Columbia Business School Publishing

• Accounting for Value
  Author(s): Penman, Stephen
  Abstract:

  Accounting for Value teaches investors and analysts how to handle accounting in evaluating equity investments. The book's novel approach shows that valuation and accounting are much the same: valuation is actually a matter of accounting for value.

  Laying aside many of the tools of modern finance—the cost-of-capital, the CAPM, and discounted cash flow analysis—Stephen Penman returns to the common-sense principles that have long guided fundamental investing: price is what you pay but value is what you get; the risk in investing is the risk of paying too much; anchor on what you know rather than speculation; and beware of paying too much for speculative growth. Penman puts these ideas in touch with the quantification supplied by accounting, producing practical tools for the intelligent investor.

  Accounting for value provides protection from paying too much for a stock and clues the investor in to the likely return from buying growth. Strikingly, the analysis finesses the need to calculate a "cost-of-capital," which often frustrates the application of modern valuation techniques. Accounting for value recasts "value" versus "growth" investing and explains such curiosities as why earnings-to-price and book-to-price ratios predict stock returns. By the end of the book, Penman has the intelligent investor thinking like an intelligent accountant, better equipped to handle the bubbles and crashes of our time. For accounting regulators, Penman also prescribes a formula for intelligent accounting reform, engaging with such controversial issues as fair value accounting.

• Berkshire Beyond Buffett: The Enduring Value of Values
  Author(s): Cunningham, Lawrence A.
  Abstract:

  Berkshire Hathaway, the $300 billion conglomerate that Warren Buffett built, is among the world’s largest and most famous corporations. Yet, for all its power and celebrity, few people understand Berkshire, and many assume it cannot survive without Buffett. This book proves that assumption wrong.

  In a comprehensive portrait of the distinct corporate culture that unites and sustains Berkshire’s fifty direct subsidiaries, Lawrence A. Cunningham unearths the traits that assure the conglomerate’s perpetual prosperity. Riveting stories recount each subsidiary’s origins, triumphs, and journey to Berkshire and reveal the strategies managers use to generate economic value from intangible values, such as thrift, integrity, entrepreneurship, autonomy, and a sense of permanence.

  Rich with lessons for those wishing to profit from the Berkshire model, this engaging book is a valuable read for entrepreneurs, business owners, managers, and investors, and it makes an important resource for scholars of corporate stewardship. General readers will enjoy learning how an iconoclastic businessman transformed a struggling textile manufacturer into a corporate fortress destined to be his lasting legacy.

• Business Secrets of the Trappist Monks: One CEO's Quest for Meaning and Authenticity
  Author(s): Turak, August
  Keyword(s): Business; Corporate; cbsp
  Abstract:

  August Turak is a successful entrepreneur, corporate executive, and award-winning author who attributes much of his success to living and working alongside the Trappist monks of Mepkin Abbey for seventeen years. As a frequent monastic guest, he learned firsthand from the monks as they grew an incredibly successful portfolio of businesses.

  Service and selflessness are at the heart of the 1,500-year-old monastic tradition’s remarkable business success. It is an ancient though immensely relevant economic model that preserves what is positive and productive about capitalism while transcending its ethical limitations and internal contradictions. Combining vivid case studies from his thirty-year business career with intimate portraits of the monks at work, Turak shows how Trappist principles can be successfully applied to a variety of secular business settings and to our personal lives as well. He demonstrates that monks and people like Warren Buffett are wildly successful not despite their high principles but because of them. Turak also introduces other “transformational organizations” that share the crucial monastic business strategies so critical for success.

• Corporate Risk Management
  Author(s): Chew, Donald H., ed.
  Keyword(s): cbsp; Business; Economics
  Abstract:

  More than 30 leading scholars and finance practitioners discuss the theory and practice of using enterprise-risk management (ERM) to increase corporate values. ERM is the corporate-wide effort to manage the right-hand side of the balance sheet—a firm's total liability structure-in ways that enable management to make the most of the firm's assets. While typically working to stabilize cash flows, the primary aim of a well-designed risk management program is not to smooth corporate earnings, but to limit the possibility that surprise outcomes can threaten a company's ability to fund its major investments and carry out its strategic plan. Contributors summarize the development and use of risk management products and their practical applications. Case studies involve Merck, British Petroleum, the American airline industry, and United Grain Growers, and the conclusion addresses a variety of topics that include the pricing and use of certain derivative securities, hybrid debt, and catastrophe bonds.

  Contributors: Tom Aabo (Aarhus School of Business); Albéric Braas and Charles N. Bralver (Oliver, Wyman & Company); Keith C. Brown (University of Texas at Austin); David A. Carter (Oklahoma State University); Christopher L. Culp (University of Chicago); Neil A. Doherty (University of Pennsylvania); John R. S. Fraser (Hyrdo One, Inc.); Kenneth R. French (University of Chicago); Gerald D. Gay (Georgia State University); Jeremy Gold (Jeremy Gold Pensions); Scott E. Harrington (University of South Carolina); J. B. Heaton (Bartlit Beck Herman Palenchar & Scott LLP); Joel Houston (University of Florida); Nick Hudson (Stern Stewart & Co.); Christopher James (University of Florida); A. John Kearney and Judy C. Lewent (Merck & Co., Inc.); Robert C. Merton and Lisa K. Meulbroek (Harvard Business School); Merton H. Miller (University of Chicago); Jouahn Nam (Pace University); Andrea M. P. Neves (CP Risk Management LLC); Brian W. Nocco (Nationwide Insurance); André F. Perold (Harvard Business School); S. Waite Rawls III (Continental Bank); Kenneth J. Risko (Willis Risk Solutions); Angelika Schöchlin (University of St. Gallen); Betty J. Simkins (Oklahoma State University); Donald J. Smith (Boston University); Clifford W. Smith Jr. (University of Rochester); Charles W. Smithson (Continental Bank); René M. Stulz (Ohio State University);

  All the articles that comprise this book were first published in the Journal of Applied Corporate Finance. Morgan Stanley's ownership of the journal is a reflection of its commitment to identifying outstanding academic research and promoting its application in the practicing corporate and investment communities.

