Hidden Value

I took a couple of books away with me on holiday this summer. The first was Steve Jobs biography, I’ve been reading this forever, since April 2012. It’s one of those books I’d only pick up when travelling and I was determined to finish it during the my 10 day break in Mexico. I figured that wasn’t enough reading material so I also picked up a copy of Hidden Value.

I have to say, I thought the two books dovetailed nicely. Steve Jobs certainly installed strong values at Apple, making sure the product design and experience was everything.

You can choose what you take away from his biography. I thought it was very tasteful that the author gave Steve some of the last words. The following resounded in my head, probably because I consider myself a product guy.

My passion has been to build an enduring company where people were motivated to make great products. Everything else was secondary. Sure, it was great to make a profit, because that was what allowed you to make great products. But the products, not the profits, were the motivation.

…

I have my own theory about why decline happens at companies like IBM or Microsoft. The company does a great job, innovates and becomes a monopoly or close to it in some field, and then the quality of the product becomes less important. The company starts valuing the great salesmen, because they’re the ones who can move the needle on revenues, not the product engineers and designers. So the salespeople end up running the company.

…

When the sales guys run the company, the product guys don’t matter so much, and a lot of them just turn off.

Steve Jobs

Hidden Value’s subtitle is “How Great Companies Achieve Extraordinary Results with Ordinary People”. It’s not a new book and was published in 2000.

The authors use case studies of several exceptional companies (Cisco, SAS Institute, Southwest Airlines) and an example of a good but not great organisation (Cypress Semiconductor). The latter case demonstrated greatness requiring a company to fire on all cylinders, executing on most is not enough.

The successful companies in this book turn conventional management wisdom on it’s head:

There is no “war for talent”, perpetually acquiring “top talent” provides no guarantee of competitive advantage for organisations that do not foster the right culture. Companies that do, benefit from increased retention of staff and find it easier to attract new people.

Values come first and the company must live and breath them. Numerous examples in the book demonstrate that simply force feeding superficial values never works as it requires constant effort that eventually fades. Successful organisations believe in these values to their core and do not perceive promotion and execution of them as disposable.

Many companies put systems in place to control employee behaviour, focusing on the small minority of unmotivated staff and optimising at the wrong end. The side effect is alienating the motivated majority. Extraordinary companies trust their people.

I liked the delivery of this book, using stories that offered the reader only interpretation instead of prescription like many management books.