“101 Things I Learned in Business School” by Michael Preis with Matthew Frederick, Grand Central Publishing, $15.
It’s Business Basics 101. If you don’t have a business background and are self-employed or working in a firm and plan to climb the career ladder, use the book as your reference guide to understanding what it takes to operate a business and manage people.
Here are some highlights:
2. “Business is not a single field of endeavor.” It meshes various parts into an on-the-same-page entity. Accounting is its monetary language. It provides a financial report card. Finance involves money management — today and tomorrow. Marketing deals with 4 P’s: Product, Place, Promotion and Price. Production and operations coordinates and oversees manufacturing/service provision. Organizational behavior (I believe it’s most important) involves leadership, a firm’s culture, managing and motivating.
5. “Not all capital is economic.” Intellectual capital is proprietary information created in-house; it includes patents, technologies and processes. Human capital is the workforce that makes things happen or let’s them happen. Social capital is the interaction between employees, business partners and customers. No employee treats a business partner or customer better that he/she is treated by the firm. Brand Equity is the value of the brand in the eyes of partners and customers. Deliver what you promised on time and within budget.
10. “How to run a meeting.” Distribute an agenda at least three days in advance; it should indicate priorities. Designate a note taker to distribute minutes and a timekeeper to keep things moving. Begin on time. Stay on the agenda; bring off-on-tangent discussions back to agenda items. Allow one person to speak at a time; no sidebars. Summarize conclusions; decide next steps (and who’s responsible). I’d add: “No e-mail or texting allowed.”
56. “Your most unhappy customers are your greatest source of learning.” Your dissatisfied customers are also your competitors’ best advertising.
70. “Not to decide is to decide.” Inaction means you decided to let things happen (i.e. others control a decision which could have an impact on you).
102. (Mine): “Use the book’s 101 tips to make you think about where you are, where you want to be and how to get there.”
“Vested Outsourcing: Five Rules That Will Transform Outsourcing” by Kate Vitasek with Mike Ledyard and Karl Manrodt, Palgrave MacMillan, $45.
Many companies see cost-cutting as the benefit of outsourcing. They forget that low cost has its own costs: tradeoffs in quality and/or service. Example: You call a PC help desk and encounter a customer service tech half a world away who couldn’t speak English well enough to be understood.
Then there are the firms that negotiate the last nickel without regard to whether the lowest bidder can really deliver what it promised. Their rose-colored glasses blind them to the landscape littered with bankrupt suppliers from a variety of industries. How much does it cost (in time and money) to find another supplier?
Then there are the firms that figure that providing a statement of work (i.e. how things will be done) will ensure successful outcomes. Wrong. When you tell a business how you want it to run its business, you disrupt its processes and culture. Results = Ouch!
The common denominator in these too costly cost-cutting situations: Outsourcing becomes an “I win; you lose” transaction, not an “in it to win it” partnership. To create win-win, vested (I’d call it invested) outsourcing involves five partnership tenets:
1. “Focus on outcomes, not transactions.” Evaluate bids and bidders’ capabilities against a realistic cost of achieving desired outcomes (which includes the cost of not achieving them).
2. “Focus on the WHAT, not HOW.” Ask the bidder to include its statement of work on how it will produce the “what.” This type of due diligence will quickly identify real partners. There’s an added benefit: You’ll learn something from their processes.
3. “Agree on clearly defined and measurable outcomes.”
4. “Optimize pricing model incentives.’’ Pay-for-performance provides an incentive that benefits both firms.
5. “Governance structure provides insight, not merely oversight.” Sharing best practices and what doesn’t work usually shortens the outcome-achievement timeline — that saves time and money.
The bottom line: Relationships, not transactions, create real outsourcing solutions.
Jim Pawlak is a nationally syndicated book reviewer.
