The Best Books of 2005 for PR People
Charting the future of public relations
Holmes Report

The Best Books of 2005 for PR People

Holmes Report editor Paul Holmes picks the best business books of 2005 for PR people, from Aligning to Stars to All Marketers Are Liars to It Takes a CEO.

Paul Holmes

1. Aligning the Stars
by Jay Lorsch and Thomas Tierney

Lorsch (the Louis Kirstein professor of human relations at Harvard Business School) and Tierney (former chief executive of management consulting powerhouse Bain & Company) have produced a book on professional service firm management that deserves a place alongside the various works of David Maister on the desk of every public relations agency principal or partner.

The thesis is simple: “Outstanding firms are consistently able to identify, attract, and retain star performers,” say Lorsch and Tierney. “To get stars committed to their firm’s strategy; to manage stars across geographic distance, business lines and generations; to govern and lead so that both the organization and its stars prosper and feel rewarded.”

But executing against that philosophy is not so easy, and Lorsch and Tierney also provide an effective guide to the kind of culture, strategy and organization needed to build a world-class professional service firm based on an alignment of the stars.

“Proprietary strategy and sustainable competitive advantage are the two holy grails of business,” they say. But achieving either is rare indeed. Barring patent protection or monopolistic power—both of which are almost unheard of in the professional services world—most strategies can eventually be copied. Similarly, most competitive advantages are temporary. But professional service firms, the authors say, have a unique ability to build “powerful competitive advantages that can approach some level of sustainability.
“Because people are different, firms are different. Because groups of people behave differently, no two organizations are exactly alike. In these businesses, both financial success and sustainability rely on outstanding individuals, their client relationships and their behavior toward the firm.”

According to Lorsch and Tierney, stars are “the individuals who have the highest future value to the organization, the men and women in critical jobs whose performance is central to the company’s success. If a star leaves, the firm and its clients notice the difference. If enough stars leave, the firm’s financial performance suffers…. What makes stars “stars” is the fact that they propel the business model along all three of its dimensions: building enduring client relationships, consistently performing up to their full potential and putting the firm first, and implementing strategic imperatives.”

Not all stars are rainmakers, and not all rainmakers are stars. “What distinguishes the rainmakers who are stars from those who aren’t,” Lorsch and Tierney say, “is that the former not only strengthen their firm’s top line but also are sufficiently aligned with its goals and values to manage the way they behave with colleagues. To state it simply, they put the firm first.”

In fact, in Lorsch and Tierney’s view, there’s a role that is more important than rainmaking to a firm’s long-term success: starmaking, which they define as “an organization’s competency at attracting, retaining, developing, and motivating star talent…. Just as there are individual rainmakers, there are partners who become starmakers—people especially adept at building star capacity within a firm. They, and the firms they work for, understand the basic fact of life in professional services: the people you pay are more important over time than the people who pay you.”

So in great firms, the senior people worry as much about missing out on or losing new talent as much as they do about missing out on or losing good clients. So they devote as much time to recruiting and performance reviews as they do to account reviews.

Lorsch and Tierney believe that at any successful professional service firm, five core beliefs characterize the way the senior professionals thought about the firm and their relationship to it:
• Belief in partnership: “The conviction that senior stars are the owners of the firm, and that regardless of the legal form of ownership, it must be governed as a partnership.”
• Belief in extraordinary teams: “There’s always a temptation for team members to want to look good and advance their own careers to the detriment of their teammates,” but belief in teams “discourages that kind of behavior and send out a strong signal about how you should related to the people with whom you work every day on project teams.”
• Belief in community: “The proposition that at the end of the day we’re all part of one firm and we are expected to work together and help each other.”
• Belief in stars first/client first: “If you’re over-investing in your clients, you’ll lose your stars; but if you don’t meet your clients’ needs because of your stars’ desires, you won’t be competitive. The belief that both are equally important enables firm managers to work for a balance in meeting conflicting demands.”
• Belief in perpetuity: “A shared understanding, at senior level, that you and your peers are building a firm that will transcend degenerations, that you’re not only ‘in this together’ with your current partners, but also that part of your job is to help create a firm that will endure so future partners can succeed.”

