I
received an email last week from a former student of mine from Bogota,
Columbia. We have been corresponding lately about possible career changes. He
asked me a question I get asked often: “What is my favorite business book?”
That
is a no brainer for me, “Business Adventures,” by John Brooks.
Today,
four decades after it was first
published—"Business Adventures" remains the best business book I've
ever read. John Brooks is still my favorite business writer.
A
skeptic might wonder how this out-of-print collection of New Yorker articles
from the 1960s could have anything to say about business today. After all, in
1966, when Brooks profiled Xerox , the company's top-of-the-line copier weighed
650 pounds, cost $27,500, required a full-time operator and came with a fire
extinguisher because of its tendency to overheat. A lot has changed since then.
It's
certainly true that many of the particulars of business have changed. But the
fundamentals have not. Brooks's deeper insights about business are just as
relevant today as they were back then. In terms of its longevity,
"Business Adventures" stands alongside Benjamin Graham's "The
Intelligent Investor," the 1949 book that I believe is the best book on
investing I have ever read.
Brooks
grew up in New Jersey during the Depression, attended Princeton University
(where he roomed with future Secretary of State George Shultz ) and, after
serving in World War II, turned to journalism with dreams of becoming a
novelist. In addition to his magazine work, he published a handful of books,
only some of which are still in print. He died in 1993.
As
the journalist Michael Lewis wrote in his foreword to Brooks's book "The
Go-Go Years," even when Brooks got things wrong, "at least he got
them wrong in an interesting way." Unlike a lot of today's business
writers, Brooks didn't boil his work down into pat how-to lessons or simplistic
explanations for success. (How many times have you read that some company is
taking off because they give their employees free lunch?) You won't find any
listicles in his work. Brooks wrote long articles that frame an issue, explore
it in depth, introduce a few compelling characters and show how things went for
them.
In
one called "The Impacted Philosophers," he uses a case of
price-fixing at General Electric to explore miscommunication—sometimes
intentional miscommunication—up and down the corporate ladder. It was, he
writes, "a breakdown in intramural communication so drastic as to make the
building of the Tower of Babel seem a triumph of organizational rapport."
In
"The Fate of the Edsel," he refutes the popular explanations for why
Ford's flagship car was such a historic flop. It wasn't because the car was
overly poll-tested; it was because Ford's executives only pretended to be
acting on what the polls said. "Although the Edsel was supposed to be
advertised, and otherwise promoted, strictly on the basis of preferences
expressed in polls, some old-fashioned snake-oil selling methods, intuitive
rather than scientific, crept in." It certainly didn't help that the first
Edsels "were delivered with oil leaks, sticking hoods, trunks that
wouldn't open and push buttons that…couldn't be budged with a hammer."
One
of Brooks's most instructive stories is "Xerox Xerox Xerox Xerox."
(The headline alone belongs in the Journalism Hall of Fame.) The example of
Xerox is one that everyone in the tech industry should study. Starting in the
early '70s, Xerox funded a huge amount of R&D that wasn't directly related
to copiers, including research that led to Ethernet networks and the first
graphical user interface (the look you know today as Windows or OS X).
But
because Xerox executives didn't think these ideas fit their core business, they
chose not to turn them into marketable products. Others stepped in and went to
market with products based on the research that Xerox had done. Both Apple and
Microsoft , for example, drew on Xerox's work on graphical user interfaces.
I
know I'm not alone in seeing this decision as a mistake on Xerox's part. Many
other journalists have written about Xerox, but Brooks's article tells an
important part of the company's early story. He shows how it was built on
original, outside-the-box thinking, which makes it all the more surprising that
as Xerox matured, it would miss out on unconventional ideas developed by its
own researchers.
Brooks
was also a masterful storyteller. He could craft a page-turner like "The
Last Great Corner," about the man who founded the Piggly Wiggly grocery
chain and his attempt to foil investors intent on shorting his company's stock.
I couldn't wait to see how things turned out for him. (Here's a spoiler: not
well.) Other times you can almost hear Brooks chuckling as he tells some absurd
story. There's a passage in "The Fate of the Edsel" in which a PR man
for Ford organizes a fashion show for the wives of newspaper reporters. The
host of the fashion show turns out to be a female impersonator, which might
seem edgy today but would have been scandalous for a major U.S. corporation in
1957. Brooks notes that the reporters' wives "were able to give their
husbands an extra paragraph or two for their stories."
