Multipliers

The Book of the Week is “Multipliers: How the Best Leaders Make Everyone Smarter” by Liz Wiseman with Greg McKeown, published in 2010. This repetitive ebook discusses two kinds of leaders:  “Multipliers” and “Diminishers.”

Multipliers positively influence the people around them so as to draw out almost two times what they previously believed their capabilities to be, as reported by senior professionals interviewed by the authors. “People reported actually getting smarter around Multipliers.”

A study conducted in a non-workplace arena showed that people who were lauded for their efforts rather than for their intelligence “actually increased their ability to reason and solve problems.” The book’s authors relate this to Multipliers, saying that Multipliers create a self-fulfilling prophecy of greatness by recognizing their colleagues’ accomplishments, spurring better thinking from everyone.

The authors cited many examples of this, including one in which a company did not hire additional talent in order to meet its goal of increasing sales quickly, but instead, utilized Multipliers to better leverage the brain power of its existing sales force. Another company used Multipliers effectively in that “They didn’t box people into jobs and limit their contribution… [they]… let people work where they had ideas and energy and where they could best contribute.”

In addition, Multipliers have a great sense of humor– the trait of a great leader– it represents security with oneself, and a lack of self-consciousness. Multipliers search for talent all over, identify and draw out the positive behaviors that come naturally to the people they influence, maximize performance, and remove obstacles.

Read the book to learn the many other ways Multipliers bring out the best in their coworkers, and how Diminishers negatively impact their coworkers.

Beam, Straight Up

The Book of the Week is “Beam, Straight Up: The Bold Story of the First Family of Bourbon” by Fred Noe, with Jim Kokoris, published in 2012.  This autobiographical book recounts the history of the brand of Kentucky bourbon known as “Jim Beam” as told by a descendant of the company’s founder.

The drink recipe dates back to the 1790’s, and the family first started selling whiskey in 1795. Bourbon is a kind of whiskey. The name Bourbon was derived from the county name in Kentucky in about 1820.

Whiskey is “a spirit that’s made from a grain like corn, rye, wheat or barley.” A whiskey can be called bourbon only if it is comprised of a minimum of 51% corn, that has been aged a minimum of two years “inside charred, new oak barrels that can only be used once.”

Other varieties of whiskey include scotch (mostly barley), Canadian (mostly rye) and Irish (mostly malted barley). “Thanks to our innovation and our premiumization (upscale brands), bourbon was the fastest-growing large category in the United States in 2011.”

In the early days, the family shipped the bourbon in oak barrels on flatboats via streams and rivers, of which Kentucky likely has more than any other state. In the 1850’s, railroads and steamboats began to serve as additional shipping channels.

The spirit industry had its share of problems through the decades. In the 1920’s, there was Prohibition. Other drinks containing alcohol including vodka, scotch, wine and beer rose in popularity. Even so, competing whiskey-making companies would assist each other when they faced various equipment failures due to disasters.

Noe writes, “Sometimes I think the whole world is like one big bar, and I’m the world’s bartender.”

A First-Rate Madness

The Book of the Week is “A First-Rate Madness, Uncovering the Links Between Leadership and Mental Illness” by Nassir Ghaemi, published in 2011. This book describes the leadership abilities of John F. Kennedy, Martin Luther King, Abraham Lincoln, various Civil War generals, Adolf Hitler, George W. Bush, Tony Blair and Ted Turner, as determined by their mental health, or lack thereof.

The author argues that most people who have mental illness are not insane all the time; they merely have abnormal moods, such as depression or mania some of the time. He claims that mentally ill political and military leaders are heroic in times of crisis, and mediocre during peaceful, uneventful times; the opposite is true for mentally healthy leaders. This concept can be applied to the corporate world, too.

“In a strong economy, the ideal business leader is the corporate type… He may not be particularly creative… all is well only when all that matters is administration… When the economy is in crisis… the corporate executive takes a backseat to the entrepreneur…” It is rare to find someone who is an excellent leader under both extreme and normal conditions.

