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Silicon Valley’s Founding Fathers // Book Summary of David Packard’s “HP Way”

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'The HP Way' by David Packard (ISBN 0060845791) David Packard’s The HP Way recalls how he and Bill Hewlett started one of the world’s most successful corporations in 1937 with just $538 (today’s $8,850 when adjusted for inflation) and a rented one-car garage in Palo Alto, California. That garage is recognized today as the birthplace not only of Silicon Valley, but also of a new management approach.

Bill and David first met as electrical engineering students at Stanford University. Despite their different dispositions, they shared a passion for the outdoors and, with a professor’s encouragement, started Hewlett-Packard (HP) to commercialize the latest “radio engineering” theories. Over the decades, HP invented many groundbreaking electrical gadgets that were crucial to the development of radars, instrumentation devices, computers, and other technological revolutions.

In addition to their technical innovations, Bill and David established many progressive management practices that prevail even today. Starting in the initial days at the garage, the culture that Bill and David engendered at HP was unlike the hierarchical and egalitarian management practices that existed at other corporations of their day.

The essence of the “HP Way” was openness and respect for the individual. (Bill Hewlett once sawed a lock off a tool-room cabinet and left a note, “HP trusts its employees.”)

Management by objectives, managing by wandering about, nursing-mother facilities, flextime, decentralization, intrapreneurship, catastrophic medical insurance, profit sharing, employee stock ownership, tuition assistance, and many other management principles that dominate human resources practices today were all pioneered—if not invented—at HP.

Recommendation: Read. The HP Way tells the story how Bill and David built a company based on a framework of principles and the simplicity of their management methods. Good to Great author Jim Collins once wrote in commending David Packard’s The HP Way, “The greatest lesson to be divined from this book isn’t so much how to create a similar company but how creating a company based on a strong and clear set of values can lead to outstanding success.”

Postscript: Notes from ‘The HP Way’

  • Like Sam Walton, the other illustrious entrepreneur of their generation, Bill and David grew up witnessing Americans’ hardships during the Great Depression. This made them risk-averse; they vowed never to incur long-term debt to expand their fledgling company.
  • On the day Hewlett-Packard went public in 1961, David Packard took a subway instead of a taxi to Wall Street, lost his way, and reached the New York Stock Exchange late.
  • The foundations that Bill Hewlett and David Packard established individually with 95% of their stakes in HP are today two of the most prominent philanthropies in America.

Wondering what to read next?

  1. Ten Rules of Management Success from Sam Walton
  2. Lessons from Airline Entrepreneur David Neeleman: Staff Your Weaknesses
  3. To Know Is to Contradict: The Power of Nuanced Thinking
  4. HP’s “Next Bench” Innovation Mindset: Observe, Learn, Solve
  5. Transformational Leadership Lessons from Lee Kuan Yew, Singapore’s Founding Father

The Spectacular Rise and Fall of Avon’s Andrea Jung // Book Summary of Deborrah Himsel’s ‘Beauty Queen’

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When companies do well, their CEOs are often heralded as outstanding visionaries and brilliant innovators. In particular, when macroeconomic conditions are favorable, these CEOs are sheltered from scrutiny because the spoils of their success deflect attention from their leadership shortcomings (see my previous article on how success often conceals wickedness.) When the tide turns, however, the leadership deficiencies are exposed for all to see. The CEOs are the first to get the blame, even if they may not merit it.

Deborrah Himsel’s Beauty Queen offers an insightful tale of the spectacular rise to the top and the tumultuous fall from grace of Andrea Jung. Beauty Queen divides Jung’s tenure as the CEO of cosmetics company Avon from 1999 to 2012 into two halves: Jung led six consecutive years of double-digit growth initially and then presided over a series of operational missteps that led to her resignation. Alas, Avon has never since recovered—its numerous restructuring efforts have failed, and its strategic and financial performance has severely deteriorated.

The Rise of Andrea Jung and Avon (1999–2005)

'Beauty Queen: Inside the Reign of Avon's Andrea Jung' by Deborrah Himsel (ISBN 113727882X) Promoted at age 41, Andrea Jung brought glamour, charm, and personal style to her CEO’s role. She quickly reshaped Avon’s image and articulated a powerful purpose for the company. She injected energy into a decaying cosmetics brand and pushed Avon into new profitable markets in China, Russia, and other countries. When Jung became CEO, 60% of Avon’s sales were in the United States; by 2011, only 17% of sales were in the United States and 70% were in developing markets.