2. Why Some Companies Emerge Stronger and Better From a Crisis
by Ian Mitroff

Ian Mitroff’s latest book, Why Some Companies Emerge Stronger and Better From a Crisis focuses the emotional and psychological (as opposed to operational) aspects of crisis management. There are long passages that will perhaps strike his more practically-minded readers as esoteric, but public relations people will find a handful of ideas to support the argument that PR should play a more central role in preparing for and responding to crises.

Mitroff begins by making the case that American corporations are more vulnerable to crises than ever before.

“America’s organizations and institutions,” he argues, “are in dire trouble on every conceivable front: physically, intellectually, morally, and spiritually. First their operations, plants, and infrastructure have been the objects of direct terrorist attacks and other serious criminal threats. Second, the intellectual foundations—that is the fundamental assumptions on which their crisis plans and procedures are built—have been seriously undermined, if not proven false, by recent events.

“Third, their moral compasses have been eroded by an unprecedented series of corporate scandals, such as Enron/Andersen, Martha Stewart, Tyco, and the like. And fourth, they have not only been oblivious of, but actually destructive with regard to, the spiritual needs of their employees and customers.”

He then quickly turns his attention to the state of crisis preparedness, which he obviously believes is inadequate, with a refreshing focus on building emotional and social capital within an organization—which implies a broader role for public relations professionals (especially those with internal communications roles) in corporate crisis management.

The bad news is that these skills are not the focus—not even a tangential focus—of the vast majority of crisis preparedness exercises or crisis simulations implemented by organizations today. In fact, Mitroff warns, crisis management is in danger of a “hostile takeover” by risk management and business continuity planning functions. “RM and BCP,” he says, “threaten to reduce CM to a series of structured exercises and checklists.”

Traditional risk management, he says, guides companies to prepare for crises that have both a high probability and a high potential cost. But in today’s world, the most damaging crises—9/11 is a case in point—would be considered low probability, and would not show up on the risk management radar.

Mitroff also urges crisis managers to “accept the fact that in today’s unrelenting 24/7/365 media-saturated world, there are no secrets any more; the media can find out anything they want to about anyone, any corporation, and so on; secret documents and private conversations are exposed regularly on the 6pm news and the front pages of major newspapers; if you do not accept this, then you will suffer an additional crisis—that is, the shock that comes from having all of one’s personal and company secrets paraded before the public for all to see.”

Finally, he believes companies need a department devoted to crisis leadership—a case he has made in previous books, but one that has not been taken up by many companies.

“An organization would be considered crazy if it did not have a finance department,” he says. “as well as a senior executive for finance. In the case of crisis leadership, however, we would be considered crazy if we thought such a department was necessary…. If today’s organizations are to respond effectively to the crises they face, then they will need a chief crisis officer.

“There is no longer any excuse for every organization’s not having a full-time senior executive in charge of the crisis capabilities of his or her organization.”

The chief crisis officer would have three responsibilities: to design a crisis portfolio, detailing the possible crises of every kind that could befall the company; to stay on the alert for signals that precede a crisis (news reports, consumer complaints, negative employee feedback on corporate values); and to create “real crisis capabilities rather than paper plans.”

Whether someone from a public relations background is the right person to lead a crisis center is perhaps arguable. But there’s no doubt that the input of a good public relations person—one who understands that listening to internal and external stakeholders is the most important part of his or her job—would be a tremendous asset.

