Favorite Business Book

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.

Here are  steps you can take to protect your data.

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”