Jung’s revival of Avon’s fortune catapulted her fame; she became one of America’s most recognized chief executives. Fortune magazine named her one of the most powerful women in the world. Jack Welch recruited her to General Electric’s board of directors.

Beauty Queen attributes this initial success not only to Jung’s inherent strengths in marketing and branding, but also to her right-hand person Susan Kropf. Kropf was a brilliant operations person, who balanced Jung’s acute lack of skills in running the day-to-day operations of a global company.

The Fall of Andrea Jung and Avon (2005–2012)

Avon’s sales started to slow down in 2005. And, Susan Kropf’s exit in 2006 corresponded with the dawn of Avon’s misfortunes. Andrea Jung never replaced Kropf; Avon was left without a chief operating officer.

As Avon started to struggle, Jung’s inadequate operations experience became a serious liability. A streak of self-inflicted problems resulted in strategic and operational disasters that took a huge financial toll and resulted in a flight of Avon’s top talent. Jung failed to deal effectively with failures of computer systems in Brazil, inadequate inventory and supply-chain management, poor management of working capital, and a staggering bribery scandal in China.

Jung’s lack of expertise to deliver results went up against her bold projections about the business’s future. Straying from Avon’s door-to-door direct selling roots, Jung experimented with a direct-selling channel, but quickly abandoned her strategy of running Avon retail stores. Her attempts to start baby-goods and other new product lines foundered after just two years. Avon’s many acquisitions failed; a silver jewelry company (Silpada) that Jung bought for $650 million had to be sold back to the original owners for $85 million.

Avon never recovered from the blunders that Andrea Jung presided over

Avon Beauty Products After Jung’s several turnaround efforts had failed to take hold, she resigned in 2011. Her replacement, former Johnson & Johnson executive Sheri McCoy, has since struggled to turn the company around.

The bribery scandal in China impaired Avon. In 2014, Avon settled the case with the Justice Department and the SEC for $135 million. To boot, Avon not only spent $350 million on legal fees, but also lost ground in the burgeoning cosmetics market in China.

Avon’s market value fell from $21 billion (1-Mar-2004) at the height of Jung’s success to $1.1 billion (15-Jan-2016). The company’s stock price fell from $44.33 to $2.50.

Lessons from Andrea Jung’s Leadership Style at Avon

Some of the most instructive leadership lessons from Beauty Queen are,

  • “Studying the trajectory of the Avon CEO is a great way to learn leadership. Andrea’s career … offers invaluable lessons about finding the right balance between substance and style.”
  • “Her story is a cautionary tale, one that suggests the critical importance of being aware of your weaknesses and how they can sabotage you.”
  • Leaders should know when to go. “If Andrea had departed in 2008, she would have left with her reputation and halo fully intact … CEOs that are successful early on often err on the side of staying too long.” [See my previous article on why leaders better quit while they’re ahead.]
  • Companies should pair up their leaders with deputies who have complementary skills to offset the Achilles’ heels of the leaders.

Recommendation: Skim through the first six chapters of Beauty Queen for an informative quick read on Andrea Jung’s rise and fall at Avon. Thumb through the next five chapters for an uninteresting discussion of broad leadership lessons and action lists in dry PowerPoint style.

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  2. You Too Can (and Must) Become Effective // Summary of Peter Drucker’s The Effective Executive
  3. How to Manage Smart, Powerful Leaders // Book Summary of Jeswald Salacuse’s ‘Leading Leaders’
  4. Five Rules for Leadership Success // Summary of Dave Ulrich’s ‘The Leadership Code’
  5. Never Criticize Little, Trivial Faults

Do Self-Help Books Really Help?

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Do Self-Help Books Really Help?

Thousands of self-help titles are published every year with the promise of helping you lose weight, manage relationships, cope with stress, or solve personal problems. Almost all contain glowing testimonials by people whose lives have seemingly been transformed. However, taken as a whole, are self-help books merely empty assurances designed to sell a product?

Self-Help Books Bring Hope that Change is Possible

Even though self-help books have been accused of promoting the “false hope syndrome” and contain many exaggerated and untested claims, by exposing readers to a sizable dose of hope and promise, these books help readers cope with their problems and challenges, even if the books don’t necessarily make readers thin, rich, and ecstatically happy.

