of the Microsoftbest books 2012 strategy ern Chinese reforms, citing catch- Corporation and Michael Dell phrases, such as crossing the river of Dell Inc., smart entrepreneurs by touching stones, and Deng whose important influences prob- Xiaopings dictum that the color of ably did not include Confucius, a cat is of no matter so long as it but whom the authors nonetheless catches mice. highlight for their willingness to At the heart of the book, the experiment and adapt. authors discuss three tenets of In the concluding chapter of enduring Confucian wisdom: this scholarly and probing book, Wuli (the materialtechnical), Shili the authors suggest that Shared (the cognitivemental), and Renli Wisdom, Global Success might (the socialrelational). Wuli, which have been a better subtitle. Prin- focuses on technical efficiency, ciples of balance and a goal of involves getting the fundamental achieving common goodness are elements of the organization work- indeed crucial in todays world,11 ing well together. Shili, which is concerned with cre- and reminding ourselves of the shared wisdom that un- ativity, provides a vision of a desired future. And Renli, derpins managerial action is of high importance. which speaks to the value of social legitimacy, concerns Yet for all its strengths, I still have a few quarrels achieving common goodness. with this book. The recent growth of emerging econo- Rather than following a linear logic of setting goals mies might seem to be the result of pragmatic policies, and taking action, or ends driving means, these three but its worth recalling that Dengs comment about the concepts are mutually reinforcing, and each can be color of a cat was meant as a corrective to years of doc- seen as a point of departure. When approached prop- trinal Communist ideology, which was itself a reflection erly, pragmatic strategy creates a balance among the of Chinese thinking. Indeed, Confucianism is often three, say the authors, that generates value efficiently, connected with ideas such as obedience, hierarchy, duty, creatively, and legitimately by getting fundamentals and filial piety, hardly what we associate with pragma- right, envisioning a valued future and realising com- tism. Current successes notwithstanding, it is question- strategy+business issue 69 mon goodness. Harmony and balance are the keys to able whether Chinas emphasis on central initiatives, success here; efforts to emphasize one tenet over the like its succession of five-year plans, is better under- others will fail. Thus, strategies based on narrow finan- stood as a reflection of pragmatism or as evidence of a cial goals or notions of efficiency that ignore social and traditional Chinese emphasis on hierarchical direction. human consideration are not only incomplete, but ulti- Further, almost any example of success can be described

13. B E S T B U S I N E S S B O O K S 2 0 12 / S T R AT E G Yas the result of pragmatism. Terms like core vision and theory adds the competitive dimension, as each playersbalance and adaptability are easy to infer ex post when moves take into account the actions of rivals.companies are successful, but are conspicuously absent Competitive Strategy is replete with mathematicalwhen companies fail. formulas and discussions of theory that can be daunt- These concerns notwithstanding, Pragmatic Strat- ing, but the authors do several things that make theegy remains a fascinating book that spurs us to think book a worthy read for all strategists. First, they offerabout strategy in its broader philosophical context, and many examples from the business press to ground theadvances important hypotheses about the values and book in real-world decisions. They illustrate the prob-ideas behind the growing success of companies with lem of how best to expand capacity, for instance, by cit-roots in Confucian thinking. ing Virgin Atlantics choice in 2004 to double its fleet with the purchase of 13 Airbus 340s, large four-engineOption Games aircrafts, in an effort to match rival British Airways inAn equally scholarly book, but one that addresses a very scope, and Air Canadas choice in 2005 to purchase thedifferent aspect of strategy, is Competitive Strategy: Op- Boeing 787 Dreamliner for its superior fuel efficiencytions and Games, by Benoit Chevalier-Roignant, a re- on long-haul flights. The decisions the companies madesearcher at University of Texas at Dallas, and Lenos Tri- were very different: Virgin preferred a large, lump-sumgeorgis of the University of Cyprus, one of the leaders capacity expansion; Air Canada followed an incremen- best books 2012 strategyin the field of real options. For readers interested in the tal and flexible approach. But both can be understoodtheoretical underpinnings of competition and strategic by the combined power of game theory, which consid-choice, its an important contribution to the field as well ers competitive forces, and the insights of real options,as an engaging book. which examine sequences of decisions over time. The authors explore two theoretical traditions Second, the authors provide brief interviews withgame theory, which comes from economics, and real leading thinkers in game theory and real options, in-options, which traces its roots to finance and show cluding Princeton economist Avinash Dixit and Nobelhow their insights can inform many kinds of strategic laureates Reinhard Selten and Robert Aumann. Thesedecisions. Game theory, of course, has long contrib- interludes provide additional perspective and help il-uted to our understanding of moves and countermoves luminate key concepts, as well as adding personal andin competitive situations. More illuminating for many idiosyncratic accounts of their careers. The result is thatreaders will be the treatment of real options, which is a the reader gains a sense of how the field has developedmore recent theoretical development, but can help man- and an appreciation of how two separate strands ofagers think in terms of the sequence of decisions they thinking, one from economics and one from corporatemake over time. finance, can inform strategic decisions. 