Our co-founder at Cascade Strategy, Tom, asked me to share my thoughts on the best Strategy Books EVER written. That can be an overwhelming thought considering how many strategic books have been written – then to evaluate whether they are strategic and if they are any good. Next, I must deal with the other problem – I HAVE NOT read every strategic book EVER written. Despite my current quest to read 100 books in 12 months (#raceto100books) – it still barely scratches the surface.
To tackle this project, I have done what a strategist and an accountant would do. I examined the history of what other people think. Matter of fact, I reviewed 10 OTHER Top Strategic Book Review Lists including the Best Selling Strategic Books based on Amazon data. I listed all the books from the 10 different lists and sorted them based on appearing on the lists and their respective rankings on the list. The 10 lists had over 80 unique books.
To make the list of Strategy Books: Essential Strategic Reading, they had to have been listed at least 3 times AND I had to have read it before.
- Of the 80+ books, only 17 appeared twice on the lists.
- Only 9 appeared 3 times
- I did not read 3 of the 9
Drum roll please…
#5 – The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail by Clayton M. Christensen
Number of Times in the Rankings: 3
Other Rankings: Named one of 100 Leadership and Success Books to Read in a Lifetime by Amazon Editors. The Economist names it as one of the six most important books ever written, and it received the Global Business Book of the Year in 1997.
Key Story: Harvard professor Clayton M. Christensen explains why successful companies fail to see disruptive technologies impacting their market and why they ultimately fall from glory because of the changes. The innovator’s dilemma has two key parts.
- Value Innovation is an S-Curve: The initial curve is costly due to product creation and iteration; the second curve or middle curve reaps the most profit and the final curve or end of product life cycle value decreases as competition increases and product reaches saturation.
- Incumbent sized deals: As a company and its customers grow, sales expectations increase for the company. New product innovation become a smaller percentage of the total business and less of a focus as the company grows. Existing customers do not show interest in the new products.
Best Strategic Insight: As a business continues to grow, the company will move down the S-Curve with diminishing profits and customers who do not express interest to adopt something new. To break this natural trend, companies and management have to be vigilant to address the following challenges:
- Create a new technology or product with a new or “right” set of customers.
- Use a smaller group to create, sell and distribute the product which is isolated from the core business.
- Fail early and often to find the right solution.
Why You Should Read It: Managers who lead an organization to the top of any specific market generally believe they “know” how to be successful. This bias (or blindness) doesn’t enable them to see the potential risk of new technologies impacting their market and even worse – they most likely will not know how to navigate the new market conditions until it is too late. More importantly…it just may save your company. This often requires outside consulting to help a company see what they can’t see.
Number of Times in the Rankings: 3
Other Rankings: In 2011, it was #19 on Time Magazine’s list of the 100 most influential books.
Key Story: In the 1930’s, Dale Carnegie was a successful sales person and he eventually built another business teaching a 14-week course on how to work with people. One of the attendees worked at Simon & Shuster and he convinced Carnegie to make it into a book. He outlines the 12 things that the book will do for you including:
- Change your outlook to be more positive (written during the Depression.)
- Increase your influence, your prestige, and your ability to get things done.
- Improve your selling and leadership skills.
Best Strategic Insight: Carnegie outlines three key techniques to working with people. They are contrary to the way most of us live.
- Don’t criticize, condemn, or complain.
- Give honest and sincere appreciation.
- Arouse in the other person a desire or an “eager want.”
Why You Should Read It: Machines are gaining power, but it is people who still rule the world. This book will teach you lessons on how to work with the rest of us in a variety of different situations and it has stood the test of time. More importantly, applying the concepts will also make you a happier person
Number of Times on the Rankings: 3
Other Rankings: After 2,500 years, the Art of War is one of the most influential strategic books in East Asian warfare and the #1 Best Seller in History of Education.
Key Story: Sun Tzu, translated into Master Sun, was an ancient military strategic leader from China during the late 6th century BC from the continuous wars of seven Kingdoms/States. The most famous story is when the King of Wu ordered Sun Tzu to train a harem of 180 concubines into soldiers. Sun Tzu ordered the King’s two favorite concubines as officers. His first command was met with laughter and he reiterated that it was at the command of the General. He then ordered a second command and received the same response. As a result of the insubordination, Sun Tzu had both concubines executed. He chose two new concubines as officers and every order and command was maneuvered with perfection from that point forward.
