Whether you are an investment banker, a CEO, a manager or an employee, this book will fundamentally change how you look at business.
The author makes a strong case for a new approach. He shows why, if a company is managed based on accounting data and financial information, it is virtually guaranteed that the performance of that business is considerably below its potential. You'll see how traditional concepts not only miss the critical drivers of performance, but they push companies in the wrong direction.
There is a central key to producing significantly increased returns on your effort and investment. You'll find this elusive key, hidden behind the walls of accounting, traditions and conventions.
You've read the stories in papers and magazines, from Fortune to Inc. You've heard about, or even know, dormant companies that suddenly turned into vigorous competitors. Now, for the first time, the man behind the scenes with the key to make those changes reveals his secrets in this riveting account.
You'll find the author's key applicable to your company, regardless of its size or the type of business you're in. Managers of GM, Delphi, GE, EDS, Deloitte and other companies studied and worked with the author and now you are invited to be part of the team. Together, you'll make your way through the complexity of a company, that might be like yours, to find the logic of the author's approach irrefutably effective and useful.
What you'll discover is practical and immediately applicable to your organization. It might be contrary to what you've been taught in business school, so be prepared to change your mind about ideas that you thought were cast in stone. Just follow the solid reasoning and come to the conclusions yourself. With the sharp edge of logic you will shred the conventions that limit your company's progress. You will be far more effective, and your company's performance will soar to its full potential.
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What People are Saying About This
This book is a landmark in its content and form. With irrefutable logic it
corrects many concepts of your MBA studies. And unlike technical books, it
is easy to read, a great story. I couldn�t put the book down and when I
finally did, my mind was racing so fast I couldn�t go to sleep.
David Richardson, CSP Richardson Resource Group
Laszlo Nemeth�s profound yet simple prescription to gauge business
strategies on customer market impact rather than factory or labor efficiency
is a tour de force of management strategy and literary piquancy. Managers
and investors alike will learn valuable lessons in business logic that defy
prevalent practice, while enjoying a well-wrought tale of corporate
challenge familiar to everyone involved in corporate life.
Lawrence Cunningham, author of How To Think Like Behjamin Graham And Invest Like Warren Buffett, and The Essays of Warren Buffett: Lessons for Corporate America
Read this book to expand your horizon about successful and dynamic
businesses in the 21st Century. Innovative. Substantive. Compelling.
Nido R. Qubein Chairman, Creative Services, Inc. Chairman, National Speakers Association Foundation
The customary, traditional way of looking at a company is through accounting data and financial information. Businesses are valued by investors, and guided by executives, relying on this same information. But the true value of a business and its performance potential can be dramatically different from the picture painted by financial reports.
It is no secret that business performance depends primarily on the ability of a company to please its market and serve it better than the competition. Every entrepreneur knows that a company's customers are the final arbiters of success or failure. So it is logical that a business should measure itself precisely the way its customers do. And to see the real value of a business, investors should focus on how well executives utilize their resources in light of the customers' requirements. Unfortunately, the traditional, accounting and financial information-oriented approach cannot evaluate a business with the customers' viewpoint. The consequence is often a bottom-line performance that is way below a company's potential.
While it's not hard to see the wisdom in orienting all aspects of one's business toward the market, in order to satisfy customers, accomplishing this objective can be very difficult. There are many traditions, conventions and "sacred cows" blocking the way. Success requires a considerable shift in thinking and the adoption of a new, market-oriented viewpoint by everyone in the organization.
Such fundamental change comes hard to many people. You may try to go in the right direction with your company and find little support. For many people it is very difficult to accept that what they have been doing, for say thirty years, is not right. People will not change because it's ordered. But people will change on their own terms. And that was my primary reason for writing this book, and for writing it as a story. My intended purpose is that by reading this book people will come to the conclusion that adopting a market oriented view will benefit them. This way, accepting the change becomes a natural transition.
The book provides the rational, purely logical reasons for thinking about business in a way that's 180 degrees from the traditional view. It makes it easy to see the problems inherent in the principles of "Scientific Management" that are the foundation of management systems used widely today, particularly in traditional manufacturing companies. If your company uses these principles, you will recognize the problems readily. You will undoubtedly see why this approach is completely out of place in today's competitive business environment.
The book is based on a series of complex projects with a major U.S. manufacturing company. The business issues you will read about are all real, none of them contrived. The company depicted in this book is in the automotive industry, however the lessons learned apply to all businesses, regardless of what they do or what their size might be.
I changed the names of products and parts. I also changed numbers such as processing speeds so as not to divulge information given to me in confidence. All of the characters are composites of several individuals and their names are made up (except for Dr. Springer to whom I owe much for teaching me).
The characters play a very important role in this book. They not only give life and reality to the issues, but their experiences take you along a logical path to the conclusion.
Some suggest that it is more appropriate to exclude people, as individuals, from a study of business. I strongly disagree. All human beings are unique, with unique abilities and personalities. That is partly what makes business so interesting, companies so diverse, and management so challenging.
Managing a company is managing its people who are all different and feel very strongly about their views. They all want to be recognized, they all want to make a mark, they all want to contribute if they are only given the opportunity. They need a single, objective point of reference to provide uncontested focus for their efforts. I hope this book will help in that regard.
For many, the solution to business problems revolves around behavioral remedies. Although I emphasize the importance of the human aspects of business, my focus is on the purely logical issues. The solution I advocate requires a major shift from conventional thinking and comes from a thorough, hard nosed, rational, objective examination of the driving forces of business.
Ultimately, a company's success depends on the ability of its people to make intelligent decisions and deal with their daily challenges in an objective fashion. So how individuals contemplate their predicament, how they change and how they triumph is what you will read about. I hope you'll find their story and their search for rational solutions easy to relate to, educational and entertaining. Even more, I hope you will find plenty of ammunition for your own battle to make your company and your own life, eminently successful. I wish you the best and look forward to hearing about your victory.