• Creative Strategy: A Guide for Innovation
  Author(s): Duggan, William
  Abstract:

  William Duggan’s 2007 book, Strategic Intuition, showed how innovation really happens in business and other fields and how that matches what modern neuroscience tells us about how creative ideas form in the human mind. In his new book, Creative Strategy, Duggan offers a step-by-step guide to help individuals and organizations put that same method to work for their own innovations.

  Duggan’s book solves the most important problem of how innovation actually happens. Other methods of creativity, strategy, and innovation explain how to research and analyze a situation, but they don’t guide toward the next step: developing a creative idea for what to do. Or they rely on the magic of “brainstorming”—just tossing out ideas. Instead, Duggan shows how creative strategy follows the natural three-step method of the human brain: breaking down a problem into parts and then searching for past examples to create a new combination to solve the problem. That’s how innovation really happens.

  Duggan explains how to follow these three steps to innovate in business and any other field as an individual, a team, or a whole company. The crucial middle step—the search for past examples—takes readers beyond their own brain to a “what-works scan” of what others have done within and outside of the company, industry, and country. It is a global search for good ideas to combine as a new innovation. Duggan illustrates creative strategy through real-world cases of innovation that use the same method: from Netflix to Edison, from Google to Henry Ford. He also shows how to integrate creative strategy into other methods you might currently use, such as Porter’s Five Forces or Design Thinking. Creative Strategy takes the mystery out of innovation and puts it within your grasp.

• Designing for Growth: A Design Thinking ToolKit for Managers
  Author(s): Liedtka, Jeanne; Ogilvie, Tim
  Abstract:

  Jeanne Liedtka and Tim Ogilvie educate readers in one of the hottest trends in business: “design thinking,” or the ability to turn abstract ideas into practical applications for maximal business growth. Liedtka and Ogilvie cover the mind-set, techniques, and vocabulary of design thinking, unpack the mysterious connection between design and growth, and teach managers in a straightforward way how to exploit design’s exciting potential.

  Exemplified by Apple and the success of its elegant products and cultivated by high-profile design firms such as IDEO, design thinking unlocks creative right-brain capabilities to solve a range of problems. This approach has become a necessary component of successful business practice, helping managers turn abstract concepts into everyday tools that grow business while minimizing risk.

  Jeanne Liedtka is a professor at the Darden Graduate School of Business Administration, University of Virginia. Formerly the executive director of its Batten Institute, a foundation established to develop thought leadership in the fields of entrepreneurship and corporate innovation, she has also served as chief learning officer for the United Technologies Corporation (UTC) and as associate dean of the MBA program at Darden.

  Tim Ogilvie is CEO of Peer Insight, an innovation strategy consultancy, where he has pioneered contributions to the emerging disciplines of service innovation, customer experience design, and business model exploration. His clients include AARP, Bank of America, Diebold, GE, Hallmark, Hewlett-Packard, Procter & Gamble, Starwood Hotels, and The Hartford.

• How Finance Is Shaping the Economies of China, Japan, and Korea
  Author(s): Park; Yung Chul; Patrick, Hugh
  Keyword(s): Business; Government; East Asian Studies; Economics
  Abstract:

  This volume connects the evolving modern financial systems of China, Japan, and Korea to the development and growth of their economies through the first decade of the twenty-first century. It also identifies the commonalities among all three systems while accounting for their social, political, and institutional differences.

  Essays consider the reforms of the Chinese economy since 1978, the underwhelming performance of the Japanese economy since about 1990, and the growth of the Korean economy over the past three decades. These economies engaged in rapid catch-up growth processes and share similar economic structures. Yet while domestic forces have driven each country’s financial trajectory, international short-term financial flows have presented opportunities and challenges for them all. The nature and role of the financial system in generating real economic growth, though nuanced and complex, is integral to these countries. The result is a fascinating spectrum of experiences with powerful takeaways.

• Interest Rate Swaps and Other Derivatives
  Author(s): Corb, Howard
  Abstract:

  The first swap was executed over thirty years ago. Since then, the interest rate swaps and other derivative markets have grown and diversified in phenomenal directions. Derivatives are used today by a myriad of institutional investors for the purposes of risk management, expressing a view on the market, and pursuing market opportunities that are otherwise unavailable using more traditional financial instruments. In this volume, Howard Corb explores the concepts behind interest rate swaps and the many derivatives that evolved from them.

  Corb’s book uniquely marries academic rigor and real-world trading experience in a compelling, readable style. While it is filled with sophisticated formulas and analysis, the volume is geared toward a wide range of readers searching for an in-depth understanding of these markets. It serves as both a textbook for students and a must-have reference book for practitioners. Corb helps readers develop an intuitive feel for these products and their use in the market, providing a detailed introduction to more complicated trades and structures. Through examples of financial structuring, readers will come away with an understanding of how derivatives products are created and how they can be deconstructed and analyzed effectively.