12 Many kinds of options, such as puts and calls in the Competitive Strategy, like Pragmatic Strategy, is richstock market, can be traded in financial markets, but the with ideas that will stretch and challenge the reader. Thedistinguishing feature of real options is that they can- New Emerging Market Multinationals is less intellectual-not be traded. Instead, they are opportunities that ac- ly demanding but perhaps more immediately practical.crue only to the owner of an asset, and include decisions What the three books share, however, is a willingnesssuch as whether to expand an existing plant or close it to bring fresh thinking to some of the most importantand build a new one. Whereas traditional analysis of de- questions of global competition and business strategy. +cisions like these has employed calculations made at afixed point in time (such as net present value and dis-counted cash flow), the contribution of real options is tointroduce a temporal dimension and show how strate-gists can respond flexibly as circumstances change. Phil Rosenzweig Most compelling, as well as original, is an integra- phil.rosenzweig@imd.chtive approach to strategy that combines the two ap- is a professor at IMD in Lausanne, Switzerland, where heproaches, which Chevalier-Roignant and Trigeorgis works with leading companies on strategy and organiza- tion issues. He is the author of The Halo Effect...and thecall option games. Real options help illuminate the Eight Other Business Delusions That Deceive Managers (Freedecision to invest or expand, and the addition of game Press, 2007).

14. B E S T B U S I N E S S B O O K S 2 0 12 / M A R K E T I N G Jim Stengel, Grow: How Ideals Laurence Vincent, Brand Real: How Doc Searls, The Intention Economy: Power Growth and Profit at the Smart Companies Live Their Brand When Customers Take Charge (Harvard Worlds Greatest Companies Promise and Inspire Fierce Customer Business Review Press, 2012) (Crown Business, 2011) Loyalty (Amacom, 2012) MARKETING Brand New by Shaun Hollidaybest books 2012 marketing THERE IS ALWAYS A LOT OF NOISE around marketing. And marketers listen to it religiously in their search for the new, new thing and the edge it can confer, especial- ly in highly competitive sectors such as consumer pack- aged goods. But sometimes the noise can drown out core messages about the essence and essentials of a suc- cessful product, service, or brand, and obscure our view of its future direction. This years best business books on marketing all from veteran practitioners rise above the twittering crowd by delivering the kinds of insights that make for compelling listening. An Ideal Brand Jim Stengel, whose name is as widely recognized among13 contemporary marketers as the names of the Procter & Gamble brands he helped build Pampers and Jif, among others is a retired executive who is not content brand ideal is the most powerful lever a business leader to rest on his laurels. His first book, Grow: How Ideals can use to achieve competitive advantage. Power Growth and Profit at the Worlds Greatest Com- Although business scholars may challenge his claim panies, which took root from ideas seeded during his in degree, they are unlikely to challenge it in concept. career, is an ambitious, groundbreaking effort to define After all, Peter Drucker pegged marketing as one of the future of brand management, supported by a study only two results-producing functions in a business (the of tens of thousands of brands put forth by companies other was innovation). And the importance of aligning around the world. organizational design, culture, and capabilities to the In Grow, Stengel examines the extraordinary power companys vision and strategy is well known, as is the and performance that can be harnessed when a brands potential of a company pursuing an inspirational ideal strategy+business issue 69 purpose is defined by a distinctive, fitting ideal. A to unleash exceptional power and commitment in its brand ideal is focused on improving the lives of cus- employees. Until Grow, however, little had been done to tomers, and is managed by a company that passion- put a value on a brand ideal, and limited practical guid- ately identifies with the beliefs and values underlying it. ance had been offered on how to identify one and make Stengel claims that defining and activating a distinctive it central to the company as a driver of focus, growth,

15. B E S T B U S I N E S S B O O K S 2 0 12 / M A R K E T I N Gand competitive advantage. Stengel addresses these poseful manner. This process of discovery results in anquestions directly. ideal statement, which the author articulates for each of The assumption that brands can make a sizable the Stengel 50 brands. Some examples: Amazon.comcontribution to shareholder value is foundational to exists to enable freedom of choice, exploration, and dis-Stengels thesis. In fact, brand and business success are covery. Dove exists to celebrate every womans uniquesynonymous to him because a brand is what a busi- beauty. Google exists to immediately satisfy every cu-ness is all about in the hearts and minds of the people riosity. Louis Vuitton exists to luxuriously accentuatemost important to its future. To support this thesis, the the journey of life.author