3. Brand Hijack: Marketing Without Marketing
by Alex Wipperfürth

There’s a funeral director in Massachusetts who offers a special service to Harley-Davidson owners, giving Hog-lovers one last ride on a Harley-turned-hearse. There are couples so enamored of Krispy Kreme donuts that they have their wedding cakes made out of them. There’s a man who has set out to visit every Starbucks on the planet (around 4,000, and counting) the way some baseball fans plan to visit every Major League stadium. And in the wake of the 9-11 terrorist attacks, there were frequent flyers—a significant number of them, in fact—who sent cash donations to Southwest Airlines to help the company through what was a tough time for the travel industry.

There are brands that inspire the kind of loyalty and enthusiasm consumers normally reserve for their favorite sports teams, or—in rare cases—political or social affiliations. These brands differ from their competitors at a cellular level. There’s something in their DNA that can’t easily be replicated—which doesn’t stop marketers trying.

Alex Wipperfürth, author of Brand Hijack: Marketing Without Marketing, recalls a seminar on cause-related marketing at which he listened to Ben & Jerry’s founder Ben Cohen talk about his company’s mission. After Cohen’s speech, the general manager of Coca-Cola’s U.K. operations took mounted the podium “to lecture us on the karmic and psychedelic free spirit of Fruitopia, a drink that would make the world a better place.”

Says Wipperfürth, “Everyone in the audience knew right then that Fruitopia would fail. Its pseudo 60s hippie persona was simply too much of a stretch for the buttoned-up executives from the American south. Fruitopia was exposed as a corporate poseur before it even launched,” despite a valiant advertising campaign from Chiat/Day.

The lesson of all this, according to Wipperfürth: “Too often we try to borrow authenticity rather than earn it. Almost every youth brand wants to associate itself with ‘the urban market’ or ‘hip-hop culture.’ But only a few have done so genuinely and respectfully…. Other companies eager to be associated with black culture have come across as callous or insensitive. In their rush to capitalize on it, they reduce black culture to fashion, buzzwords, and trends—raising it for ‘everything but the burden.’”

As you might have gathered, Brand Hijack is a book that touches on some of the hot-button issues I’ve written about frequently over the past couple of years: the declining influence of traditional advertising and marketing; the need for constructive dialog between brands and their consumers; the value of authenticity; and—indirectly—a future in which public relations people can take a leadership role in the marketing mix.

It shares many of its best ideas with other books I have reviewed in this space, from The Cluetrain Manifesto to Al and Laura Ries’s The Fall of Advertising and the Rise of PR to Nicholas Ind’s The Living Brand. Brand Hijack supports many of the philosophies outlined in those books, but it brings a wealth of new material to the table, including several powerful case studies.

Wipperfürth starts with an explanation of what has changed, and why traditional marketing ideas are no longer enough to win consumers’ hearts—and may in some case be counterproductive. Increasingly, he says, consumers are ignoring corporate America’s overt advances.

“Marketing managers aren’t in charge any more,” he says. “Consumers are. Across the globe, millions of insightful, passionate, and creative people are helping optimize and endorse breakthrough products and services—sometimes without the companies’ buy-in.” That’s what Wipperfürth means by “brand hijacking” and he believes companies should embrace the trend—perhaps even find ways to encourage it.

“Brand hijacking is about allowing consumers (and other stakeholders) to shape brand meaning and endorse the brand to others. It’s a way to establish true loyalty, as opposed to mere retention. We’re not just talking about creating hype here. We’re talking about a new template for going to market. We’re talking about a complex orchestration of many carefully thought-out activities. And above all else, we’re talking about being willing to collaborate with a group of people you’re not used to collaborating with: consumers.”

Wipperfürth suggests several suggestions, some of which will be difficult for traditional marketers to accept. Among them:
• Let go of the fallacy that your brand belongs to you. It belongs to the market.
• Co-create your brand by collaborating with your consumers.
• Facilitate your most influential and passionate consumers in translating your brand’s message to a broader audience.
• Lose control. Free yourself to seize sudden opportunities that only last for moments.
• Resist the paranoid urge for consistency. Embrace the value of being surprising and imperfect.