• Investing: The Last Liberal Art, Second Edition
  Author(s): Hagstrom, Robert G.
  Abstract:

  Robert G. Hagstrom is one of the best-known authors of investment books for general audiences. Turning his extensive experience as a portfolio manager at Legg Mason Capital Management into valuable guidance for professionals and nonprofessionals alike, he is the author of six successful books on investment, including The Warren Buffett Way, a New York Times best-seller that has sold more than a million copies.

  In this updated second edition of Investing: The Last Liberal Art, Hagstrom explores basic and fundamental investing concepts in a range of fields outside of economics, including physics, biology, sociology, psychology, philosophy, and literature. He discusses, for instance, how the theory of evolution disrupts the notion of the efficient market and how reading strategies for literature can be gainfully applied to investing research. Building on Charlie Munger’s famous “latticework of mental models” concept, Hagstrom argues that it is impossible to make good investment decisions based solely on a strong knowledge of finance theory alone. He reinforces his concepts with additional data and a new chapter on mathematics, and updates his text throughout to reflect the developments of the past decade, particularly the seismic economic upheaval of 2008. He has also added a hundred new titles to the invaluable reading list concluding the book.

• Learn or Die: Using Science to Build a Leading-Edge Learning Organization
  Author(s): Hess, Edward D.
  Abstract:

  To compete with today’s increasing globalization and rapidly evolving technologies, individuals and organizations must take their ability to learn—the foundation for continuous improvement, operational excellence, and innovation—to a much higher level. In Learn or Die, Edward D. Hess combines recent advances in neuroscience, psychology, behavioral economics, and education with key research on high-performance businesses to create an actionable blueprint for becoming a leading-edge learning organization.

  Learn or Die examines the process of learning from an individual and an organizational standpoint. From an individual perspective, the book discusses the cognitive, emotional, motivational, attitudinal, and behavioral factors that promote better learning. Organizationally, Learn or Die focuses on the kinds of structures, culture, leadership, employee learning behaviors, and human resource policies that are necessary to create an environment that enables critical and innovative thinking, learning conversations, and collaboration. The volume also provides strategies to mitigate the reality that humans can be reflexive, lazy thinkers who seek confirmation of what they believe to be true and affirmation of their self-image. Exemplar learning organizations discussed include the secretive Bridgewater Associates, LP; Intuit, Inc.; United Parcel Service (UPS); W. L. Gore & Associates; and IDEO.

• More Than You Know: Finding Financial Wisdom in Unconventional Places (Updated and Expanded)
  Author(s): Mauboussin, Michael J.
  Keyword(s): cbsp; Business; Economics
  Abstract:

  Since its first publication, Michael J. Mauboussin's popular guide to wise investing has been translated into eight languages and has been named best business book by BusinessWeek and best economics book by Strategy+Business. Now updated to reflect current research and expanded to include new chapters on investment philosophy, psychology, and strategy and science as they pertain to money management, this volume is more than ever the best chance to know more than the average investor.

  Offering invaluable tools to better understand the concepts of choice and risk, More Than You Know is a unique blend of practical advice and sound theory, sampling from a wide variety of sources and disciplines. Mauboussin builds on the ideas of visionaries, including Warren Buffett and E. O. Wilson, but also finds wisdom in a broad and deep range of fields, such as casino gambling, horse racing, psychology, and evolutionary biology. He analyzes the strategies of poker experts David Sklansky and Puggy Pearson and pinpoints parallels between mate selection in guppies and stock market booms. For this edition, Mauboussin includes fresh thoughts on human cognition, management assessment, game theory, the role of intuition, and the mechanisms driving the market's mood swings, and explains what these topics tell us about smart investing.

  More Than You Know is written with the professional investor in mind but extends far beyond the world of economics and finance. Mauboussin groups his essays into four parts-Investment Philosophy, Psychology of Investing, Innovation and Competitive Strategy, and Science and Complexity Theory-and he includes substantial references for further reading. A true eye-opener, More Than You Know shows how a multidisciplinary approach that pays close attention to process and the psychology of decision making offers the best chance for long-term financial results.

• Pandora’s Risk: Uncertainty at the Core of Finance
  Author(s): Osband, Kent
  Keyword(s): Banking; Economics; cbsp; Business
  Abstract:

  Author of the acclaimed work Iceberg Risk: An Adventure in Portfolio Theory, Kent Osband argues that uncertainty is central rather than marginal to finance. Markets don't trade mainly on changes in risk. They trade on changes in beliefs about risk. In the process, markets unite, stretch, and occasionally defy beliefs.

  Recognizing this would make a world of difference in investing. Belittling uncertainty has driven a rift between financial theory and practice and within finance theory itself. It has misguided regulation. It has stoked the greatest financial imbalances in world history.

  Hoping to spark a revolution in the mindset of the investment professional, Osband recasts the market as a learning machine rather than a knowledge machine. The market continually errs, corrects itself, and makes new errors. Respecting that process without idolizing it will lead to wiser investment, trading, and regulation. With uncertainty embedded at its core, Osband's rational approach points to a finance theory worthy of twenty-first-century investing.

• Passion for Reality: The Extraordinary Life of the Investing Pioneer Paul Cabot
  Author(s): Yogg, Michael R.
  Abstract:

  Paul Cabot (1898–1994) was an innovative mutual fund manager and executive known for his strong character, charismatic personality, and trendsetting financial achievements. Iconoclastic and rebellious, Cabot broke free from the Boston Brahmin trustee mold to pursue new ways of investing and serving investment clients.