Brooks's
work is a great reminder that the rules for running a strong business and
creating value haven't changed. For one thing, there's an essential human
factor in every business endeavor. It doesn't matter if you have a perfect
product, production plan and marketing pitch; you'll still need the right
people to lead and implement those plans.
"Business
Adventures" is as much about the strengths and weaknesses of leaders in
challenging circumstances as it is about the particulars of one business or
another. In that sense, it is still relevant not despite its age but because of
it. John Brooks's work is really about human nature, which is why it has stood
the test of time.
FALL MOVIE
PREVIEW - FBI
battles with the White House. Revelatory government leaks on the front page.
Soldiers haunted by unwinnable wars. Courtroom clashes over civil rights.
Movies take years to make, but many of this fall's films may feel almost
preternaturally programmed for the President Trump era.
Writer-director
Peter Landesman ('Concussion') found himself making a film about the FBI
battling White House interference while a curiously similar conflict played out
between Trump, James Comey and the FBI.
His
movie, 'Mark Felt: The Man Who Brought Down the White House' tells the story of
Felt (played by Liam Neeson), the legendary Watergate source known as Deep
Throat, who was the No. 2 official at the FBI during the scandal. It's been in
the works since 2005.
The
film, [out] Sept. 29, gives a close-up to the man previously seen ... as the
shadowy figure in the parking garage of 'All the President's Men.'
Similar
parallels may also follow Steven Spielberg's keenly awaited 'The Post,' (Dec.
22). Spielberg's drama is about The Washington Post's 1971 publishing of the
classified Pentagon Papers, which revealed many of the government's lies about
the Vietnam War.
The
film, starring Meryl Streep and Tom Hanks, is like an all-star team assembled
as Hollywood's response to Trump.
Clint
Eastwood, who has previously voiced support for Trump, is prepping 'The 15:17
to Paris' about the 2015 Thalys train attack in France, with the real-life
heroes playing themselves.
‘Thank
You for Your Service' (Oct. 27) ... is about three soldiers returning from
Iraq, adjusting to civilian life and fighting post-traumatic stress disorder.
‘Marshall'
(Oct. 13), stars Chadwick Boseman as a young Thurgood Marshall defending a
black chauffeur in 1941 against his wealthy socialite employer in a sexual assault
and attempted murder trial.
Rob
Reiner's 'LBJ' (Nov. 3) stars Woody Harrelson as the 36th president, taking
office after the assassination of John F. Kennedy and passing the Civil Rights
Act.
Put
all these on your to see list in the coming months.
COLLEGE
CHRONICLES
– COLLEGE HOCKEY INTRIGUE -
All-America goaltender Kyle Hayton made it official last week, that he's
leaving St. Lawrence and will play for Wisconsin this season as a graduate.
It
had been one of the worst-kept secrets this summer that Hayton's intention was
to transfer. However, he had to first pass enough courses during the summer at
St. Lawrence to graduate. That wasn't known for sure until this past week. I
bet one of those courses was Geography.
According
to Wisconsin, Hayton passed about a year's worth of courses over the summer,
and got 'As' in all of them (hmmm right, a goalie?).
As
a graduate transfer, Hayton does not have to wait the usual one-year transfer
period. He has one more season of NCAA eligibility remaining and can do that
immediately with the Badgers.
"Basically
I just wanted a new challenge," Hayton said.
Two
weeks ago, Matt Jurusik had announced he was leaving Wisconsin to return to the
USHL, signaling Hayton's impending arrival.
"I
am lucky enough to have the chance to continue my collegiate career with one of
the best coaching staffs in the country and an extremely talented group of
players," Hayton said. "I am so excited to get rolling towards a
Championship as a Badger."
Hayton,
23, is a native of Denver. His best season statistically came as a freshman,
when he posted five shutouts and a .937 save percentage. His save percentage
was .935 as a sophomore and .929 last season as a junior.
Hayton
is an undrafted free agent in the NHL's eyes.
"I
think he's a confident kid, a kid that looks at our program and the goalies
we've produced and he wants to be one of those guys," Wisconsin coach Tony
Granato said.
Wisconsin's
other goaltender is sophomore Jack Berry. Last season as a freshman, Berry
started the most games of anyone on the team, but finished with a save
percentage of just .898 as the Badgers fell just short of making the NCAAs.