Ghaemi contends that “…depression led to more, not less realistic assessments of control over one’s environment, an effect that was only enhanced by a real-world emotional desire…” In other words, people prone to clinical depression have a more acute sense of reality than those who are not, a concept called “depressive realism.”

When the mentally healthy leader faces a crisis, he handles it poorly, because having suffered little in his youth, he “…hasn’t had a chance to develop resilience that might see him through later hardships” and has not developed the ability to empathize. George W. Bush was one such leader. To boot, he had “hubris syndrome.” Getting drunk on power, like many mentally healthy leaders, made him “…unwilling and even unable to accept criticism or correctly interpret events that diverge from their own beliefs. Hubris syndrome worsens with duration and absoluteness of one’s rule.”

Read the book to understand the psychology behind the successes and failures of the aforementioned leaders.

Dot Bomb

The Book of the Week is “Dot Bomb” by J. David Kuo, published in 2001. This ebook details the business dealings and the ensuing suspenseful power struggle at a dot-com company called Value America between 1996 and 2001.

The online retailer’s intended brand image was to boast maximum selection of merchandise shipped directly from sellers. This delivery-on-demand arrangement allowed the company to remain inventory-free, and thus minimize overhead costs. However, in reality, it needed to use resellers for many of the supposedly infinite products it sold.

Value America’s founder and leader, Craig Winn, was a charming megalomaniac who had grand plans to partner with various major corporations in order to attract investors and make the company worthy of an IPO. Unfortunately, Winn had planned to sell stock to the public just after the peak of the dot-com boom, when brokerages’ confidence in internet companies had started to wane.

After Value America went public, Goldman Sachs issued a report that Amazon.com was the internet retailer with the highest potential for success because it had high sales margins on its then-merchandise consisting only of books; a $30 billion valuation was not out of the realm of possiblity. Goldman went on to say Value America had the worst prospects, with sales margins of 1% and runaway costs. It would have to achieve revenues of billions of dollars in order to make any money.

Toward the end of the story, the author realized “Despite the hype, headlines, and hysteria, this was just a gold rush we were in… a lot of us were kin to those poor, freezing fools in Alaska who had staked everything on turning up a glittering chunk of gold.”

Read the book to learn the fate of the author, his family and the other Value America employees with dollar signs in their eyeballs.

Until the Sea Shall Free Them

The Book of the Week is “Until the Sea Shall Free them” by Robert Frump, published in 2001.

This wordy, repetitive, yet suspenseful book tells the detailed story of the February 1983 shipwreck of the Marine Electric, among many other briefly described maritime catastrophes. The scurvy old 605-foot bulk carrier transported coal in the North Atlantic Ocean from Boston, MA to Norfolk, VA.

The investigation of what happened conducted by the Marine Board– a panel of industry officials– was subject to the vagaries of the maritime legal system. Safety inspections of ships were performed by the U.S. Coast Guard and the American Bureau of Shipping. The National Transportation Safety Board was yet another regulatory body of maritime matters.

The Marine Board generated reports on shipping accidents. In rare cases, its recommendations might include Justice Department investigation and prosecution of a shipping company executive, or a review of the license of a ship’s captain; the latter, for criminal law violation, like for negligence in putting men’s lives at risk for failure to follow safety procedures.

A ship’s officers were usually blamed for disasters because ship owners and builders had a friendly relationship with the federal government. Political contributions helped elect candidates who turned a blind eye to regulating safety in marine commerce.

The ship’s top officers were under tremendous pressure to go on a voyage despite safety violations. Whistle-blowing behavior might get them fired. There was always the threat that a rival union would be awarded their current shipping contract. Some men waited more than a year before they could be assigned their next job on a ship.

For years, disasters were waiting to happen, due to the “rationalization, denial, greed and stubbornness” in connection with repairing and mantaining of decades-old ships. In the mid-1970’s, more than one fifth of all deaths from shipping accidents were due to structural failures of the vessels.