  Cabot founded one of the first mutual funds—State Street Investment Corporation—in the early 1920s, campaigned against the corrupt practices of certain other funds in the late 1920s, and lobbied on behalf of key New Deal securities legislation in the 1930s. As Harvard University treasurer, he increased the allocation of the endowment to equities just in time for the bull market of the 1950s, and as a corporate director in the 1960s he campaigned against conglomerates’ abusive takeover strategies.

  Having spent nearly two decades working for Cabot’s company, State Street Research & Management, as an analyst, research director, portfolio manager, and chief investment officer, Michael R. Yogg is well positioned to share the secrets behind Cabot’s extraordinary success and relate the life of an extraordinary man. Cabot pioneered the use of fundamental stock analysis and was likely the first to take up the progressive practice of interviewing company managements. His accomplishments all stemmed from his passion for facts, finance, and creative thinking, as well as his unbreakable will, facets Yogg illuminates through privileged access to Cabot’s papers and a wealth of interviews.

• Smart Growth: Building an Enduring Business by Managing the Risks of Growth
  Author(s): Hess, Edward D.
  Keyword(s): cbsp; Business; Economics
  Abstract:

  Wall Street believes that all public companies should grow smoothly and continuously, as evidenced by ever-increasing quarterly earnings, and that all companies either "grow or die." Introducing a research-based growth model called "Smart Growth," Edward D. Hess challenges this ethos and its dangerous mentality, which often deters real growth and pressures businesses to create, manufacture, and purchase noncore earnings just to appease Wall Street.

  Smart Growth accounts for the complexity of growth from the perspective of organization, process, change, leadership, cognition, risk management, employee engagement, and human dynamics. Authentic growth is much more than a strategy or a desired result. It is a process characterized by complex change, entrepreneurial action, experimental learning, and the management of risk. Hess draws on extensive public and private company research, incorporating case studies of Best Buy, Sysco, UPS, Costco, Starbucks, McDonalds, Coca Cola, Room & Board, Home Depot, Tiffany & Company, P&G, and Jet Blue. With conceptual innovations such as an Authentic Earnings and Growth System framework, a seven-step growth funnel pipeline, a Growth Decision Template, and a Growth Risks Audit, Hess provides a blueprint for an enduring business that strives to be better, rather than simply bigger.

• Smart Machines: IBM’s Watson and the Era of Cognitive Computing
  Author(s): Kelly, John E. III; Hamm, Steve
  Keyword(s): Business; Corporate; cbsp
  Abstract:

  We are crossing a new frontier in the evolution of computing and entering the era of cognitive systems. The victory of IBM’s Watson on the television quiz show Jeopardy! revealed how scientists and engineers at IBM and elsewhere are pushing the boundaries of science and technology to create machines that sense, learn, reason, and interact with people in new ways to provide insight and advice.

  In Smart Machines, John E. Kelly III, director of IBM Research, and Steve Hamm, a writer at IBM and a former business and technology journalist, introduce the fascinating world of “cognitive systems” to general audiences and provide a window into the future of computing. Cognitive systems promise to penetrate complexity and assist people and organizations in better decision making. They can help doctors evaluate and treat patients, augment the ways we see, anticipate major weather events, and contribute to smarter urban planning. Kelly and Hamm’s comprehensive perspective describes this technology inside and out and explains how it will help us conquer the harnessing and understanding of “big data,” one of the major computing challenges facing businesses and governments in the coming decades. Absorbing and impassioned, their book will inspire governments, academics, and the global tech industry to work together to power this exciting wave in innovation.

• Solving Problems with Design Thinking: Ten Stories of What Works
  Author(s): Liedtka, Jeanne; King, Andrew; Bennett, Kevin
  Keyword(s): Business; Corporate; workplace; cbsp
  Abstract:

  Design-oriented firms such as Apple and IDEO have demonstrated how design thinking can directly affect business results. Yet most managers lack a real sense of how to put this new approach to use for issues other than product development and sales growth. Solving Problems with Design Thinking details ten real-world examples of managers who successfully applied design methods at 3M, Toyota, IBM, Intuit, and SAP; entrepreneurial start-ups such as MeYou Health; and government and social sector organizations including the City of Dublin and Denmark’s The Good Kitchen.

  Using design skills such as ethnography, visualization, storytelling, and experimentation, these managers produced innovative solutions to problems concerning strategy implementation, sales force support, internal process redesign, feeding the elderly, engaging citizens, and the trade show experience. Here they elaborate on the challenges they faced and the processes and tools they used, offering their personal perspectives and providing a clear path to implementation based on the principles and practices laid out in Jeanne Liedtka and Tim Ogilvie’s Designing for Growth: A Design Thinking Tool Kit for Managers.

• Speculation, Trading, and Bubbles
  Author(s): Scheinkman, José A
  Abstract:

  As long as there have been financial markets, there have been bubbles—those moments in which asset prices inflate far beyond their intrinsic value, often with ruinous results. Yet economists are slow to agree on the underlying forces behind these events. In this book José A. Scheinkman offers new insight into the mystery of bubbles. Noting some general characteristics of bubbles—such as the rise in trading volume and the coincidence between increases in supply and bubble implosions—Scheinkman offers a model, based on differences in beliefs among investors, that explains these observations.