As
Wisconsin's publicity office pointed out in a news release, star NFL quarterback
Russell Wilson made a similar move after three years at North Carolina State,
playing his final season of college football for the Badgers.
"Big
shoes to fill," Hayton said. Not too many quotes coming out of the St.
Lawrence camp.
Wisconsin
plays St. Lawrence in two games in Madison early in the upcoming season, Oct.
27 and 28.
BIRTHDAYS
THIS WEEK
– Birthday wishes and thoughts this week Maria Bartiromo (50) Brooklyn, N.Y.; Virginia Madsen (56) Chicago, Ill.; Tommy Lee Jones (71) San Saba, TX.
POTUS WEEK - Hurricane
Irma: President Trump's week will be dominated by the storm response. Trump
said he plans to visit Florida "very soon," according to CNN, but the
travel schedule hasn't been finalized, according to a senior administration
official.
House agenda: Because so many members will be
out of town due to Hurricane Irma, no votes are expected in the House on
Monday. Later in the week, House Republicans will pass their eight remaining
appropriations bills (sending the full package of 12 spending bills over to the
Senate.)
Senate agenda: The defense authorization bill
— John McCain's baby — is expected to come up this week. It's unclear how long
this traditionally bipartisan bill will take to get through the amendment
process.
9/11 remembrance: Monday is September 11.
President Trump and the First Lady will lead a staff-wide moment of silence at
the White House. They'll then visit the Pentagon.
Foreign visitor: Malaysian Prime Minister
Najib Razak visits the White House on Tuesday.
Hill outreach: Trump hosts a bipartisan
dinner with senators on Wednesday night.
Earlier that day, South Carolina Sen. Tim
Scott, the only African-American Republican in the Senate, will have a
one-on-one meeting with Trump at the White House. The topic: race in America.
Scott has been harshly critical of Trump on racial issues — especially
post-Charlottesville — and plans to expose the president to his own moving life
story in forceful terms.
CREDIT
HACK
- Credit-reporting company Equifax said Thursday that hackers gained access to
some of its systems, potentially compromising the personal information of
roughly 143 million U.S. consumers. The hack is second in size only to the pair
of attacks on Yahoo disclosed last year, which potentially affected as many as
1.5 billion customers. The Equifax breach could prove especially damaging given
credit-reporting companies’ gateway role in determining which consumers gain
access to financing and how much they get. The attack differs, too, in that the
attackers in one swoop gained access to several pieces of consumers’
information—names, Social Security numbers, birth dates and addresses—that
could make it easier to commit fraud.
THE
NEW iPHONE - Called 'iPhone X: Strings of software code inside of the
leaked operating system ... show the expected three new phones will be called
the iPhone 8, iPhone 8 Plus, and iPhone X.
The iPhone 8 and iPhone 8 Plus
are successors to the current iPhone models, while the iPhone X is the premium
version with an all-new design, crisper OLED screen, improved cameras, and a
3-D facial recognition scanner for unlocking the device.
The 'X' in the iPhone's name
may be a reference to this model being a special 10th anniversary
edition."
This [iPhone] iteration could
prove a test of [Apple's] consumer tech dominance as it faces a bevy of
challenges: Samsung seems to have resumed its smartphone momentum with the new
Galaxy Note 8, Apple trails competitors such as Google in the home hub space,
Siri's artificial intelligence isn't as advanced as others, and it is losing to
Amazon.com as an entertainment innovator.
Is this the moment [Apple and
CEO Tim Cook] reclaim the mantle as tech's top innovator?
Apple fans, who crave the days
when the company changed the world with revolutionary products, are eager to
see more ... industry-disrupting ideas.
MARKET WEEK - Investors
will focus this week on the biggest U.S. company by market capitalization.
Apple
Inc. is expected to roll out three new iterations of its popular iPhone on
Tuesday, including a larger and more expensive 10th anniversary showcase
edition and updates to its two iPhone 7 models that started selling last year.
Excitement
for the unveiling has grown all year among investors. The stock is up 37% in
2017, nearly four times the gain of the broader S&P 500 index.
The
hype is a perennial feature of Apple releases: The stock has gained 21% on
average in the six months leading up to past iPhone launches.
But
history suggests that the momentum is likely to fade after Tuesday. In the week
after a new launch, Apple shares have averaged a 1.6% fall, according to The
Wall Street Journal's Market Data Group.