Self-help books can be classified as those that offer general-purpose advice (e.g. on personal growth or career success) and those that offer advice on specific, well-defined problems (e.g. transition into a management position, seeking and using advisers, managing a life transition such as pregnancy or divorce.) It is the second type of self-help books that are most effective, especially in combination with some counseling or mentoring. In fact, psychologists use the term “bibliotherapy” to identify therapy that involves reading specific texts with the purpose of healing.

A Matter of Discipline, Not Motivation

The helplessness of self-help books is not so much with the books themselves, but with the readers. Most people who buy dieting books don’t seem to lose weight. They feel no outcome whatsoever from reading the books and tend to dismiss the books as “not working.” Often, they don’t realize that losing weight and getting in shape comes not from buying and reading these books, but consuming the recommended food and practicing the weight-loss strategies and fitness regimens contained in these books.

Self-help books that offer a framework for thought and action can be effective only if readers can translate the motivation from the book to a discipline to take whatever action necessary to achieve what they desire. As I mentioned in my previous article comparing discipline and motivation, people who actually get things done are those who find a way to work at whatever they are interested in even when they do not really feel like doing it.

Idea for Impact: Self-help media (just like mentors, therapists, counselors) can motivate and teach specific skills that can produce real change, but only through discipline and regular practice.

Also, read my articles on why extrinsic motivation doesn’t work here and here.

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  3. The Problem with Self-Help
  4. What Your Messy Desk Says About You
  5. Thinking Straight in the Age of Overload // Book Summary of Daniel Levitin’s ‘The Organized Mind’

Lessons from Sam Walton: Learning from Failure

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Sam Walton (1918–1992) experienced failures and setbacks. And, like all successful people, the iconic founder of Walmart and Sam’s Club prided himself on learning from those experiences.

Walton’s Initial Success … and Then, in a Heartbeat, Failure

By 1950, a 32-year-old Sam Walton had established himself as a successful retailer in Newport, Arkansas. In 1945, Walton had purchased a Ben Franklin variety store and set up a five-year personal goal to make it the most profitable variety store in the region. By 1950, Walton had a record $250,000 in sales and $30,000 to $40,000 in profit (some $2.5 million in sales and $300,000 to $400,000 in profits in today’s dollars.) His success had attracted a lot of attention.

Not only that, the young Walton family—Sam, his wife Helen, and four young children—had firmly established itself in Newport. Sam and Helen were very active in the community and had taken up prominent civic and church duties.

An innocuous legal oversight cost him this success. When he had signed the lease on the property rental for his Ben Franklin variety store in 1945, thanks to inexperience and excitement at becoming a merchant, Walton had agreed to give back the landlord 5% of sales. He later discovered this was the highest any retailer had paid for rental.

More significantly, Walton had also neglected to add a clause in his lease that would give him the option to renew the lease after five years. Therefore, in 1950, when the lease on Walton’s Ben Franklin store expired, his sneaky landlord knew there was nowhere else in town for Walton to relocate his store. The landlord refused to renew Walton’s lease at any price! The landlord bought Walton’s well-established store along with its fixtures and inventory and transferred the store to his son. Walton was devastated; he had no choice but to give up his successful store. In his best-selling autobiography Made in America, Walton recalled this as the lowest point of his business life:

I felt sick to my stomach. I couldn’t believe it was happening to me. It really was like a nightmare. I had built the best variety store in the whole region and worked hard in the community, done everything right, and now I was being kicked out of town. It didn’t seem fair. I blamed myself for ever getting suckered into such an awful lease, and I was furious at the landlord. Helen, just settling in with a brand-new family of four, was heartsick at the prospect of leaving Newport. But that’s what we were going to do.

Sam Walton Was Not One to Dwell on Disasters

All the hard work he had put in to build a successful store and the earning power he had established over five years had become worthless because of an innocuous mistake. Nevertheless, Walton didn’t let this disaster get him down.

I’ve never been one to dwell on reverses, and I didn’t do so then. It’s just a corny saying that you can make a positive out of most any negative if you work at it hard enough. I’ve always thought of problems as challenges, and this one wasn’t any different. I don’t know if that experience changed me or not. I know I read my leases a lot more carefully after that, and may be I because a little wary of just how tough the world can be. Also, it may have been about then that I began encouraging our eldest boy—six-year-old Bob—to become a lawyer. But I didn’t dwell on my disappointment. The challenge at hand was simple enough to figure out. I had to pick myself up and get on with it, do it all over again, only even better this time.