  Other top economists also offer their own thoughts on the issue: Sanford J. Grossman and Patrick Bolton expand on Scheinkman’s discussion by looking at factors that contribute to bubbles—such as excessive leverage, overconfidence, mania, and panic in speculative markets—and Kenneth J. Arrow and Joseph E. Stiglitz contextualize Scheinkman’s findings.

• Stalking the Black Swan: Research and Decision Making in a World of Extreme Volatility
  Author(s): Posner, Kenneth A.
  Keyword(s): cbsp; Business; Investments
  Abstract:

  Kenneth A. Posner spent close to two decades as a Wall Street analyst, tracking the so-called "specialty finance" sector, which included controversial companies such as Countrywide, Fannie Mae, Freddie Mac, CIT, and MasterCard—many of which were caught in the subprime mortgage and capital markets crisis of 2007. While extreme volatility is nothing new in finance, the recent downturn caught many off guard, indicating that the traditional approach to decision making had let them down. Introducing a new framework for handling and evaluating extreme risk, Posner draws on years of experience to show how decision makers can best cope with the "Black Swans" of our time.

  Posner's shrewd assessment combines the classic fundamental research approach of Benjamin Graham and David Dodd with more recent developments in cognitive science, computational theory, and quantitative finance. He outlines a probabilistic approach to decision making that involves forecasting across a range of scenarios, and he explains how to balance confidence, react accurately to fast-breaking information, overcome information overload, zero in on the critical issues, penetrate the information asymmetry shielding corporate executives, and integrate the power of human intuition with sophisticated analytics. Emphasizing the computational resources we already have at our disposal—our computers and our minds—Posner offers a new track to decision making for analysts, investors, traders, corporate executives, risk managers, regulators, policymakers, journalists, and anyone who faces a world of extreme volatility.

• Strategic Intuition: The Creative Spark in Human Achievement
  Author(s): Duggan, William
  Keyword(s): cbsp; Business; Economics
  Abstract:

  How "Aha!" really happens.

  When do you get your best ideas? You probably answer "At night," or "In the shower," or "Stuck in traffic." You get a flash of insight. Things come together in your mind. You connect the dots. You say to yourself, "Aha! I see what to do." Brain science now reveals how these flashes of insight happen. It's a special form of intuition. We call it strategic intuition, because it gives you an idea for action-a strategy.

  Brain science tells us there are three kinds of intuition: ordinary, expert, and strategic. Ordinary intuition is just a feeling, a gut instinct. Expert intuition is snap judgments, when you instantly recognize something familiar, the way a tennis pro knows where the ball will go from the arc and speed of the opponent's racket. (Malcolm Gladwell wrote about this kind of intuition in Blink.) The third kind, strategic intuition, is not a vague feeling, like ordinary intuition. Strategic intuition is a clear thought. And it's not fast, like expert intuition. It's slow. That flash of insight you had last night might solve a problem that's been on your mind for a month. And it doesn't happen in familiar situations, like a tennis match. Strategic intuition works in new situations. That's when you need it most.

  Everyone knows you need creative thinking, or entrepreneurial thinking, or innovative thinking, or strategic thinking to succeed in the modern world. All these kinds of thinking happen through flashes of insight—strategic intuition. And now that we know how it works, you can learn to do it better. That's what this book is about.

  Over the past ten years, William Duggan has conducted pioneering research on strategic intuition and for the past three years has taught a popular course at Columbia Business School on the subject. He now gives us this eye-opening book that shows how strategic intuition lies at the heart of great achievements throughout human history: the scientific and computer revolutions, women's suffrage, the civil rights movement, modern art, microfinance in poor countries, and more. Considering the achievements of people and organizations, from Bill Gates to Google, Copernicus to Martin Luther King, Picasso to Patton, you'll never think the same way about strategy again.

  Three kinds of strategic ideas apply to human achievement: * Strategic analysis, where you study the situation you face. * Strategic intuition, where you get a creative idea for what to do. * Strategic planning, where you work out the details of how to do it.

  There is no shortage of books about strategic analysis and strategic planning. This new book by William Duggan is the first full treatment of strategic intuition. It's the missing piece of the strategy puzzle that makes essential reading for anyone interested in achieving more in any field of human endeavor.

• The Aid Trap: Hard Truths About Ending Poverty
  Author(s): Hubbard, R. Glenn, and William Duggan
  Keyword(s): cbsp; International Affairs; Business; Economics
  Abstract:

  Over the past twenty years more citizens in China and India have raised themselves out of poverty than anywhere else at any time in history. They accomplished this through the local business sector—the leading source of prosperity for all rich countries. In most of Africa and other poor regions the business sector is weak, but foreign aid continues to fund government and NGOs. Switching aid to the local business sector in order to cultivate a middle class is the oldest, surest, and only way to eliminate poverty in poor countries.

  A bold fusion of ethics and smart business, The Aid Trap shows how the same energy, goodwill, and money that we devote to charity can help local business thrive. R. Glenn Hubbard and William Duggan, two leading scholars in business and finance, demonstrate that by diverting a major share of charitable aid into the local business sector of poor countries, citizens can take the lead in the growth of their own economies. Although the aid system supports noble goals, a local well-digging company cannot compete with a foreign charity that digs wells for free. By investing in that local company a sustainable system of development can take root.