“Conventional brands position themselves as providing certain benefits to their consumers,” says Wipperfürth. “Hijacked brands, on the other hand, offer consumers something much bigger—meaning within a broader cultural context. As a result, they play a far more inspirational role in people’s lives.”

And by doing so, they engender true loyalty. 

“The problem is that what most marketers think of as ‘loyalty’ is nothing of the sort—it is actually retention. And it’s not just a matter of semantics: retention is about consumer behavior; loyalty is an attitude.” So airline mileage programs can help with retention, but most of them do little to inspire true loyalty.

Says Wipperfürth, “People are not necessarily loyal to United or American Airlines; they are loyal to the free flights, earned perks, and increased status… In contrast, flyers demonstrate real loyalty to visionaries in the airline industry like Virgin Atlantic, Southwest and Jet Blue. These airlines don’t bribe consumers, but rather thrive on delivering a more pleasurable—or less expensive—travel experience.” 

4. All Marketers Are Liars
by Seth Godin

I can’t remember the last time the first few pages of a book made me as angry as the opening chapters of Seth Godin’s All Marketers Are Liars.

That doesn’t make All Marketers Are Liars a bad book. I appreciate the fact that Godin is trying to be provocative, that he challenges his readers—marketers and consumers alike—and that he addresses some big issues. And I found much to agree with, particularly the notion that the best marketing campaigns tell authentic, compelling stories.

The point of Godin’s book, it turns out, is not so much that marketers are liars, but that they are storytellers (on more than one occasionally, he uses these two terms interchangeably, as if storytelling and lying are equivalent). Moreover, they—the successful ones anyway—simply tell consumers the stories or lies those consumers want to believe.

Godin asks whether it matters that the $80,000 Porsche Cayenne and the $36,000 VW Touareg are “virtually the same vehicle, made in the same factory?” His conclusion: “The facts are irrelevant. In the short run, it doesn’t matter one bit whether something is actually better or faster or more efficient. What matters is what the consumer believes.”

To let Porsche off the hook, he comes up with a theory that shifts the blame to those being lied to. “Marketer’s aren’t liars,” he says. “They are just storytellers. It’s consumers who are liars. As consumers we lie to ourselves everyday…. Successful marketers are just the providers of stories that consumers choose to believe…. I think that once people find a remarkable lie that will benefit them if it spreads, they selfishly tell the lie to others, embellishing it along the way….

“A good story (either from the marketer of from the customer herself) is where genuine customer satisfaction comes from,” Godin writes. “It’s the source of growth and profit and it’s the future of your organization. Maybe who is lying to whom isn’t all that important, in the end, as long as the connection has been made and the story has been successfully told.”

That sounds like a dispiritingly amoral approach to marketing, and Godin seems to recognize as much, so he pays lip service to the notion that the best stories are “authentic.”

“Great stories are trusted. Trust is the scarcest resource we’ve got left. No one trusts anyone. Consumers don’t trust the beautiful women ordering vodka at the corner bar (they’re getting paid by the liquor company). Consumers don’t trust the spokespeople on commercials… and consumers don’t trust the companies that make pharmaceuticals. As a result, no marketer succeeds in telling a story unless he has earned the credibility to tell that story.”

Godin proposes a simple test for separating honest stories from deceitful ones. If consumers knew what the marketer knows, would they still choose to buy the product? And after the buy the product, will they be happy they believed the story, or will they feel ripped off. “The authenticity of a story,” he says, “determines whether it will survive scrutiny long enough for the consumer to tell the story to other people.” Obviously, Godin’s definition of authenticity differs slightly from my own.

His critique of traditional marketing—“Marketers can no longer use commercials to tell their stories. Instead they have to live them”—is not particularly original, but it ought to reinforce the analysis of marketing writers like Al and Laura Ries and Nicholas Ind.