This Newport experience turned out to be a blessing in disguise for Walton. His family relocated to the relatively obscure Bentonville, Arkansas, for a brand-new start. Walton started over and established himself as a retailer again—only in even bigger and better ways. In 1962, Walton decided that the future of retailing lay in discounting. His strategy of buying low, selling at a discount, and making up for low margins by moving vast amounts of inventory, made Walmart the most successful retailer ever. From 1985 until his death in 1992, he was the richest man in the world.

Successful People Learn from Failure and Get On

'Sam Walton: Made In America' by Sam Walton (ISBN 0553562835) Walton’s was a typical entrepreneurial response to failure—successful people take risks, fail sometimes, but pick themselves up, ask what they can learn from the experience, and try again, even harder the next time.

On a related note, Bill Gates, the most successful entrepreneur of his generation, once said, “Success is a lousy teacher. It seduces smart people into thinking they can’t lose.”

Complement this lesson on failure with J.K. Rowling’s reflections on the benefits of failure in her famous 2008 commencement address at Harvard: “Failure meant a stripping away of the inessential. I stopped pretending to myself that I was anything other than what I was, and began to direct all my energy into finishing the only work that mattered to me…The knowledge that you have emerged wiser and stronger from setbacks means that you are, ever after, secure in your ability to survive.”

Wondering what to read next?

  1. How to Face Your Fear and Move Forward
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  3. Success Conceals Wickedness
  4. Lessons on Adversity from Charlie Munger: Be a Survivor, Not a Victim
  5. Power Corrupts, and Power Attracts the Corruptible

Success Conceals Wickedness

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Biographies of Steve Jobs (by Walter Isaacson,) Jeff Bezos (by Brad Stone,) and Elon Musk (by Ashlee Vance)

Two common themes in the biographies of Steve Jobs (by Walter Isaacson,) Jeff Bezos (by Brad Stone,) and Elon Musk (by Ashley Vance) are these entrepreneurs’ extreme personalities and the costs of their extraordinary successes.

The world mostly regards Musk, Jobs, and Bezos as passionate, inspiring, visionary, and charismatic leaders who’ve transformed their industries. Yet their biographies paint a vivid picture of how ill-mannered these innovators are (or were, in the case of Jobs). They exercise ruthless control over every aspect of their companies’ products but have little tolerance for underperformers. They are extremely demanding of employees and unnecessarily demeaning to people who help them succeed.

  • Steve Jobs was renowned for his cranky, rude, spiteful, and controlling outlook. Biographer Isaacson recalls, “Nasty was not necessary. It hindered him more than it helped him.” Jobs famously drove his Mercedes around without a license and frequently parked in handicapped spots. For years, he denied paternity of his first daughter Lisa and forced her and her mother to live on welfare. He often threw tantrums when he didn’t get his way and publicly humiliated employees.
  • In a 2010 commencement address at Princeton, Jeff Bezos recalled his grandfather counseling, “Jeff, one day you’ll understand that it’s harder to be kind than clever.” Still, according to Brad Stone’s biography, Bezos often imparts insulting rebukes and criticisms to employees: “I’m sorry, did I take my stupid pills today?” “Are you lazy or just incompetent?” “Why are you wasting my life?” and “Do I need to go down and get the certificate that says I’m CEO of the company to get you to stop challenging me on this?”
  • According to Ashlee Vance’s biography, when an executive assistant asked for a raise, Elon Musk asked her to take a two-week vacation while he contemplated her request. When the assistant returned from vacation, Musk fired her.

“Success covers a multitude of blunders”

The great Irish playwright Oscar Wilde once remarked, “No object is so beautiful that, under certain conditions, it will not look ugly.”

The other great Irish playwright George Bernard Shaw wrote, “Success covers a multitude of blunders.”

British politician and historian Lord John Dalberg-Acton famously said, “Power tends to corrupt and absolute power corrupts absolutely. Great men are almost always bad men, even when they exercise influence and not authority: still more when you superadd the tendency or the certainty of corruption by authority. There is no worse heresy than that the office sanctifies the holder of it. That is the point at which … the end learns to justify the means.”