cites Millward Brown Optimors body of work, The final question how do you make the brandwhich calculated that brand value now accounts for ideal the center of the company? is addressed through-more than 30 percent of the aggregate market capital- out the book. Stengel breaks his answer into four broadlyization of companies in the S&P 500. stated must-do tasks: build a culture around the ideal, Further, Stengel (in partnership with Millward communicate the ideal to engage employees and custom-Brown) designed a new research study of brands, the ers, deliver a near-ideal customer experience, and evalu-Stengel Study of Business Growth, which analyzed ate your progress and people against the ideal. These four10 years of data from more than tasks are highlighted with in-depth50,000 brands. It found that the case studies of various brands, in- best books 2012 marketing50 companies whose brands were cluding Discovery Communica-most strongly associated with im- tions, Pampers, and Zappos, asproving peoples lives the Sten- well as with a plethora of shortergel 50 generated a return on examples.investment that outpaced the S&P Grow is the years best busi-500 by nearly 400 percent. ness book on marketing because it Stengel attributes this huge leaves us with a better understand-performance differential to ideals ing of a brand as the embodiment nothing unites and motivates of a company and its people. Itpeoples actions as strongly as ide- inspires by helping us imagine theals, he writes. He says a brand great things that could happen ifideal defines what a brand is and we united our efforts in service ofis not, and illuminates its strengths a distinctive higher-order brandand weaknesses, as well as current ideal aimed at bettering the livesand potential points of parity and of our customers. 14differentiation. (One of the best lines in the book is aquote from Discovery Channel general manager Clark Brand AidBunting, Great brands say no.) A brand ideal creates If you think of a brand ideal as a promise, Brand Real:enduring connections, uniting and inspiring everyone a How Smart Companies Live Their Brand Promise and In-business touches. It enables a leader to articulate and fo- spire Fierce Customer Loyalty is a terrific companion vol-cus on what is most important in a company. It attracts ume to Grow. It is a pragmatic and comprehensive guidepeople who are most suited, energized, and committed on how to deliver on a brand promise, which is, writesto delivering what matters most to customers and trans- author Laurence Vincent, head of the Brand Studio atforms an enterprise into a customer-understanding ma- United Talent Agency, a covenant with consumers inchine. And it stimulates innovation, in a never-ending the form of a commitment to deliver value. Communi-quest to better serve the ideal. cating and fulfilling this commitment has always been How do you develop a brand ideal? Stengel says difficult; today it is more of a challenge than ever inthat first you must discover how your brand is linked to part, Vincent says, because the millennial generation isone of five fields of fundamental human values (joy, populated with highly skeptical, media savvy, and veryconnection to others and the world, the desire to explore vocal consumers who place a particularly high premi-new horizons, pride, and social responsibility), and then um on a brands authenticity and credibility.activate those links in a distinctive, authentic, and pur- Brand Real tells us in no uncertain terms how to

16. B E S T B U S I N E S S B O O K S 2 0 12 / M A R K E T I N G make a brand promise stand up at every consumer brand experience, and focus their own attention on de- touch point. To achieve this, the book covers the wide livering against those expectations, again and again. territory of brand marketing; focuses in on the key is- The object is to win what Vincent calls the mem- sues, such as brand architecture and communications ory game, by creating links in the consumers mind be- strategy; and provides practical advice for addressing tween what the brand is and why it matters. He argues those issues. that these links among cues, expectations, and experi- Real brands are those that fulfill, and often ex- ence are fundamentally important, because we all favor ceed, customer expectations. These brands, accord- brands (such as Apple) that consistently meet or exceed ing to Vincent, make promises they intend to keep our expectations, and we punish the ones that dont. and make tough strategic decisions about what to of- Brand Real mirrors Grow in its strong advocacy fer and not offer customers, and they grow without of staff engagement as an essential element in brand straying from their sense of purpose. For example, he success. From the executive suite to the front lines to writes, Southwest Airlines has prospered by not doing the investment base, declares Vincent, the best way some things that other airlines do: no assigned seats, no to sustain a real brand is to align the people behind it first-class cabin, no meal service. These omissionsare with the brand promise. That is, branding begins in- fundamental service decisions that drive the business side a company, by ensuring that the values and the model and they contain memo- behaviors of the people workingbest books 2012 marketing rable attributes that make the there are a direct reflection of the brand salient because they sup- brand. If they arent, Vincent says, port the brands promise to deliver its because of one or more of five great value through low fares and factors: ignorance, doubt, incom- friendly service. petence, poverty (a lack of resourc- Vincent thinks that compa- es), and a lack of