Malcolm Gladwell Posts

On business and management books by Vaynerchuk, Taleb, Rosling, et al

Reading business and management books can be an interesting experience. Usually an entire book of approximately 300 pages has a single idea to discuss and will do so with innumerable examples and if required, experiments too. In an age when self-help and business books are inevitable bestsellers, then books by management gurus are definitely going to sell. It is a worldwide phenomenon. Surprisingly many of the books that are published inevitably trot out loads of common sense. It is as if reminding entrepreneurs and management professionals, don’t forget the basics of human engagement. Mantras like communication is essential, team work, data collection and analysis, pay heed to specialists but never forget to do your own homework, be responsible for your actions, push your limits, encourage your teams and always be a team player, exercise any leadership qualities you may have, learn from your mistakes, seek advice from professionals/specialists if need be, always look for empirical evidence, take risks but always be responsible for the consequences, do not be disheartened when mistakes occur — learn from them, create enduring legacies but always remember to evolve. Always seek facts, take deep dives and research your sector thoroughly before making critical decisions. Do not be in haste but do not overthink your decisions either as that too can be counterproductive. Micro-speed in today’s world is crucial but the macro-picture is equally essential. Finally, the bottom line is always important. Yet there is no harm to dabble in some experimentation and prepare for the future.

All the books discussed in some way or the other dwell on these important aspects of business management. This kind of advice can never get old and will always remain relevant. All that might change are the modes of communication and product diversification to match the changing expectations of clients/customers. Business climates may alter a bit and so will the economic policies across nations but the fact remains is that those who want to remain in the business will always be mentally agile, quick-witted, sure-footed, team players and always swift. Many anecdotes touching upon these aspects are shared in CEO Next Door is based on an in-depth analysis of over 2,600 leaders drawn from a database of more than 17,000 CEOs and C-suite executives, as well 13,000 hours of interviews, and the two decades of experience advising CEOs and executive boards that Elena Botelno and Kim Powell have between them. Based upon this data they identified four essential behaviours that define CEOs — be decisive, reliable, adapt and engage with stakeholders and not shy away from conflict.

Even though most of these books were fascinating to read with plenty to learn from, I could not help but think that at least two of the titles mentioned — Skin in the Game and Factfulness — were a little baffling. Great ideas. Fantastic premises for discussing their ideas. Taleb’s fascinating and equally logical principle that everyone should be fully responsible for the consequences of their action i.e. have their “skin in the game”. Factfulness again is goading its readers to not be wrong and miserable about the world as it is today. The Roslings list at least ten factors that come into play when an individual analyses the world and most of these are born out of ignorance and lack of knowing one’s true facts. Whereas it is always essential to remember that facts exist and should be paid heed to. In fact they will brighten one’s outlook of the world. Even though both the books are based on fine principles the fact is they do not necessarily seem to take into account that many readers who will turn to these books will do so with some hope to gain nuggets of wisdom from their business gurus. Many of these people may or may not have steady jobs as it is the gig economy which is dominant. In that case many won’t have the mental peace and security to think twice about their actions or even stop to analyse too many of the facts swirling around them. More and more people are keen to get the job at hand done so as to earn some income.

This is an aspect that Gary Vaynerchuk is very clear about. He often reiterates it in his podcasts, videos and books. Ensure you have some form of steady income coming in to experiment with your ideas. He never discourages anyone but asks them to face the hard truth before taking the plunge in a start up or changing business tactics. Financial security always brings with it some sort of internal peace and a sense of well-being to an individual before they can consider taking another step in professional growth whether personally or for their business interests. Interestingly Alex Hutchinson’s discovery from his passion for athletics is that the body is able to endure a fantastic amount of physiological stress and can invest in itself to push known limits but in order to do so there has to be mental peace. For him the truth is that “the brain and the body are fundamentally intertwined.”