Ethics Violations by NBC News Anchor Brian Williams

In 2015, NBC suspended prominent news anchor Brian Williams after internal investigations revealed no less than 11 instances where he either embellished facts or bent the truth. Members of his team and NBC staffers who knew about these ethics violations chose to overlook because he was powerful. According to The New York Times,

Mr. Williams has been drawing 9.3 million viewers a night, and his position seemed unassailable. Even as the stature of the nightly newscast faded in the face of real-time digital news, Mr. Williams was one of the most trusted names in America … He was powerful. Williams had the ear of NBC boss Steve Burke. He was a ratings powerhouse. And he spent years overseeing TV’s most watched newscast. He was a winner, for himself, those around him and those above him—until it became clear the man who is supposed be among the most trusted in America had issues with telling the truth.

Power Corrupts the Mind

Brilliant men and women engage in morally wrong conduct simply because they can. They can get away with extreme pride, temper, abuse, and other disruptive behaviors because their spectacular success can and does cover many of their sins, even in the eyes of those at the receiving end of their crudeness.

Our high-achieving culture adores the successful, the powerful, and the rich. And part of this adoration is the exemption we grant these celebrities from the ordinary rules of professional civility.

Idea for Impact: The more people possess power and the more successful they get, the more they focus on their own egocentric perspectives and ignore others’ interests.

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  5. Is Showing up Late to a Meeting a Sign of Power?

Books I Read in 2015 & Recommend

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In addition to a number of Rick Steves’ and Lonely Planet books for my summer-long travels across Europe, here are a few books that I read in 2015 and recommend.

  • Biography / Business: Brad Stone’s The Everything Store: Jeff Bezos and the Age of Amazon is an engrossing chronicle of the obsessive hard-driving personality of its founder-CEO and the company that has played the pivotal role in the shift from brick-and-mortar retail to online retail.
  • 'Onward: How Starbucks Fought for Its Life without Losing Its Soul' by Howard Schultz, Joanne Gordon (ISBN 1609613821)Biography / Leadership: Starbucks founder Howard Schultz’s Onward: How Starbucks Fought for Its Life without Losing Its Soul is an interesting depiction of Starbucks’ turnaround after Schultz returned as CEO in 2008. Read Onward for a case study of the founder’s syndrome in action and a self-congratulatory portrait of a charismatic entrepreneur and brilliant corporate cheerleader. Read my summary.
  • Biography / Business: Ashlee Vance’s Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future is a biography of America’s current most audacious entrepreneur and Silicon Valley’s most prominent innovator. While the book details Musk’s bold leadership decisions, it also serves as a great reminder of how an extreme personality and intense success are not without their costs. Read my comments.
  • Decision-Making: Phil Rosenzweig’s Left Brain Right Stuff delineates distinct but complementary skills required for making winning decisions: logical analysis and calculation (left brain skills) and as well as the willingness to take risks, push boundaries, and go beyond what has been done before (right brain skills.)
  • 'Surely You're Joking, Mr. Feynman!' by Richard Feynman, Ralph Leighton (ISBN 0393316041)Biographies / Mental Models: Physicist and Nobel Laureate Richard Feynman’s scientific curiosity knew no bounds. His academic life, acuity, life-philosophy, and ability to communicate science are inspirational to anyone pursuing his/her own life’s fulfillment. The following biographies capture his many scientific achievements, playfulness, varied interests and hobbies, and—perhaps most notably—his many eccentricities.
  • 'Sam Walton: Made In America' by Sam Walton (ISBN 0553562835)Biography / Business: Sam Walton’s bestseller autobiography Made in America is very educational, insightful, and stimulating. Walton inspired legions of other entrepreneurs who thrive on managing costs and prices to gain competitive advantage. Read about an important lesson from this book about cost and price as a competitive advantage.
  • Decision-Making: Suzy Welch’s 10-10-10 Rule advocates considering the potential positive and negative consequences of all decisions in the immediate present, the near term, and the distant future: or in 10 minutes, 10 months, and 10 years. Read my summary.
  • Biography / Mental Models: Walter Isaacson’s A Benjamin Franklin Reader is an excellent collection of the writings of Benjamin Franklin, one of America’s most beloved founding fathers. Franklin was a polymath renowned for his lifelong quest for self-improvement.
  • 'The Art of Stillness: Adventures in Going Nowhere' by Pico Iyer (ISBN 1476784728)Philosophy: Pico Iyer’s The Art of Stillness argues the importance of taking a timeout from busyness. Iyer contends, “In an age of speed … nothing could be more invigorating than going slow. In an age of distraction, nothing could feel more luxurious than paying attention.” Read my summary.
  • Biographies / Art / Philosophy: Steven Naifeh and Gregory Smith’s Van Gogh: The Life and Michael Howard’s Van Gogh: His Life & Works in 500 Images paint a vivid picture of the artistic genius and the troubled personal life of Vincent van Gogh. Ever Yours is an absorbing anthology of correspondence between Vincent and his brother Theo. Ever Yours sheds light on Vincent’s shifting moods, turbulent life, and philosophical evolution as an artist.
  • Management: Ken Blanchard and Spencer Johnson’s One Minute Manager is a best-selling introductory business book about goal-setting and giving feedback. Read my summary.
  • Biographies: Tenzing Norgay’s autobiography Man of Everest and Yves Malartic’s Tenzing of Everest portray the personal triumph of a poor and illiterate but ambitious, deeply religious explorer.