incentive. And if nies should measure a brands suc- the employees do not reflect the cess by the expectations it creates brand, the brand experience will and the results that it delivers to be flawed and the brand promise users. This requires a reality check will be placed at risk. that mandates answering three At a time when many com- simple, but often ignored, ques- panies are thinking of branding tions about a brand: What is it, as an exercise in creating a com- why does it matter, and how does pelling logo, a sticky website, an it create value? entertaining advertisement, or an15 Brand Real is filled with use- aesthetically pleasing package, ful lessons for marketers. For example, Vincent clarifies Vincent reminds us that branding is first and foremost the difference between a brands promise and its posi- a strategic act. It requires purposeful conduct in the tioning. A brands positioning is the perceptual terri- quest to influence how people behave, both customers tory it claims relative to its competitors. A brand prom- and employees. And like any other business strategy, ise incorporates its positioning, but also articulates the branding should serve as a guide for mission-critical brands reason for existence and defines the benefits of decisions in capital investment, human resources, re- the brand experience in terms of three dimensions: how search, product development, and operations manage- people think, what they do, and how they feel. ment. Thats why Brand Real is as relevant to the CEO Vincent makes a strong argument for brand sim- as it is to the CMO. plicity, which is based on his belief that brands exist be- cause consumers hate uncertainty and therefore rely on A Buyers Market strategy+business issue 69 cues as to what they should expect from products and If Doc Searls is right, the discipline of branding and organizations when making purchase decisions. Thus, indeed, marketing itself could be on the brink of a brand marketers should not place too much empha- fundamental shift. Soon, claims the former advertising sis on symbols, such as a name or logo. Instead, they executive, whose insights into the effects of digitization should seek to clarify the customers expectations of the on markets became the platform for his current career

17. B E S T B U S I N E S S B O O K S 2 0 12 / M A R K E T I N Gas a highly regarded technology writer, consumers will Searlss dramatic prognostications are supported bybe managing business-to-consumer (B2C) companies in ProjectVRM, which he runs and which was launched inmuch the same way as those companies are managing September 2006 from the Berkman Center for Internettheir vendors. & Society at Harvard University. The projects purpose, This change will create a new kind of market the he writes, is to encourage development in an area thatIntention Economy, which is vastly different from the has been largely neglected: empowering individuals current Attention Economy, in which marketers vie to especially customers natively, outside any corporatebe heard. Searlss The Intention Economy: When Custom- or organizational framework. Dozens of companies,ers Take Charge envisions a market in which customers mostly startups, have already subscribed to the VRMare kings: Their orders are followed, their every need vision, and they are in the early stages of developing theis responded to, and they grant sellers an audience only tools and capabilities that consumers will need to takewhen they want to. In this economy, digitally empow- control of markets. Personal.com, for instance, providesered shoppers will build personal firewalls that block individual users (called owners) with a private, fullyout unwanted marketing solicitations, and instead they owned, and fully controlled data vault.will notify their preferred providers about what they Searlss vision raises provocative questions for com-want to buy, when they want to buy it, and how much panies and for marketers. Imagine, for example, anthey want to pay, by issuing the personal equivalent elderly woman who wants a computer that is simple best books 2012 marketingof an RFP. enough for her to operate, or a man who wants a wool Although digitization has empowered consumers sweater in a particular style, or a driver seeking a partwith information and competitively priced goods and for an automobile. Instead of searching for suppliers,services, until now it has likely had a greater influence what if they put their specs online and companies viedon the supply side of markets, spawning innovation in to meet their needs? How would your company respondmanufacturing, supply chain management, marketing, if the clearinghouse for supply meeting demand de-sales, and other business functions. For marketings volved to the level of the individual customer and washunters, digitization has proven to be a high-powered orchestrated by that customer? Could your companyscope, enabling them to track every move of their con- survive in a marketplace in which gaining the attentionsumer prey. Its no wonder consumers feel more hound- of targeted consumers has given way to paying attentioned than ever constantly interrupted by the cacoph- to consumers targeting you?ony of barking from marketers vying for their attention, Its hard to answer these questions. If the Intentionand disquieted by the not-so-far-fetched suspicion that Economy does come to fruition, it will likely render ob-silent trackers are always sniffing at their heels. solete many of todays marketing practices, which were Searls argues that the time is coming when custom- designed to capture the attention of consumers. (Searls 16ers will be emancipated from the systems built to con- r