Best Strategic Insight: Although the key story is graphic and shocking, this book goes far beyond military strategies. Sun Tzu highlights the many important lessons of working with people including the use of diplomacy. Three of my favorite Sun Tzu quotes and comparisons from the Six Principles of Sun Tzu & the Art of Business:
- Avoid your competitor’s strength and attack their weakness.
- “Any army may be likened to water, for just as flowing water avoids the heights and hastens to the lowlands, so an army avoids and strikes weakness.”
- Use speed and preparation to swiftly overcome the competition.
- “To rely on rustics and not prepare is the greatest of crimes; to be prepared beforehand for any contingency is the greatest of any virtues.”
- Develop your character as a leader to maximize the potential of your employees.
- “When one treats people with benevolence, justice and righteousness, and reposes confidence in them, the army will be united in mind and all will be happy to serve their leaders.”
Why You Should Read It: Because Tony Soprano said he was reading it on the Sopranos in 2001? Despite the pop culture, the above quote spiked the volume of copies ordered for this book written over 2,500 years ago. The Art of War remains influential and its first English copy was completed in 1910. The book continues to be a dominant theory in East Asian culture and more recently in western culture. Many modern strategic theories are rooted in these original writings and it has been influential to military leaders Mao, Ho Chi Minh and Colin Powell.
Number of Times in the Rankings: 7
Other Rankings: Named bestseller by Wall Street Journal and Business Week. Fast Company Leadership put the book to it’s Hall of Fame. The China Research Institute named it as one of the 40 most influential books.
Key Story: Based on research of 150 strategic decisions ranging over 100 years and 30 industries, this is one of the deepest reflections upon what makes companies work – and what doesn’t. The blue and red ocean are outstanding analogies. In a deeply competitive environment, organizations must battle and scrape for every dollar of profit. All the blood, sweat and tears is represented in this red ocean environment. Blue oceans are organizations taking strategic decisions to sail free from the competition into their own successful environment with higher profits and less competition.
Best Strategic Insight: Blue Ocean strategy creates a framework to differentiate themselves in the marketplace.
- Raise: Identify product, pricing, and service standards within an industry.
- Eliminate: Reduce any unnecessary costs and/or create a new market segment.
- Reduce: If the part or process cannot be eliminated; what can be done to reduce the costs or outsource.
- Create: Continue to create new products and services to differentiate compared to the competition.
Why You Should Read It: By all accounts, this was the most referenced strategic book, in 7 of the 10 rankings. The book provides great examples of how Cirque du Soleil, Southwest Airlines, and Dyson vacuums created blue oceans in a previously considered red ocean environment. Since the writing in 2005, the following companies are examples of blue ocean strategies including Pitney Bowes, Tata Motors, and Starbucks.
Number of Times on the Rankings: 3
Other Rankings: Several members of Wall Street Journal’s CEO Council said it was the best management book they’ve read. This sold over 5 million copies outpacing Blue Ocean Strategy.
Key Story: This is the compassionate result of a 5-year study of 1,435 good companies spanning 40 years. Only 11 companies made the list for being considered great. To make the list, each company had to beat the general stock market by at least 3 times over a period of 15 years. After researching the 11 companies and then selecting comparison companies to understand the differences of what they did to become great versus everyone else who didn’t. For the period of study, they identified that the findings were nearly mathematically impossible to refute.
Best Strategic Insight: Jim Collins did have a bias – he did NOT – want this to be a book about leadership. He wanted to show the empirical findings on how these businesses used specific strategies to meet this ranking for only 0.77% of the population. And the team found many awesome findings such as:
- Identifying the proper method for change management, aka the Flywheel Effect.
- Getting the right people on the bus (company) and in the right seats.
- Use of the Hedgehog Concept
- Stop doing things that are against your strategy
Yet, they also found that every Good to Great company had a Level 5 Leader. The right type of leadership mattered.
Why You Should Read It: This is my favorite business book and I think you will find it as well. Read it and listen to it on audible – you can hear Jim Collins passion for the research, surprise findings, and amazing insights. Becoming great isn’t easy; but there is a proven formula to get it done.
Next month, I will reveal the Best of the Rest Strategic Books. This Top 10 will include my personal reading/ranking of the three that I did not read and my favorites from the rest of the list.
Until next time, be Strategic with your Reading.
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