Building a World-Class Company

Books Worth Reading

October / November 07 By: Rolf Dobelli Volume 5 Number 5

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Read any good books lately? Rolf Dobelli has, and with this new feature, he shares his findings with Innovation readers. Dobelli is chairman of getAbstract, the world's largest provider of business book summaries.

Bill and Dave

Michael S. Malone's latest book, Bill and Dave, details the history of tech titan Hewlett-Packard and teaches a lesson about the way that corporate culture can preserve a company through hard times. Although the HP founders' main objective was profit, their secondary goals won the company a place in the hearts of its customers and employees. The company continues to emphasize customer service, growth, employee welfare, organizational health and trust.

Bill Hewlett and Dave Packard studied at Stanford University, where radio and electronics professor Fred Terman spotted their talent. He shepherded their development (and, after their success, served on HP's board). By the end of 1938, the pair had landed enough contract work to pay their bills and hone their skills. After the war, HP had to lay people off, which the author says was so traumatic that they resolved to never do it again. During the 1950s, Hewlett-Packard came up with innovative, highly profitable products, such as a high-speed frequency counter. By that time the company had some 100 products, more than 750 employees and $15 million in revenue. Ten years later, its leaders codified the HP Corporate Objectives. Their emphasis on customer service and trust building cemented a relationship with their clients, who remained patient even during the rough introduction of the HP-3000 minicomputer.

Malone doesn't deal much with the nitty-gritty of Bill and Dave's personal lives, but he does set out the broad picture of where they succeeded (often) and tripped up (rarely). He also covers the company's subsequent leadership, including how Bill and Dave emerged from retirement to shore it up in the wake of a weak CEO, and how it handled a few bumpy years with Carly Fiorina. At times the author brings up object lessons maybe once too often. Still, his many valid, interesting insights counteract that issue, resulting in a corporate and personal biography that will appeal to anyone interested in the history of technology.

Michael S. Malone. Bill & Dave: How Hewlett and Packard Built the World's Greatest Company. Portfolio, 2007. List Price: $26.95. ISBN-13: 978-1591841524.

The Change Function

You've just created a snazzy, new high-tech product with futuristic features and a low price. Great! Pip Coburn, author of The Change Function, is here to tell you why it will almost surely fail. Unfortunately, too many technology companies operate with a wrong-headed, indeed, simple-minded, "build it and they will come" bias, which in fact only ever works for cinematic baseball fields. These companies are reluctant to admit it, but deep down, most consumers hate new-fangled gadgets and purchase them only when they must. Coburn's "change function" says that to achieve product success, the targeted customers' desire for your gadget must outweigh their reluctance to adapt to something new.

The book highlights the two areas in which high-tech companies often falter.
First, they neglect the adage, "if it ain't broke, don't fix it." The technological world is littered with the failures of brilliantly conceived and expertly designed products that, quite simply, no one needed. Second, tech managers fail to focus on what their customers think and feel about their companies' products. Engineers and designers are not responsible for new product success. End users are. The author suggests asking how you can minimize your new product's "pain of adoption"; who your target consumer really is; how you can learn from your duds; and what service—€”not what product—€”you sell. As Ted Levitt of Harvard once wrote, "When people buy quarter-inch drill bits, it's not because they want the bits themselves—€¦they want quarter-inch holes."

Coburn writes with a lively pen as he advises focusing not on your technological marvels, but on the people who will use them. As the founder of a firm that advises investors on high-tech stocks, he makes a compelling argument.
Technology executives, portfolio managers, and anyone else concerned with the success of high-tech companies and their products will want to read this thoughtful book before placing their own bets.

Pip Coburn. The Change Function: Why Some Technologies Take Off and Others Crash and Burn. Portfolio, 2006. List Price: $24.95. ISBN 13: 978-1591841326

Jeffrey Gitomer's Little Red Book of Sales Answers

Sales expert Jeffrey Gitomer isn't reinventing the sales wheel, he's just showing you how it turns. Whether you've been in the business of selling for five weeks or five years, you know what questions you want answered: "How do I make a cold call?" or, perhaps, "When do I ask for the sale?" In Jeffrey Gitomer's Little Red Book of Sales Answers, the author tackles these issues succinctly and thoroughly, with a mix of common sense and hard-won experience. He doesn't provide shortcuts or a magic sales formula. Rather, he advocates hard work and preparation.

Success in the sales world depends on how well you can answer the most common sales questions. Gitomer's topics stretch from getting ahead of the competition to handling rejection. Here are some of his key insights: To make a sale, find common ground and strive to understand the prospect's needs and concerns. Select questions that make you look smarter, more tuned-in and better informed than everyone else. Be relaxed and ask for a commitment only after you have made a proposal that is risk-free for the client.

Combat your fear of failure or rejection by dwelling on your accomplishments. The author, a noted sales guru, recommends taking a prospect's "no" to mean "not yet." When making a cold call, be prepared and engage the prospective client by asking an enticing question: The object is to get an appointment. Ask satisfied clients for referrals; a good recommendation is enormously effective.

Gitomer's no-nonsense, conversational text is easy to understand and generally right on target. It does contain the occasional misfire, including liberal self-promotion (after all, he is a salesman). And you might not feel exactly at home with his example of a good message to leave on an answering machine to elicit a response from a prospect: "Hi, my name is—€¦and I'd like to talk with you about a business issue of a personal nature." Personal natures aside, this manual is a must-read for salespeople. Keep it on your desk for a regular boost of sales savvy.

Jeffrey Gitomer. Jeffrey Gitomer's Little Red Book of Sales Answers: 99.5 Real World Answers that Make Sense, Make Sales, and Make Money. Financial Times Prentice Hall, 2005. List Price: $19.99. ISBN-13: 978-0131735361.