On a related note, read my article about reading hacks: How to Process that Pile of Books You Can’t Seem to Finish. Also see books I read in 2014 & recommend.

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  4. Book Summary of Viktor Frankl’s ‘Man’s Search for Meaning’
  5. Crucible Experiences Can Transform Your Leadership Skills

Lessons from the Biography of Tesla’s Elon Musk

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I recently finished reading Ashlee Vance’s riveting portrait of Elon Musk, the CEO of Tesla Motors, CEO of SpaceX, chairman of SolarCity, and previously the founder of PayPal and other companies.

Musk has emerged as the foremost superstar/visionary-entrepreneur of Silicon Valley since Apple’s Steve Jobs passed away in 2011.

'Elon Musk' by Ashlee Vance (ISBN 0062301233) Vance’s biography reveals how Musk’s “willingness to tackle impossible things” has “turned him into a deity in Silicon Valley.”

Vance’s biography portrays Musk as an obsessively focused and a remarkably driven entrepreneur, but one who is almost unbearably difficult to work with. Musk is tirelessly demanding of employees, has low tolerance for underperformers, and does not like to share credit for successful ventures.

The book’s key takeaway is actually an admonitory lesson: Elon Musk may well be one of the most successful entrepreneurs of all time—if your characterization of success is rather narrow. However, having an extreme personality and attaining great success come at the cost of many other things. In his drive to win, Musk sacrifices friends, business associates, and even his family to get what he wants. The story of Elon Musk exemplifies what happens when an overachieving leader regards individuals as tools and attaches more importance to his projects than to his people.

Complement Ashlee Vance’s “Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future” with biographies of two other entrepreneur-visionaries with aggressively competitive personalities: Walter Isaacson’s “Steve Jobs” and Brad Stone’s “The Everything Store” Like Elon Musk, both Jobs and Bezos are reputed for their personal influence on every aspect of Apple and Amazon’s products and services. They are described as being demanding and demeaning to people who helped them realize their visionary aspirations.

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  3. Success Conceals Wickedness
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  5. Lessons on Adversity from Charlie Munger: Be a Survivor, Not a Victim

Starbucks’s Comeback // Book Summary of Howard Schultz’s ‘Onward’

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Starbucks founder, Chairman, and CEO Howard Schultz’s “Onward: How Starbucks Fought for Its Life without Losing Its Soul” is an interesting case study of organizational change as orchestrated by a passionate entrepreneur. The book covers the first two years of the turnaround of Starbucks after Schultz returned as CEO.

'Onward: How Starbucks Fought for Its Life without Losing Its Soul' by Howard Schultz, Joanne Gordon (ISBN 1609613821) In 2007, in the face of falling consumer spending and the upcoming Great Recession, the consumer discretionary sector was hit hard. Like other companies in that realm, Starbucks’ sales and profitability had dropped. The company’s stock price plummeted after Wall Street pared the rich valuations (high price-to-earning) of the company’s once-hot growth stock. Through these trials, Schultz worked at the company’s Seattle headquarters as chairman. Even after retiring as CEO in 2001, he had never left the company entirely and had even interjected often during Starbucks’ presentations to investors.

Starbucks’ financial under-performance was likely as much due to the economic slowdown as it was self-inflicted. In an apparent instance of misplaced cause-and-effect, Schultz blamed the company’s leadership for focusing too much on rapid expansion, opening too many stores, and diluting the in-store Starbucks experience. Behind the CEO’s back, Schultz started working with strategy consultants and other board members to develop a “transformational agenda” centered on the core values of the company he had founded in 1982.

In January 2008, Schultz invited the CEO home on a Sunday evening, fired him, and assumed the CEO position for a second stint. Over the next two years, Schultz rejuvenated the company’s mojo by making operational improvements and focusing on employee engagement, Starbucks’ specialty coffee products and its distinctive in-store customer experience.

