Book Review: Buffett: the making of an American Capitalist

Rarely do we get a glimpse of the life of the successful and famous.  To many in the business world Warren Buffett is more like a god than a man. In his book Buffett: the making of an American Capitalist you won’t be receiving insider investment tips but you will come to know a little of the man that has been an inspiration to business students and investment gurus for a number of decades. You will learn what made him the man he is today. Sometimes, it is those little things in life that put on us on unique paths.

Of particular interest is the information about Buffett’s life and his formation as a leading investor. He started as an odd but liked child who seemed more like a fish out of water than the confident billionaire he is today. A little socially awkward people came to accept him as he was. He watched the stocks while other boys made modeled airplanes. A boy who loved to play sports, talk of financial success, and attract other boys to him. 

He loved to read and apply those concepts to his paper route, pinball business, and future enterprises with passion. Warren was always learning and applying and made a life out of this process. With a few good mentors he became the investor magnet he is today. It was a long process of learning, adapting, and applying that seemed to meet with the right personality. Something business students should consider as they learn new knowledge and have a chance to use it.

When Warren met the professor Benjamin Graham he was able to use his native talents in a systematic way based upon the principles and philosophies of his mentor. The philosophy, “For stock speculation is largely a matter of A trying to decide what B,C, and D are likely to think-with B,C and D trying to do the same” seemed to stick. The precocious student learned quickly and developed his own methodologies. 

Much of the rest of the book talks of Warren Buffett’s life, loves, and business successes. It is more than a story of an emerging wealthy person but the way of thinking of the boy who grew to be a man that made it all possible. It is a story of financial strategy and pure diligence of a person that became known as the Oracle of Omaha. 

Warren’s story doesn’t end with this book. It is only a snap shot into his process of development and growth that led to great fortune. As recently as March of 2014 Warren is encouraging groups to become more engage in social causes that help those in need. It is these philanthropic adventures that help others to remember that wealth is not a source of happiness in and of itself. Wealth is a tool that places greater responsibilities on the owner to use money to enhance life. 

Lowenstein, R. (2008). Buffett: the making of an American Capitalist. NY: Random House

Book Review: Built to Last

Built to Last-Successful Habits of Visionary Companies by Jim Collins and Jerry Porras delves into the success of Eighteen companies. The project was started at Stanford University Graduate School of Business and analyzed what made companies successful from the stages of start-up, midsize, and large corporations. It is about those visionary companies that have made significant impact on the lives of their workers and the environment in which they exist. These companies contained a number of criteria that includes: 

-Premier institution in the industry;

-Widely admired by knowledgeable business people;

-Made an indelible imprint on the world;

-Had multiple generations of chiefs;

-Been through multiple product cycles;

-Founded before 1950

The authors discovered some interesting findings. Great companies often start out slower than other companies but win in the longer term. Most of the companies focused on building the proper infrastructure and foundations for future development. Great companies don’t exist to only make money but instead develop out of sound objectives and visions. They have a purpose to exist beyond money. The ideologies that successful companies foster are a component of how deeply within the organization they go. The deeper the values are embedded the more likely success will be found. Even though the processes and procedures change the core values do not change leading to stability of purpose.

Such companies are not afraid to make bold moves when necessary. These are not careless moves but well thought out and planned. They often select candidates that fit within their culture and ideology to achieve those moves. Often the leaders and staff are willing to experiment and find new ways of doing routine things. Sometimes they are successful and other times they fail. They often promote their CEO’s from inside the company to develop the proper skills and culture over time. Instead of trying to beat the competition visionary companies compete against themselves.  They are willing to balance between growth and stability. They were one of the first companies to adopt vision statements. 

The chapters highlight the concepts above. There is considerable discussion on each of their chosen companies and the details of what made them successful. Likewise, managers should find some practical advice such as how to develop their vision statements. The language is written at a college level or slightly above. It is not a casual read but neither is it full of scientific jargon. It is a book that managers, directors and executives should read in order to have a better perspective of their own business. 

Collins, J. & Porras, J. (2002). Built to Last. NY: Harper Collins. ISBN 0-06-051640-2

Book Review: Business Strategy by Jeremy Kourdi

The book Business Strategy-A Guide to Taking Your Business Forward by Jeremy Kourdi offers insight into understanding, developing and implementing strategy.  Each of these aspects is important for overcoming market difficulties that challenge and create difficulties for businesses. It is the ability of leaders to develop strategy and then implement that strategy in ways that are more likely to raise the success of an organization. 