Heartbreakingly, during a winter storm at sea, some crew members die when they are so close to surviving. The lifeboats are buffeted about by rough waves and dashed on rocks or into a seawall, or men who lack protective clothing and proper safety equipment, fall into the freezing water while trying to board a rescue boat.

As in many other industries, shipping is one in which the big companies care more about money than seeking to reduce dangerous conditions. Despite poor safety records and the expenses of lawsuits and damage to their reputations, the large players stayed in business through the decades of the twentieth century. On the flip side, in accidents, numerous greedy seamen abused a lenient system that awarded them big bucks in personal injury cases.

Read the book to learn the fates of the parties associated with the Marine Electric after its fall from grace.

The Fall of the House of Forbes

The Book of the Week is “The Fall of the House of Forbes” by Stewart Pinkerton, published in 2011.  This volume describes the changes that occurred at Forbes (a magazine publisher named after its founding family) in the post-Malcolm Forbes era.

Malcolm, a major shareholder of the company, spent extravagantly on a collection of mansions, art, and vehicles that traversed land, sea and air; not to mention business parties. He had managed the company until his mysterious death in 1991. Thereafter, his successors imposed frugality. Nevertheless, Forbes was unprepared for the new realities of the internet.

When the magazine was finally forced to restructure its operations by instituting massive layoffs and integrating print and Web, it had already been plagued for years by arrogant and petty editors, office politics, high turnover and numerous inefficiencies. While the magazine previously had a sterling reputation for meticulous fact-checking, it has jettisoned quality for dumbed-down content and Web traffic at any cost.

It is thought that the way to achieve profitability on the Web is to foster interactivity with readers.  The Huffington Post does so, but has yet to make any money. Furthermore, research has shown that people have much poorer focus and information retention when they are reading news on a backlit screen, than when reading news in print form.

Read the book to learn the history of the Forbes family, and the people and bad choices behind the collapse of this media empire.

Confessions of an Event Planner

The Book of the Week is “Confessions of an Event Planner” by Judy Allen, published in 2009.

This volume contains various realistic scenarios of business, personal and charity events to show the reader the nature of the event planning industry. The acronym for how to prepare for any problems is ABC: Anticipation, Backup plan, Code of conduct.

There is always at least one troublemaker at every business event, who must be watched. The author describes their personality types, a few of whom include those who make unwanted sexual advances; those who feel entitled to a hotel room better than the one they were assigned; men who show off their masculinity, and women who are provocatively dressed.

The author points out that meticulous planning is required with business celebrations to head off possible untoward occurrences. There are companies that try to cheat on their taxes, and business executives who have their hand in the company cookie jar. Irate guests might do damage to hotel property. There may be a male executive officer whose mistress (and secretary) is booked in a separate room, but stays in his room at night. When children are attending an event, the planner has to consider appropriate food menus, food allergies, legal waivers and contingencies for liabilities. Part of the planner’s job is to prevent lawsuits by thinking through safety issues and complying with the law. Sometimes, event employees will recognize a situation in which guests’ behavior is about to spin out of control, and put the kibosh on it. They need to work as a team.

Sometimes event planners must deal with “too many chiefs, not enough Indians” with clients preparing a personal or nonprofit celebration. The goal of the nonprofits is to raise funds, but if the goal of the nonprofits’ events representative is to acquire social power, publicity for herself, or find her next husband, then the charity event may actually suffer a monetary loss. Even when all parties have the best of intentions, the nonprofit event may also be a failure because inexperienced volunteers are running it.

In short, the author provides advice on what to do before, during and after an event to ensure a safe, enjoyable occasion that a planner can be proud of.

McIlhenny’s Gold

The Book of the Week is “McIlhenny’s Gold, How a Louisiana Family Built the Tobasco Empire” by Jeffrey Rothfeder, published in 2007.  This book tells the history of a company that sells hot sauce.

A man named Edmund McIlhenny started the company in southern Louisiana in the 1870’s. He developed a method for making the sauce so that it was very consistent from batch to batch, and its production was not easily imitated. Due to his marketing savvy, the product was soon distributed in California, Nevada, Maine and Florida– “…anyplace with telegraph lines, paved roads and train depots.” His son died in 1949.