• The CEO's Boss: Tough Love in the Boardroom
  Author(s): Klepper, William M.
  Keyword(s): cbsp; Business; workplace
  Abstract:

  In order to avoid another Enron, WorldCom, or Tyco, company directors have assumed a bold and independent role in the boardroom, monitoring the actions and day-to-day operations of the CEO. This dramatic shift has created a new dynamic, one that requires careful negotiation from both parties to get the job done. Giving directors, executives, investors, and stakeholders the tools to make this relationship work, William M. Klepper describes the best techniques for building a productive partnership and establishing a plan of action for a variety of businesses and settings.

  Klepper, an executive educator, has worked with AT&T, Bausch & Lomb, Johnson & Johnson, Sony, Sun Microsystems, and a host of other corporations. He knows what makes a healthy partnership between a board and its CEO and the consequences of a bad fit. In this book, he details the eight practices of successful executives, such as facilitating innovation, motivating change, and developing leadership skills, and he explains what directors need to evaluate, such as working style, social behavior, and the handling of stress, before they commit to hiring a CEO.

  The most critical element is the social contract, in which directors and their CEOs agree to be transparent, continually reassess their company's risk, maintain core company values, and make a commitment to their stakeholders. These include employees, shareholders, customers, and the community. In this essential volume, Klepper encourages directors to embrace their independence, and he teaches executives to value tough love.

• The Designing for Growth Field Book
  Author(s): Liedtka, Jeanne; Ogilvie, Tim; Brozenske, Rachel
  Abstract:

  In Designing for Growth: A Design Thinking Tool Kit for Managers (D4G), Jeanne Liedtka and Tim Ogilvie showed how design can boost innovation and drive growth. In this companion guide, also suitable as a stand-alone project workbook, the authors provide a step-by-step framework for applying the D4G toolkit and process to a particular project, systematically explaining how to address the four key questions of their design thinking approach.

  The field book maps the flow of the design process within the context of a specific project and reminds readers of key D4G takeaways as they work. The text helps readers identify an opportunity, draft a design brief, conduct research, establish design criteria, brainstorm, develop concepts, create napkin pitches, make prototypes, solicit feedback from stakeholders, and run learning launches. The workbook demystifies tools that have traditionally been the domain of designers—from direct observation to journey mapping, storytelling, and storyboarding—that power the design thinking process and help businesses align around a project to realize its full potential.

• The Most Important Thing Illuminated: Uncommon Sense for the Thoughtful Investor
  Author(s): Marks, Howard
  Abstract:

  Howard Marks’s The Most Important Thing distilled the investing insight of his celebrated client memos into a single volume and, for the first time, made his time-tested philosophy available to general readers. In this edition, Marks’s wisdom is joined by the comments, insights, and counterpoints of four renowned investors and investment educators: Christopher C. Davis (Davis Funds), Joel Greenblatt (Gotham Capital), Paul Johnson (Nicusa Capital), and Seth A. Klarman (Baupost Group).

  These experts lend insight into such concepts as “second-level thinking,” the price/value relationship, patient opportunism, and defensive investing. Marks also adds his own annotations, expanding on his book’s original themes and issues. A new chapter addresses the importance of reasonable expectations, and a foreword by Bruce C. Greenwald, called “a guru to Wall Street’s gurus” by the New York Times, speaks on value investing, productivity, and the economics of information.

  ***

  Howard Marks, the chairman and cofounder of Oaktree Capital Management, is renowned for his insightful assessments of market opportunity and risk. After four decades spent ascending to the top of the investment management profession, he is today sought out by the world's leading value investors, and his client memos brim with insightful commentary and a time-tested, fundamental philosophy. Now for the first time, all readers can benefit from Marks's wisdom, concentrated into a single volume that speaks to both the amateur and seasoned investor.

  Informed by a lifetime of experience and study, The Most Important Thing explains the keys to successful investment and the pitfalls that can destroy capital or ruin a career. Utilizing passages from his memos to illustrate his ideas, Marks teaches by example, detailing the development of an investment philosophy that fully acknowledges the complexities of investing and the perils of the financial world. Brilliantly applying insight to today's volatile markets, Marks offers a volume that is part memoir, part creed, with a number of broad takeaways.

  Marks expounds on such concepts as "second-level thinking," the price/value relationship, patient opportunism, and defensive investing. Frankly and honestly assessing his own decisions--and occasional missteps--he provides valuable lessons for critical thinking, risk assessment, and investment strategy. Encouraging investors to be "contrarian," Marks wisely judges market cycles and achieves returns through aggressive yet measured action. Which element is the most essential? Successful investing requires thoughtful attention to many separate aspects, and each of Marks's subjects proves to be the most important thing.

• The Most Important Thing: Uncommon Sense for the Thoughtful Investor
  Author(s): Marks, Howard
  Keyword(s): Business; Economics; cbsp
  Abstract:

  “This is that rarity, a useful book.”--Warren Buffett

  Howard Marks, the chairman and cofounder of Oaktree Capital Management, is renowned for his insightful assessments of market opportunity and risk. After four decades spent ascending to the top of the investment management profession, he is today sought out by the world's leading value investors, and his client memos brim with insightful commentary and a time-tested, fundamental philosophy. Now for the first time, all readers can benefit from Marks's wisdom, concentrated into a single volume that speaks to both the amateur and seasoned investor.

  Informed by a lifetime of experience and study, The Most Important Thing explains the keys to successful investment and the pitfalls that can destroy capital or ruin a career. Utilizing passages from his memos to illustrate his ideas, Marks teaches by example, detailing the development of an investment philosophy that fully acknowledges the complexities of investing and the perils of the financial world. Brilliantly applying insight to today's volatile markets, Marks offers a volume that is part memoir, part creed, with a number of broad takeaways.