“The biggest myth marketers believe,” he says, is that because they have the money they are in charge, they have control over the conversation, over you attention and over retailers. “You, the marketer, are not in charge. You are not in charge of attention or the conversations or even the stories you tell. Until marketers of all stripes realize this, marketing will never come near it potential to change things.”

Godin captures a truth when he says that in the post-advertising world, in which marketing requires companies to tell compelling stories, “everything an organization does supports the story. So everyone is in the marketing department.”

Similarly, some of Godin’s rules for telling great stories are right on the money.

“Great stories make a promise,” he says. “The promise is bold and audacious and not just very good—it’s exceptional or it’s not worth listening to….

“Great stories are subtle. Surprisingly, the less a marketer spells out, the more powerful the story becomes. Talented marketers understand that the prospect is ultimately telling himself the story, so allowing him (and the rest of the target audience) to draw his own conclusions is far more effective than just announcing the punch-line….

“Great stories are rarely aimed at everyone…  If you need to water down your story to appeal to everyone, it will appeal to no one. Runaway hits… take off because they match the worldview of a tiny audience—and then that tiny audience spreads the story.”

5. The Republican War on Science
by Chris Mooney

Chris Mooney, journalist and author of the recent best-seller The Republican War on Science, believes Americans are rejecting not only scientific findings but the very notion of science and reason as ways of understanding the world.

Science, says Mooney, is not a collection of facts and hypotheses, bur a process “for systematically pursuing knowledge about nature and, in the social sciences, ourselves. At its core, this process features the testing and retesting of hypotheses to ensure that they withstand the most withering scrutiny.”

While individual scientists can be as corrupt and self-serving and subjective as the next man, the scientific process tends to be self-correcting. Hypotheses offered by one scientist are immediately subjected to rigorous scrutiny by others; experimental results presented by one scientist will be duplicated or falsified by others.

Says Mooney, “Science isn’t infallible; it is only as good as we are…. Much of what we think we ‘know’ today may turn out to be wrong. But if it does, scientists stand the best chance of telling us so, thanks to the process of peer review, hypothesis testing, and internal criticism they use to check themselves. In other words, science still provides the best tool we have for understanding nature—a ‘candle in the dark,’ as Carl Sagan once put it.”

Mooney is convinced that exceptional change has taken place in the political culture over the past six years. But he traces a line of anti-science thought through history. In the 18th century, he says, conservative thinker Edmund Burke denounced the enlightenment as an age of “sophists, economists and calculators.” More recently, journalist Ron Susskind quoted a member of the Bush administration deriding “the reality-based community,” which he defined as people who “believe that solutions emerge from your judicious study of discernible reality. That’s not the way the world really works anymore. We’re an empire now, and when we act, we create our own reality.”

He’s particularly agitated about the phrase “sound science,” which he sees as a tool developed by business leaders and their political allies to stifle scientific discussion and belittle scientific consensus.

Says Mooney, “Much of the modern conservative agenda on science is embodied in the enigmatic phrase ‘sound science,’ a term used with increasing frequency these days despite its apparent lack of a clear, agreed-upon definition. In one sense, ‘sound science’ simply means ‘good science.’ Indeed, when unwitting liberals and journalists have been caught using the phrase—which happens quite frequently—it appears to have been with this meaning in mind.

“Conservatives, too, want people to hear ‘good science’ when they say ‘sound science.’ But there are reasons for thinking they actually mean something more by the term.” When used by corporations and their allies in the Bush administration, sound science “seems to mean requiring a high burden of proof before taking government action to protect public health and the environment.” In that regard, “sound science” is a term describing a policy-making philosophy, not a strict adherence to any scientific standard.

“Science politicization threatens not just our public health and the environment, but they very integrity of American democracy, which relies heavily on scientific and technical expertise to function,” says Christopher Mooney, author of The Republican War on Science. “At a time when more political choices than ever before hinge upon the scientific and technical competence of our elected leaders, the disregard for scientific consensus and expertise—and the substitution of ideological allegiance for careful assessment—can have disastrous consequences.”