It is for these many reasons listed that reading stories about business families such as profiled by senior business management professional Sonu Bhasin in her book The Inheritors. She interviewed the younger generations of family run businesses that have flourished in India for generations. The case studies provide a fascinating insight into the interplay of the traditional and acute awareness of being global players as well as of changing economic scenarios and the urgent need to adapt. So accordingly changing tactics, grooming the younger generations, and preparing them to lead the businesses.

All said and done this pile of books is an interesting mix and plenty can be gleaned from it about how to steer one’s own business, however big or small. Although one can read and learn from other’s stories, ultimately a business grows exponentially based upon the choices made by the decision makers and for this many, many factors are taken on board — some apparent, some not so apparent.

Books discussed:

Gary Vaynerchuk Crushing It! How  Great Entrepreneurs Build Their Business and Influence — and How You Can, Too Harper Business, an imprint of HarperCollins Publishers, New York, 2018. Pb. pp. 275

Elena Botelho and Kim Powell ( with Tahl Raz) The CEO Next Door: The 4 Behaviours that Transform Ordinary People into World Class Leaders Virgin Books, an imprint of Ebury Publishing, Penguin Random House, London, 2017. Pb. pp. 276

Alex Hutchinson (Foreword by Malcolm Gladwell) Endure: Mind, Body and the Curiously Elastic Limits of Human Performance Harper Collins Publishers, London, 2018. Pb. pp. 306

Hans Rosling ( with Ola Rosling and Anna Rosling Ronnlund)  Factfulness: Ten Reasons We’re Wrong About the World – and Why Things Are Better Than You Think Sceptre, an imprint of Hodder & Stoughton, an Hachette UK company, 2018. Hb. pp. 346

Nassim Nicholas Taleb Skin in the Game: Hidden Asymmetries in Daily Life  Allen Lane, Penguin Random House UK, London, 2018. Pb. pp. 280

Sonu Bhasin (Foreword by Anand Mahindra) The Inheritors: Stories of Entrepreneurship and Success Portfolio, Penguin Random House, 2017. Pb. pp. 304 Rs 299

27 June 2018 

 

“Price Fighters” ( The Hindu, 31 Aug 2014)

“Price Fighters” ( The Hindu, 31 Aug 2014)

( The Hindu asked me to write a short piece about the ongoing price war between Amazon and Hachette. It was published on 31 August 2014. Here is the link: http://www.thehindu.com/todays-paper/tp-features/tp-sundaymagazine/price-fighters/article6365601.ece . I am c&p a longer version of the article published. ) 

Cartoon accompanying the Hindu article On August 10, 2014, Authors United wrote an open letter decrying Amazon CEO Jeff Bezos’ pressure tactics on Hachette to lower ebook prices. The letter — written by thriller writer, Douglas Preston and placed as a two-page ad, costing $ 104,000, and signed by well-known names such as James Patterson, Stephen King, David Baldacci, Kamila Shamsie, Philip Pullman, Donna Tartt, Ann Patchett, Malcolm Gladwell, Paul Auster and Barbara Kingsolver —states, “As writers — most of us not published by Hachette — we feel strongly that no bookseller should block the sale of books or otherwise prevent or discourage customers from ordering or receiving the books they want. It is not right for Amazon to single out a group of authors, who are not involved in the dispute, for selective retaliation.” The writers printed Bezos’ e-mail id and asked authors to write to him directly.

This letter came after months of a public spat between publisher Hachette and online retailer Amazon. No one is privy to the details but it is widely speculated that the fight is about the pricing of books, especially e-books. Authors began to feel the effect of these business negotiations once Amazon stopped processing sales of their books or became extremely slow in fulfilling orders. It even removed an option to pre-order  The Silkworm , by J.K. Rowling writing as Robert Galbraith, prompting the author to respond on Twitter where she encouraged her three million followers to order  The Silkworm from high street stores and independent booksellers. Ironical given that Amazon’s motto is customer satisfaction.