  Marks expounds on such concepts as "second-level thinking," the price/value relationship, patient opportunism, and defensive investing. Frankly and honestly assessing his own decisions—and occasional missteps—he provides valuable lessons for critical thinking, risk assessment, and investment strategy. Encouraging investors to be "contrarian," Marks wisely judges market cycles and achieves returns through aggressive yet measured action. Which element is the most essential? Successful investing requires thoughtful attention to many separate aspects, and each of Marks's subjects proves to be the most important thing.

• The Mutual Fund Industry: Competition and Investor Welfare
  Author(s): Hubbard, R. Glenn, Michael F. Koehn, Stanley I. Ornstein, Marc Van Audenrode, and Jimmy Royer
  Keyword(s): cbsp; Economics; Law; Business; Banking
  Abstract:

  Mutual funds form the bedrock of retirement savings in the United States, and, considering their rapid growth, are sure to be more critical in the future. Because the size of fees paid by investors to mutual fund advisers can strongly affect the return on investment, these fees have become a contentious issue in Congress and the courts, with many arguing that investment advisers grow rich at the expense of investors.

  This ground-breaking book not only conceptualizes a new economic model of the mutual fund industry, but also uses this model to test for price competition between investment advisers, evaluating the assertion that market forces fail to protect investors' returns from excessive fees. Highly experienced authors track the growth of the industry over the past twenty-five years and present arguments and evidence both for and against theories of adviser malfeasance. The authors review the regulatory history of mutual fund fees and summarize leading case decisions addressing excessive fees

  Revealing the extent to which the governance structure of mutual funds truly impacts fund performance, this book provides the best understanding of today's mutual fund industry and is a vital tool for investors, money managers, fund directors, securities lawyers, economists, and anyone concerned with the regulation of mutual funds.

• The Nature of Value: How to Invest in the Adaptive Economy
  Author(s): Gogerty, Nick
  Abstract:

  Using evolution as the template to understand growth, The Nature of Value takes a first-principles approach to explore the parallels between economic and ecological systems. Not only does Gogerty show how value is born out of tiny sparks of adaptive innovation, but he also explores the full scope of the economy as a complex network. He borrows from an array of disciplines—including anthropology, psychology, ecology, physics, sociology, and ethics—and, most revealing of all, examines how evolution’s processes can help investors avoid risk and improve their allocation decisions.

  Starting with a look at how innovation creates value for firms, Gogerty considers the economic niches where companies compete and explores how they can create defensive moats to enhance their ability to survive. Throughout the book, Gogerty demonstrates how this ecological understanding of the economy can help allocators improve their performance, supporting his arguments with extensive data and years of practitioner experience from scientific, social, and economic disciplines. Gogerty’s practical takeaways, couched in vivid explanations and accompanied by intuitive illustrations, help investors of all backgrounds gain fresh insight into the behavior of corporations and the economy in general.

• The New Ecology of Leadership: Business Mastery in a Chaotic World
  Author(s): Hurst, David K.
  Abstract:

  David Hurst has a unique knowledge of organizations—their function and their failure—both in theory and in practice. He has spent twenty-five years as an operating manager, often in crises and turnaround conditions, and is also a widely experienced consultant, teacher, and writer on business. This book is his innovative integration of management practice and theory, using a systems perspective and analogies drawn from nature to illustrate groundbreaking ideas and their practical application. It is designed for readers unfamiliar with sophisticated management concepts and for active practitioners seeking to advance their management and leadership skills.

  Hurst’s objective is to help readers make meaning from their own management experience and education, and to encourage improvement in their practical judgment and wisdom. His approach takes an expansive view of organizations, connecting their development to humankind’s evolutionary heritage and cultural history. It locates the origins of organizations in communities of trust and follows their development and maturation. He also crucially tracks the decline of organizations as they age and shows how their strengths become weaknesses in changing circumstances.

  Hurst’s core argument is that the human mind is rational in an ecological, rather than a logical, sense. In other words, it has evolved to extract cues to action from the specific situations in which it finds itself. Therefore contexts matter, and Hurst shows how passion, reason, and power can be used to change and sustain organizations for good and ill. The result is an inspirational synthesis of management theory and practice that will resonate with every reader’s experience.

• The Origins of Business, Money, and Markets
  Author(s): Roberts, Keith
  Keyword(s): Business; Economics; cbsp
  Abstract:

  Understanding the origins of business is fundamental to grasping modern life, yet most historians look only to the nineteenth century to build their narratives. While the industrial revolution profoundly remade business practice and established much of the corporate organization we recognize today, the sweep of business history actually begins much earlier, with the initial cities of Mesopotamia. Traveling back to this society of ancient traders and consumers, Keith Roberts recasts the rise of modern business, exposing the flaws inherent in dominant histories and the parallels between early and modern business practice.

   

  Roberts's fascinating narrative begins five thousand years ago in the Middle East. Explaining why prehistoric tribes had no "business," he describes the lack of material conditions and conceptual framework that made such an interchange impossible. Roberts then locates the origins of business in the long distance trade of ancient Mesopotamia, especially through slave trading, retailing, and financing, and maps the rise of modern models of currency, markets, and business in Greece, along with the emergence of banking, mercenaries, and reliable small coinage. The conquests of Alexander the Great brought these advances to the Mediterranean world and the Middle East. Agribusiness took root, and the Romans developed public contracting, corporations, and even shopping malls. Roberts concludes with the mysterious, virtual disappearance of business in the third century A.D. Each of his chapters vividly portrays the major types of business that thrived in a certain era and the status, wealth, and treatment of business owners, managers, and workers. The narrative throughout sustains a focus on issues of business morality, the nature of wealth, the role of finance, and the development of public institutions shaping business possibilities. In extent and content, Roberts's research is unparalleled, forming an absorbing account of a long neglected history.