There’s plenty of blame to go around, and Mooney takes shots at journalists too.

Says Mooney, “For journalists raised on objectivity and tempered by accusations of bias, knowing that phony balance can create distortion is one thing and taking steps to fix the reporting is another. Determining how much weight to give different sides in a scientific debate requires considerable expertise on the issue at hand. Few journalists have real scientific knowledge, and even reporters who know a great deal about certain scientific issues may know little about others they’re suddenly asked to cover.”

6. We the Media
By Dan Gillmor

Last year, the business community finally woke up to the power of blogs, citizen media, and grassroots journalism. Companies began to realize that what was said in the blogosphere could impact their reputation and their results. And they began to recognize the potential of corporate blogging as a communications tool that could build communities and enhance relationships with key stakeholders.

No one from the mainstream media did more to alert thought leaders to the power of citizen journalism that San Jose Mercury News technology columnist Dan Gillmor: one of the first reporters to launch his own blog and author of We the Media, which provided an in-depth look at a powerful force that is changing the relationship between institutions and citizens.

Gillmor rightly notes that “personal journalism is not a new invention. People have been stirring the pot since before the nation’s founding; one of the most prominent in America’s early history was Ben Franklin, whose Pennsylvania Gazette was civic-minded and occasionally controversial.” But for most of the past century, the flow of information has been controlled by corporate media.

Now grassroots journalists are dismantling corporate media’s monopoly on the news, transforming it from a lecture to a conversation.

“Readers (or viewers or listeners) collectively know more than media professionals do,” Gillmor writes. “This is true by definition: they are many, and we are often just one. We need to recognize and, in the best sense of the word, use their knowledge. If we don’t, our former audience will bolt when they realize they don’t have to settle for half-baked coverage; they can come into the kitchen themselves.”

He cites the credo of Oh Yeon Ho, the reformist founder of South Korea’s largest online paper, OhmyNews, to explain how this will impact traditional journalism: “Every citizen’s a reporter. Journalists aren’t some exotic species, they’re everyone who seeks to take new developments, put them into writing, and share them with others.”

And he castigates journalism for its lack of transparency: “We have been a black box, and have become only slightly more transparent in recent years.”

For journalists, he says, citizen media present both a threat and an opportunity. The same is true for business, and Gillmor clearly believes the smartest will seize the opportunity.

“Businesses have joined the conversation because blogs fill a gap,” he says. “A few years into the commercial Internet, companies discovered the value of email for marketing and customer support, not to
mention internal communication. Then came the plague of spam, which threatens email as a tool for external contacts.

Most corporate web sites, meanwhile, are like most annual reports: static, stiff, and turgid, with the most revealing information hidden in footnotes—sometimes to disguise the truth, not tell it—and led by a “Letter from the Chief Executive” (or vacuous mission statement) that appears to have been written by a committee of lawyers and marketing people.

“To the extent that even a business blog can bring information to the audience—internal or external—with more style than we tend to see on business web sites, enterprises will benefit. But what brings people back to personal weblogs is their individualized perspective.”

7. Soft Power
by Joseph Nye

There are two good reasons for public relations professionals to spend some time with Soft Power, Joseph Nye’s new book on the art of public diplomacy.

The first is that with America’s popularity in the world at an all-time low, successful public diplomacy is more necessary now than ever, and public relations professionals have an opportunity to contribute—to a better understanding of effective communications at home and to an enhanced image of America overseas.

The second, and perhaps less obvious, is that the “soft power” Nye discusses can be exercised by corporations and other large institutions as well as by governments, and many of his ideas have an application in the day to day lives of professional communicators, regardless of the organizations they represent.