 Amazon defended its actions through a letter released on its website, Readers United (http://www.readersunited.com/), and circulated it to self-published authors using their Kindle Direct Publishing (KDP) platform. In it, the company said that for a “healthy reading culture, we have to work hard to be sure books actually are competitive against these other media types, and a big part of that is working hard to make books less expensive.” Amazon is asking for all e-books to be priced at $9.99 or less. Misquoting George Orwell’s ironic comment on the popularity of new format of paperbacks in the 1930s, Amazon wrote that even Orwell had suggested collusion among publishers. It released the e-mail id of Hachette CEO, Michael Pietsch, asking readers to write to him directly to make books affordable since it is good for book culture.

 Pietsch replied to all those who wrote to him stating clearly, “Hachette sets prices for our books entirely on our own, not in collusion with anyone… More than 80 per cent of the e-books we publish are priced at $9.99 or lower. Those few priced higher — most at $11.99 and $12.99 — are less than half the price of their print versions. Those higher priced e-books will have lower prices soon, when the paperback version is published. … Unlike retailers, publishers invest heavily in individual books, often for years, before we see any revenue. We invest in advances against royalties, editing, design, production, marketing, warehousing, shipping, piracy protection, and more. We recoup these costs from sales of all the versions of the book that we publish — hardcover, paperback, large print, audio, and e-book. While e-books do not have the $2-$3 costs of manufacturing, warehousing, and shipping that print books have, their selling price carries a share of all our investments in the book.”

Amazon’s shareholders are getting tetchy with the massive losses the company has posted once again. For the current quarter, Amazon forecast that the losses would only grow. It expects a healthy rise in revenue but an operating loss of as much as $810 million, compared with a loss of $25 million in the third quarter of 2013. Losses increased as the firm spent heavily in a bid to expand its business with its first smartphone, the Fire Phone. Bob Kohn has pointed out the monopsony power of Amazon, which has a current market share of 65% of all online book units, digital and print, is not just theoretical; it’s real and formidable. When a company has dominant market power and sells goods for below marginal cost, it is engaging in predatory pricing, a violation of federal antitrust laws.”  There have been articles in USA for the government to enforce the Robinson-Patman Act of 1936, the law prohibits a retailer from wielding its mere size to bully suppliers for discounts. But as Colbert’s experiment of promoting debut author Edan Lepucki’s novel California showed that if readers want, they can procure a book from anywhere. His discussion about it, stemming from his anger for Amazon’s monopolistic practices, propelled California to becoming an NYT bestseller.

In India, commercially-successful author Ashwin Sanghi, drawing parallels between the music industry of 2002 and publishing of today, says, “Books are at an inflection point in 2014; a bit like music was in 2002. Music producers were accustomed to selling CDs whereas Apple wanted to sell singles at 99 cents. The face-off between Amazon and publishers/authors is similar. Publishers wish to charge prices that the industry is accustomed to while Amazon wishes to charge prices that customers will like, thus inducing more customers to buy on Amazon. I think the time has come for Jeff Bezos to sit across the table with publishers. There is no alternative.”

Another author, Rahul Saini writes “I have never supported the idea of monopoly and that is what Amazon is clearly trying to do here. Looking at the argument Amazon is making, it does make sense — buyers are always driven by low prices and heavy discounts (the Indian book market is a perfect example) but I firmly believe that the retailer does not own any right to dictate the pricing of a book. It has to be a mutual consent between the author and the publisher.”