Schultz’s vision, focus, and execution of this transformation makes up the bulk of “Onward”. One dominant theme in the book is founder’s syndrome—the intense reluctance of entrepreneurs like Schultz to cede control of their businesses.

Towards the end of 2009 (when “Onward” was authored,) the economy started to improve. A measured recovery in consumer confidence invigorated the fortunes of most consumer discretionary companies that had suffered during the downturn. At Starbucks, customers returned to stores and spent more. Sales and profitability improved. The company’s valuation on Wall Street soared again. Conceivably, Starbucks may have enjoyed a comeback even if Schultz had remained just the chairman, retained and supported the CEO, and worked with the company’s leadership team to initiate course corrections.

That Starbucks continues to be an American success story and has done extraordinarily well to date under Schultz’s leadership is one more instance of a beloved fairy tale in the world of business—that of a company in distress rescued by the return of its visionary founder.

“Onward” is Schultz’s somewhat grandiose narrative of his return as CEO. The 350-page book is brimming with peripheral details, self-congratulatory superlatives, recurring claims, and Pollyanna-isms that are illustrative of a charismatic entrepreneur and a brilliant corporate cheerleader.

Recommendation: Skim. (For Starbucks aficionados: Read.)

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  3. How Starbucks Brewed Success // Book Summary of Howard Schultz’s ‘Pour Your Heart Into It’
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  5. You Too Can (and Must) Become Effective // Summary of Peter Drucker’s The Effective Executive

Books I Read in 2014 & Recommend

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Other than a number of Rick Steves’ books for my summer-long travels in Europe, here are a few books that I read in 2014 and recommend.

Even though I read few works of fiction, I read a number of Agatha Christie’s “Poirot” books, including the enthralling “Death on the Nile”. Christie describes her characters brilliantly with superb detail.

Books on Business, Operations, & Finance

Books on Skills for Success

Four Timeless Books I Re-Read Every Year

'Common Stocks and Uncommon Profits' by Philip A. Fisher (ISBN 0471445509) Benjamin Graham’s “Security Analysis”, Benjamin Graham’s “The Intelligent Investor”, and Phil Fisher’s “Common Stocks and Uncommon Profits” discuss two complementary schools of investment analysis. Graham’s quantitative approach to value investing comprises of buying stocks below what they are worth and then selling them once they are fully priced. In contrast, Fisher’s qualitative approach to growth investing considers the intangibles (products and services, management, competition, growth prospects, etc.) and paying a premium for growth. Graham’s and Fisher’s viewpoints are a significant part of Warren Buffett’s approach to investments. He’s described himself as “85% Graham, 15% Fisher” (I think Buffett is more “15% Graham, 85% Fisher.”)

Dale Carnegie’s “How to Win Friends and Influence People” is the granddaddy of all self-help books that spawned the self-improvement industry. I discovered that the 2011 update, “How to Win Friends and Influence People Digital Age”, references my blog article on the art of remembering names.

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Book Summary of Viktor Frankl’s ‘Man’s Search for Meaning’

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Man's Search for Meaning » Austrian psychiatrist Viktor Frankl In “Man’s Search for Meaning,” Austrian psychiatrist Viktor Frankl makes the case that the primary motivation in one’s life is neither pleasure (as proposed by Sigmund Freud) nor power (as proposed by Alfred Adler), but meaning and purpose.

Viktor Frankl is the pioneer of “logotherapy,” a psychotherapy system that carries out an existential examination of a person and consequently helps him/her discover purpose and meaning in his/her life.

Principal ideas from “Man’s Search for Meaning”:

  • Based on his experience as an inmate at many Nazi concentration camps during the Second World War, Viktor Frankl observed that those who survived the longest in the Nazi concentration camps were not those who were physically strong, but were those who maintained a sense of control over their environment by finding meaning in their existence and their torments.
  • Even in the toughest of circumstances, life can be given a meaning, and so too can suffering. A person can learn how to cope with suffering and move ahead with a renewed sense of purpose and meaning.
  • Meaning in life can be discovered by taking responsibility and through “right conduct” by,
    • Contributing meaningfully to the world through self-expression and resourcefulness,
    • Experiencing the world by connecting meaningfully with others and with our environment, and
    • Probing our attitudes and changing our approach meaningfully when we face situations that we have little control over.

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