Nye is dean of the Kennedy School of Government at Harvard University and a former chairman on the National Intelligence Council, and first coined the term “soft power” in Bound to Lead, a book published in 1990. Soft power, he says “is the ability to get what you want through attraction rather than coercion [hard power] or payments [economic power].”

Soft power arises from “the attractiveness of a country’s culture, political ideals and policies,” says Nye in his new book. “When our policies are seen as legitimate in the eyes of others, our soft power is enhanced…. But attraction can turn to repulsion if we act in an arrogant manner and destroy the real message of our deeper values.”

Nye devotes a considerable number of words early in the book defending the concept of soft power against those on the right who either consider any kind of outreach to those on the right a sign of weakness or believe that American propaganda needs to be as strident and as one-sided as the anti-American propaganda it must counter. “Power comes in many guises, and soft power is not a weakness. It is a form of power, and the failure to incorporate it into our national strategy is a serious mistake.”

Nye does not deny that America is now the world’s only military superpower. The invasion of Iraq, which he describes as “a dazzling display of America’s hard military power,” demonstrated how much the U.S. can achieve, even acting unilaterally. But on the economic front, American hegemony is much more questionable. The U.S. cannot obtain the outcomes it wants on trade or antitrust issues, for example, without the cooperation of the European Union or Japan.

And there are other issues—terrorism, international crime, climate change, the spread of infectious diseases—where broad international cooperation is essential to success and power is widely distributed. “It makes no sense at all to call this a unipolar world or American empire,” Nye says.

Soft power is also a useful concept for corporations and other large organizations, which will increasingly find soft power useful in attracting top caliber employees, winning political and regulatory battes (particularly at the community level) and attracting socially-conscious consumers. Companies seeking to exercise soft power will bring their policies and practices more closely into alignment with those of the societies in which they operate—creating a race to the top that could in the long-term produce more winners than the much-vaunted “race to the bottom” that sees corporations chasing the cheapest workforce and the lowest environmental standards.

“Information is power,” says Nye, “and today a much larger part of the world’s population has access to that power.” But “plenty of information leads to scarcity of attention. When people are overwhelmed with the volume of information confronting them, they have difficulty discerning what to focus on.” In such an environment, “those who can distinguish valuable information from background clutter gain power,” says Nye.

Unfortunately, the American government—again, like most American corporations—tends to invest what little it does spend on public diplomacy on the wrong things, usually choosing control of the message over credibility.

“Government broadcasting to other countries that is even-handed, open and informative helps to enhance American credibility and soft power in a way that propaganda never can,” says Nye. Dismissing efforts at U.S. propaganda aimed at countering the propaganda of our enemies—such as Defense Secretary Donald Rumsfeld’s proposed disinformation campaign, Nye writes, “Attraction depends on credibility, something a Pentagon propaganda campaign would clearly lack. On the contrary, by arousing broad suspicions about the credibility of what the American government says, such a program would squander soft power.”

8. Disney War
By James B Stewart

Many of the most gripping business books are also morality tales and James Stewart (author of Den of Thieves) found a tale of Shakesperian proportions when he turned his investigative talents of The Walt Disney Company under Michael Eisner, digging into the ego battles that pitted the CEO against Dreamworks founder Jeffrey Katzenberg and former Creative Artists super-agent Michael Ovitz and that ultimately led to a costly legal battle between Eisner and dissident shareholders led by Roy Disney, son of the company’s founder.

Stewart begins with Eisner’s early successes: rejuvenating Disney’s live-action movie franchise and theme parks, the producing some of the studio’s most successful animated hits, including The Lion King and Beauty and the Beast. He gives Eisner credit for his ability to spot creative talent and trends in the entertainment business, and for his “remarkable financial record.” When Eisner arrived in 1984, the company’s operating income was $100 million; by 2004 it was $4.5 billion. Adjusted for splits, the share price increased twenty-fold under his leadership.