One of his son’s sons took over the business. In order to attract a reliable workforce, he created a company village– a compound where white employees both worked and lived (almost rent-free). Black employees commuted, and held difficult, low-level, pepper-picking jobs.

Through secret political machinations, the family was able to get the sole right to use the name “Tobasco” even though competing companies had also been using it during the whole prior time.

When the company, still privately held, was well over a century old, it began to lose its grip on market leadership due to various factors, including American dietary trends, refusal to maximally automate its operations, lack of strong leadership, and growing list of family shareholders.

Read the book to learn of the company’s strengths and weaknesses, and looming opportunities and threats going into the first few years of the 2000’s.

Birthright

The Book of the Week is “Birthright: Murder, Greed and Power in the U-Haul Family Dynasty” by Ronald J. Watkins, published in 1993. This is a cautionary tale about an American public corporation whose founder failed to take steps to secure control of his company. L.S. Shoen “lacked the heart to dilute the shares of his oldest children. If he had issued himself more shares, he could have guaranteed he would always have control or if he had modified the rules, only a supermajority of shareholders could have ousted him.”

The company’s stock situation aside, the story began after WWII, when Shoen started his truck rental business. The business proved successful until his children attained adulthood, at which time, he favored two of his sons, who drained the company’s resources on their expensive hobbies. This bad situation led to a legal dispute among family members over company ownership, that resulted in murder. The newspapers mockingly reported the court battles as a family fight among “the idle rich”, as the majority shareholders were publicly viewed as heirs to the family fortune.

One of the sons was suspected of perpetrating the said murder. This is an extreme story, because even when American family members are fighting over company ownership, they rarely stoop so low as to terrorize the rival camp by killing someone.

Personal History

The Book of the Week is “Personal History” by Katharine Graham, published in 1997.

The autobiographer was born in June 1917. She grew up in a large, wealthy family, in New York City, Washington, D.C. and Mount Kisco (upstate New York). She attended private schools. At high school dances, “Of course, no boys were allowed so all the girls put on evening dresses and corsages and danced with each other.”

The autobiographer’s father, Eugene Meyer, a business tycoon, purchased the Washington Post in 1932. In 1942, she wed Phil Graham, and took his name. Over the next ten years or so, they had four children (a daughter and three sons) who survived to adulthood. In 1946, her husband was named publisher of the Post. In 1963, she experienced serious personal problems that led to her taking over the paper.

Two of the Post‘s journalists, the infamous Woodward and Bernstein, were the first to seize upon the story of the break-in at the Watergate Hotel (the 1972 campaign headquarters of the Democratic party) by Republican party operatives. Over the next few years, the paper proceeded to reveal the corruption present in the Nixon administration with regard to the president’s reelection and the start of the Vietnam War. The story was extremely complex. The paper was at once courageous and foolish for casting aspersions on the Federal government. For, the Washington Post Company owned television and radio stations, in addition to print publications. These media holdings found themselves the victims of retaliatory action when it came time for the FCC to renew their broadcast licenses.

Lawsuits were launched in connection with the scandals over whether news articles published by the Post, were revealing State secrets that would compromise the national security of the United States. Many people thought the government was simply trying cover up its own embarrassing conduct. As is now evident, the post-Nixon decades saw history repeat itself many times over both in terms of similar scandals and overzealous classification of documents.

There occurred a mid-1970’s debilitating four and a half month strike of the many unions on which the Post had become too dependent through lax management. Before disgruntled workers walked out, some sabotaged the printing presses and thereafter waged a campaign of telephone threats and physical violence on picket-line crossers. Graham got right down in the trenches, moonlighting alongside non-union executives to get the paper out. She also achieved several female “firsts” and provided various examples of how being female subjected her to treatment males would not have experienced.

The Post had its ups and downs through the years.  In early 1991, Graham handed down leadership of the Washington Post Company to one of her sons.