   

• The Robin Hood Rules for Smart Giving
  Author(s): Weinstein, Michael M.; Bradburd, Ralph M.
  Keyword(s): Business; Development; cbsp
  Abstract:

  The Robin Hood Foundation is a charitable organization focused on alleviating poverty in New York City. Michael M. Weinstein is the foundation’s senior vice president. In that role he developed its metrics-based approach, called “relentless monetization,” to ensure that the money the foundation receives and grants is used most effectively. Ralph M. Bradburd has served as long-time consultant to Robin Hood on matters of metrics.

  In this book Weinstein and Bradburd show how to implement the Robin Hood approach and explain how any nonprofit organizations or philanthropic donor can use it to achieve the greatest benefit from every philanthropic dollar. Drawing on their extensive knowledge, the authors devote specific chapters to the difficulties most frequently encountered by donors trying to measure the benefits of their initiatives.. This book provides straightforward, targeted advice for funding “smart” nonprofit programs.

• The Seventh Sense: How Flashes of Insight Change Your Life
  Author(s): Duggan, William
  Abstract:

  Flashes of insight—the “Eureka!” moments that produce new and useful ideas in a single thought—are behind some of the world’s most creative and practical innovations. This book shows how to cultivate more and better flashes of insight by harnessing the science and practice of the “seventh sense.”

  Drawing from recent findings in psychology, neuroscience, Asian philosophy, and military strategy, Duggan illustrates the power of the seventh sense to help readers aspire to and achieve more in their personal and professional lives. His examples include Gandhi, Joan of Arc, Starbucks founder Howard Shultz, and executives and students he has taught in his classes. His book presents specific steps in the form of three practical tools to help prepare the mind, see and seize opportunity, and follow through on one’s resolution. Based on Duggan’s perennially popular Columbia Business School course, this book teaches the mental skills and discipline that power the seventh sense.

• The World’s First Stock Exchange
  Author(s): Petram, Lodewijk
  Abstract:

  The launch of the Dutch East India Company in 1602 initiated Amsterdam’s transformation from a regional market town into a dominant financial center. The Company introduced easily transferable shares, and within days buyers had begun to trade them. Soon the public was engaging in a variety of complex transactions, including forwards, futures, options, and bear raids, and by 1680, the techniques deployed in the Amsterdam market were as sophisticated as any we practice today.

  Lodewijk Petram’s eye-opening history demystifies financial instruments by linking today’s products to yesterday’s innovations, tying the market’s operation to the behavior of individuals and the workings of the world around them. Traveling back to seventeenth-century Amsterdam, Petram visits the harbor and other places where merchants met to strike deals. He bears witness to the goings-on at a notary’s office and sits in on the consequential proceedings of a courtroom. He describes in detail the main players, investors, shady characters, speculators, and domestic servants and other ordinary folk, who all played a role in the development of the market and its crises. His history clarifies concerns that investors still struggle with today, such as fraud, the value of information, trust and the place of honor, managing diverging expectations, and balancing risk, and does so in a way that is vivid, relatable, and critical to understanding our contemporary financial predicament.

• When Principles Pay: Corporate Social Responsibility and the Bottom Line
  Author(s): Heal, Geoffrey
  Keyword(s): cbsp; Economics; Business; Corporate
  Abstract:

  Stories of predatory lending practices and the reckless destruction of the environment by greedy corporations dominate the news, suggesting that, in business, ethics and profit are incompatible pursuits. Yet some of the worst lenders are now bankrupt, and Toyota has enjoyed phenomenal success by positioning itself as the green car company par excellence. These trends suggest that antisocial corporate behavior has its costs, especially in terms of the stock market, which penalizes companies that have poor environmental track records and rewards more socially conscious brands.

  The political context of our economy is rapidly changing, particularly in regard to incentives that operate outside the marketplace in a strict and narrow sense and involve interactions between corporations and nongovernmental organizations (NGOs), activist groups, regulatory bodies, consumers, and civil society. These interactions can significantly color a corporation's alternatives, making socially or environmentally harmful behavior much less attractive. British Petroleum, for example, has voluntarily reduced its greenhouse gas emissions over the past ten years, Starbucks, has changed the environmental impact of its coffee production, and Nike and other footwear and textile makers now monitor the labor conditions of their subcontractors.

  When Principles Pay jumps headfirst into this engaging and vital issue, asking whether profit maximization and the generation of value for shareholders is compatible with policies that support social and environmental goals. Geoffrey Heal presents a comprehensive examination of how social and environmental performance affects a corporation's profitability and how the stock market reacts to a firm's social and environmental behavior. He looks at socially responsible investment (SRI), reviewing the evolution of the SRI industry and the quality of its returns. He also draws on studies conducted in a wide range of industries, from financials and pharmaceuticals to Wal-Mart and Monsanto, and focuses on the actions of corporations in poor countries. In conclusion, Heal analyzes how social and environmental performance fits into accounting and corporate strategy, presenting an executive perspective on the best way to develop and implement these aspects of a corporation's behavior.