But Stewart’s verdict on Eisner’s tenure contains some trenchant criticism. He details his feuds with Katzenberg and Ovitz, and with Apple’s Steve Jobs and the Weinstein brothers of Miramax, building a picture of the CEO as manipulative and Machiavellian. Ultimately, he says: “Eisner squandered Disney’s assets” and “committed personnel and judgment errors which... in the vitriol and publicity they generated, are without parallel in American business history.”

His epitaph for Eisner: “A familiar tragic character in Shakespeare… is the monarch whose power is such that he bends the truth itself to suit his will. Perhaps that accounts in some part for what is Eisner’s most glaring defect, the one quality more than any other that has caused him to leave behind a trail of deeply embittered former colleagues: his dishonesty.”

9. It Takes a CEO
By Leo Hindery

Leo Hindery, former chief executive of the YES Network, AT&T Broadband, and Tele-Communications, Inc., makes an impassioned plea for CEOs to provide a moral compass for the organizations they lead.

He doesn’t pull any punches. “A lot of today’s crop of CEOs are irresponsible or criminal or both,” he says. “Some of them—the Kozlowskis, Ebberses, Rigases, Lays, Skillings, and so on—have made headlines with their antics. But there are many more of them out there who are just hunkering down and hoping their shenanigans won’t turn into tomorrow’s headlines. And there’s a far bigger bunch who don’t have these kinds of skeletons in their closets but unfortunately have nothing to point to on the positive side of the ledger either.”

In reality, it’s not the crooks and liars who are the primary target of Hindery’s clarion call—which occasionally turns into a lecture. It’s the vast majority of CEOs who believe that shareholder value is their only mission. “As a CEO,” he says, “you succeed by defining your universe of stakeholders broadly. When you do, you arrive at better solutions, by anyone’s definitions you are fairer, and you avoid unnecessary battles (and approach the necessary ones better prepared.”

He is particularly critical of excessive CEO compensation, pointing out that the average CEO now makes more than 300 times as much as the average employee and arguing that a more even distribution of rewards is critical to long-term success. “You can’t lead if you don’t command the respect of your followers,” he says.

Other chapters deal with the concentration of media power and influence in the hands of five major companies; the trend toward offshoring and what can be done to make it fair; the role of the board of directors; and the Wal-Mart phenomenon. His style is friendly and familiar and often anecdotal, but his message is important.

10. Developing Knowledge-Based Client Relationships
By Ross Dawson

The second edition of Ross Dawson’s Developing Knowledge-Based Client Relationships is another must-read for public relations agency managers who want to move upstream, from commodity services to high-value, knowledge-based relationships with their clients.

“Knowledge and relationships are where almost all value resides in today’s economy,” says Dawson. “Together they are the only true sources of competitive advantage…. Being excellent in creating knowledge-based relationships… is a bedrock foundation for success as the pace of change in business accelerates.”

Understanding and implementing knowledge relationships is critical to professional service firms because “in today’s economy, the distinctions between commoditized offerings (which are driven by price and cost) and differentiated offerings (which are driven by greater value to the client) is becoming ever clearer and differentiation is ever more fleeting and tenuous as the undertow of commoditization pulls us down. The only way out of this trap is to engage in knowledge-based relationships, which not only create superior value for clients but also enable the development of deeply-entrenched relationships.”

Developing Knowledge-Based Client Relationships presents in a practical and pragmatic manner what knowledge organizations can do to enhance the value of the knowledge they deliver to clients and thus develop more profitable, longer-lasting relationships. There’s practical advice on adding value to information (“it becomes valuable when it becomes knowledge, the ability to do things better.”) and adding value to client decision-making.

There’s also an extremely interesting chapter on value-billing. “While billing by time spent is easy, convenient and relatively transparent to clients,” Dawson says, “it may have very little relation to the value to the client.” He goes on to explore alternatives from fixed fees and retainers to commissions to success fees, providing examples of professional services firms that have moved toward value-based pricing and explaining the benefits.

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