September
is a historically tough month for Apple's stock. It has averaged a 4.2% drop
during the 36 Septembers since it went public, according to Schaeffer’s
Investment Research. The company has also rolled out new iPhones in September
in recent years.
Such
performance matters for investors in more than just Apple. The company, valued
at $819 billion, makes up 3.9% of the market value of the S&P 500, the
highest of any of the index’s companies. That means Apple has an outsized
impact on the S&P 500’s performance.
A
disappointing product launch could drag on major U.S. stock indexes during an
already-volatile month. The S&P 500 is down slightly in September as
investors have fretted about a range of issues from conflict with North Korea
to recent soft inflation readings and the impact from the hurricanes that have
hit the U.S.
That
said, Apple has tended to rebound pretty quickly from a post-iPhone launch
slump. A month after the release, shares gain 1.3% on average, and six months
later they're up almost 14%.
The
stock has averaged a 31% increase during the period between new iPhone
releases, but not every cycle has been a winner. Shares fell 21% during the 3G
cycle, though they rose 94% during the 3GS cycle that followed, the best run on
record for an iPhone release. More recently, shares have gained 43% in the
current stretch of the 7 and the 7 Plus cycle.
GRAY BEARDS - The NFL
season begins with 7 starting quarterbacks who are 35 or older.
The
dean, New England Patriots' Tom Brady (40), is joined by the New Orleans
Saints' Drew Brees (38), the New York Jets' Josh McCown (38), the Arizona
Cardinals' Carson Palmer (37), the New York Giants' Eli Manning (36), the
Steelers' Ben Roethlisberger (35) and the L.A. Chargers' Philip Rivers (35).
The
Green Bay Packers' Aaron Rodgers — who, inspired by Brady's diet and
stretching, thinks it's "realistic" to play past 40 — is 33.
The
reason for the crop of graybeard QBs: Quarterbacks are delaying retirement
while making more money, eating better, working out year-round and benefiting
from rule changes that have resulted in fewer hits and less wear and tear on
their bodies. Bolstering veterans' value is the paucity of QBs running the
pro-style system in college.
The
spate of rule changes over the last two decades that fed the offensive
explosion is bearing fruit now that quarterbacks are elongating their peak
performance years and prolonging their careers.
P.S. Sports
Illustrated's pick for Super Bowl LII, on Feb. 4 at U.S. Bank Stadium in
Minneapolis: Patriots 31, Packers 27 (Steelers and Vikings also in the final
four).
SWAMI’S WEEK
TOP PICKS
–
NFL Football
Pick of the Week – Sunday 9/17, 1:00 PM ET, CBS: Buffalo Bills (1-0) visit Carolina
Panthers (1-0). Can Buffalo stay in first place in the AFC East (NOT), Carolina
wins in Charlotte 24 – 14. (Season to date 1-0).
College
Football Pick of the Week – Saturday 9/16, 8:00 PM ET, ABC: #3
Clemson Tigers (2-0) visit #14 Louisville Cardinals (2-0). Not an easy early
season schedule, last week Auburn, now Louisville. Clemson wins in Louisville 38 – 30. (Season to date 1-1)
D-III
Football Pick of the Week – Saturday 9/16, 4:30 PM PT: #1 Mary
Hardin-Baylor Crusaders(1-0) visit #7 Linfield Wildcats (1-0). A good cross
country test for the defending National Champ Crusaders. The purple will be out
in full force at Maxwell Field in Oregon, but not enough, Crusaders win 27 – 21. (Season to date 1-1)
SCIAC Game
of the Week (Men’s Soccer) – Saturday 9/16, 7:00 PM PT: University of La
Verne Leopards (3-1) at University of Redlands Bulldogs (2-3). First place is
on the line in the SCIAC Conference, Leos win a big one on the road 3 – 2. (Season to date 2-0)
MLB Game of
the Week (9/16) – Los Angeles Dodgers (92-51) at Washington Nationals (88-55), by
this time on Saturday if the Dodgers have not stopped their losing streak the
Dodger band wagon will be officially empty. Nats win 6 – 2.
Season to Date
(53 - 22)
ON THIS DATE
- “Star Trek”
premiered on NBC today 1966—was a favorite of Martin Luther King for its
diversity.
Next Blog: Words of the
month and the search committee.
Until
next time, Adios
Claremont,
California
September
11, 2017
#VIII-14-356
CARTOON OF
THE WEEK – “Never
Forget”