 Popular author Ravinder Singh has his own take. “A publisher has the right to decide the cost of its books (in any format).  If the retailer really wants to bring down the price of the book, he can discount on his margins and should be free to do so. To decide the price tag of a book is a publisher’s (and not retailer’s) prerogative. Having said that, knowingly delaying shipment of titles of a particular publisher (and their authors’) just because it is not accepting the demand, leaves a bad taste in everyone’s mouth — readers, authors and publishers. Amazon may be right about the price-demand elasticity of the e-book and in saying that it can certainly bring more readership and thereby more money (offsetting the drop in price). But Hachette has all the right to decline it, even if it means letting go off money. As far as authors are concerned, they would not like to see one particular entity in the entire chain (that has accumulated huge powers), be it a publisher or a retailer, to decide their fate. They want to reach out to as many readers as possible, on time and make the royalties that they deserve.”

 Writing in the Guardian, Kamila Shamsie says, “All writers should be deeply concerned by the strong-arm tactics Amazon is using in its contractual dispute with Hachette — similar to tactics used in 2008 with Bloomsbury titles.  Writers want their books to reach readers; and we want to be able to earn a living from our work. It’s a great irony that the world’s largest bookseller is prepared to trample over both those wants in order to gain a business advantage even while claiming to stand up for readers and writers.

Others disagree. Major names in self-publishing including Barry Eisler and Hugh Howey petitioned Hachette asking the publisher to “work on a resolution that keeps e-book prices reasonable and pays authors a fair wage”. This has gathered over 7,600 signatures.

 Publishing is not like selling biscuits or furniture. It isn’t a question of taste and preference but an exercise in social philosophy. Amazon is primarily a tech-company whose dominance in the book industry is unprecedented. There may be some similarities with what happened in the music industry 10 years ago but publishing thrives on editorial tastes, which requires human intervention, not a series of algorithms promoting and recommending books. The book industry relies upon editors who know the business of “discovering” authors and converting them into household names. This public outrage against the ongoing battle between Amazon and Hachette proves that books are important to the cultural dimension of society.

1 September 2014 

On business books

On business books

Malcolm GladwellBusiness books are useful, at least those meant for the lay reader. These spell out complicated business methodologies and strategies simply, usually anecdotal. For instance, Malcolm Gladwell’s basic premise that it is the attitude that matters on how you tackle a problem. He uses the Biblical analogy of David & Goliath but the examples he cites to illustrate his point are of ordinary people in ordinary settings, who later went on to make a change. It could be in their personal lives or impacting others.

Subroto Bagchi, Inked, MBA at 16Subroto Bagchi’s premise in The Elephant Catchers is much the same. To net the big clients for business, a lot of it depends upon your strategy, confidence and attitude. Some of the ideas that he hopes to inculcate in the students he interacts with in MBA at 16. Vijay Govindarajan and Chris Timble are a little technical and create models to explain the different stages of a business evolving. Theories that are useful to know and understand.

 

Dave TrottBut it is Dave Trott, advertising guru, uses plenty of stories to explain different, but pertinent, aspects of promoting a service/product. Yet reading his book, Predatory Thinking, along with the others on how to be effective in business, one realises that the best way to learn and grow a business is to be confident, honest about your deliverables to the client, passionate about your work, build your brand image slowly and steadily, word-of-mouth publicity is still the strongest mode of promotion, and always be sharp, creative, think out-of-the box and never get dull. Learn, learn and learn. Beyond the Idea

 

 

Malcolm Gladwell David & Goliath: Underdogs, Misfits and the Art of Battling Giants Allen Lane, an imprint of Penguin Books, London, 2013. Hb. pp. 310.

Vijay Govindarajan and Chris Timble Beyond the Idea: Simple, powerful rules for successful innovation St Martin’s Press, Macmillan, London, 2013. Hb. pp. 178

Dave Trott Predatory Thinking: A Masterclass in out-thinking the competition Macmillan, London, 2013. Hb. pp. 270

Subroto Bagchi The Elephant Catchers: Key Lessons for Breakthrough Growth Hachette India, New Delhi, 2013. Hb. pp. 240.

Subroto Bagchi MBA at 16: A Teenagers Guide to the World of Business Inked, the Young Adult imprint of Penguin Books India, New Delhi, 2012. Pb.