The author provides a definition of strategy as it, “…is the plans, choices and decisions used to guide a company to greater profitability and success”. Strong strategies create higher levels of outputs while poor strategies often fail in their ability to meet defined goals. Such strategies should be well thought out and the alternatives should be weighed.

Henri Fayol, who established the classical school of management around 1910, developed some general management activities that fit within five sections: planning, organizing, commanding, co-coordinating and controlling:

-Planning: Understanding the organization and developing plans of action that leads to a stronger future.

-Organizing: Organizing includes the pulling together of resources to make the plan successful. 

-Commanding: Commanding can be seen as leading people through giving them appropriate direction to make the plan work. Leaders can make things happen.

-Coordinating: Coordinating involves ensuring that all people efforts, factors, and resources are put together in the most beneficial manner. 

-Controlling: Controlling entails ensuring that the process is moving along properly and is adjusted when necessary. It is possible to use feedback mechanisms, re-evaluation of strategy and other aspects in this area.

The book also discusses strategic innovation. According to the Talent foundation there are five catalysts for strategic innovation that include the following:

-Consciousness: Everyone knows the strategy and believes they can follow it. 

-Multiplicity: Groups have a wide varied of skills, backgrounds, experiences, and ideas.

-Connectivity: People have positive trusting relationships with each other. 

-Accessibility: People have access to each other and the resources they need to make their parts successful.

-Consistency:  There is a strong commitment to innovation regardless of the situation.

The book not only provides strong consideration of strategy and innovation but also provides a number of case examples for readers visualize this information. Business students and managers would find the book beneficial for their understanding. It can be a touch dry in its reading but that is what business books are by their nature. The author provides a number of references for those who are interested in additional information. 

Kourdi, J. (2009). Business strategy-a guide to taking your business forward. London, UK: Profile Books LTD. ISBN: 978 1 84668 124 0

Price: $22.00

Pages: 233

You purchase the book HERE

Book Review- Essential Deming: Leadership Principles from the Father of Quality by Dr. Joyce Orsini

The book Essential Deming: Leadership Principles from the Father of Quality by Dr. Joyce Orsini provides a strong read for managers who seek to understand the nature of quality and how to improve operations.  The book covers a number of important concepts such as management problems, quality development, methodology, research studies, knowledge vs. information, and management predictions. Each of these concepts leads the reader to understand higher methodologies in running corporations.

The book contains a number of important lists for administrators to study. It indicates that there seven deadly diseases in the way managers think. It recommends that they understand these all important concepts to improve profits: 

• 1.      Lack of constancy of purpose: Having proper plans that keep the company in business.
• 2.      Emphasis on short-term profits: An excessive push for dividends and short-term profits.
• 3.      Evaluation of Performance: Rewards for people who do well with current systems but few rewards for those who want to improve the system.
• 4.      Mobility of Management: Mobility in management from company to company creates a push for short-term profits. 
• 5.    Management by use only of visible figures: Over reliance on figures may damage unmeasured successful factors that impact the business in the long-term.
• 6.      Excessive medical costs: Increases in medical costs have limited profit margins.
• 7.      Excessive costs of liability: Contingency lawyers have raised costs of business.

The book also provides some interesting discussions on what business colleges should teach and what they should avoid. It appears that Deming wanted to see transformation in American companies. To him this starts with managers having knowledge above and beyond information. Strong business colleges should help students understand theories and then how to apply them within the workplace in order to increase their knowledge. As a professor I have seen a number of colleagues become successful at this approach and it is wonderful to contribute to such future managers understanding. Of particular interest is his understanding of what the true educational process is:

“Joy of learning comes not so much from what is learned, but from learning. It’s fun to learn, if you learn knowledge. Not fun to learn information. The joy in the job comes not so much from the result, not from the product, but from contributing to optimization of the system in which everybody wins (Deming as quoted in Orsini, 2013, pp. 200) 

The book is written at a college level and provides useful information for future managers. It would be my recommendation that students who hope to move into management read this book and take its principles in consideration. It covers everything from management systems to how to understand business studies. The book is based upon a number of lectures and writings by Edwards Deming. Quality to him started in the executive room through positive thinking and innovative products. 

Orsini, J. (2013). The Essential Deming: The Leadership Principles from the Father of Quality. NY: McGraw-Hill Books.  ISBN: 0-07-179022-5

Pages: 326

Price: $23

Blog Ranking: 4.8/5

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