What Really Works : The 4+2 Formula for Sustained Business Success

Rating:
Summary: 5 top insights of What Really Works
Review: 1. "Devise and maintain a clearly stated, focused strategy":
This is the first of four essential management practices the authors found were essential for success; firms must do all four of these, plus any two of four secondary practices (which are listed under item number five below.) What is most important, say the authors, is that you develop and communicate a strategy so that it is widely understood throughout your firm.

2. "Develop and maintain flawless operational execution":

The second practice involves consistently meeting customer expectations, while continually making your operations more efficient.

3. "Develop and maintain a performance-oriented culture":
The trick is to get employees to embrace a high performance culture. The challenge is being willing to get rid of underperformers, because such people "are quite likely to corrode your culture and weaken the performance of people around them."

4. "Build and maintain a fast, flexible, flat organization":
There is no single winning organizational structure. What really matters is whether the structure you use simplfies work and reduces bureaucracy.

5. Pick any two of these secondary management practices:
The authors say it doesn't matter which two of these four practices you pick, just that you pick two and master them: "hold on to talented employees and find more," or "keep leaders and directors committed to the business," or "make innovations that are industry transforming," or "make growth happen with mergers and partnerships."

Rating:
Summary: Great Book
Review: 1. "Devise and maintain a clearly stated, focused strategy":
This is the first of four essential management practices the authors found were essential for success; firms must do all four of these, plus any two of four secondary practices (which are listed under item number five below.) What is most important, say the authors, is that you develop and communicate a strategy so that it is widely understood throughout your firm.

2. "Develop and maintain flawless operational execution":

The second practice involves consistently meeting customer expectations, while continually making your operations more efficient.

3. "Develop and maintain a performance-oriented culture":
The trick is to get employees to embrace a high performance culture. The challenge is being willing to get rid of underperformers, because such people "are quite likely to corrode your culture and weaken the performance of people around them."

4. "Build and maintain a fast, flexible, flat organization":
There is no single winning organizational structure. What really matters is whether the structure you use simplfies work and reduces bureaucracy.

5. Pick any two of these secondary management practices:
The authors say it doesn't matter which two of these four practices you pick, just that you pick two and master them: "hold on to talented employees and find more," or "keep leaders and directors committed to the business," or "make innovations that are industry transforming," or "make growth happen with mergers and partnerships."

Rating:
Summary: A gold standard vs. tin Gods
Review: For those of us on the receiving end of yet another directive from the corner office regarding the latest "fix the company" fad, help is on the way. In What Really Works: The 4+2 Formula for Sustained Business Success the authors (Joyce, Nohria and Roberson) actually have the temerity to introduce analysis instead of feel-good musings and, pshaw, to compile data from first-hand surveys from hundreds of companies over a 10 year span (1986-96) versus the typical seat-of-the-pants insights gleaned from a subway ride.

The result is a well reasoned piece that eventually identifies a code of practices to which successful companies adhere. The first set, the 4, are the primary areas, namely, strategy, execution, culture, and structure. The secondary set, the +2, is comprised of talent, leadership, innovations and mergers and partnerships. The fundamental premise is that the key to long-term success is to merge the primary 4 with any 2 of the secondary set, hence 4+2 in the title. Extensive evidence is offered by way of the aforementioned corporate surveys to demonstrate the results that arise from application (success) or neglect (failure) of the 4+2 strategy.

The key difference from traditional management strategy books is quite simple. The authors seem content to identify and codify a set of practices based upon extensive analysis of the survey data. Unlike many of the "all the rage" books of the day, one gets the feeling they did not begin with any particular conceptual axe to grind. They "pan" their data for the consistent themes and practices and, in the end, the business practitioner is pretty much left with a gold standard for guiding the enterprise. A far cry, indeed, from a field so often characterized by the newest offering from the latest tin God.

Rating:
Summary: extremely disappointing
Review: I enjoy reading business books - but this one was a waste of time and money, and a major disappointment (as a joint project between a former partner at McKinsey and 2 professors from Harvard and Dartmouth, one would expect a book worth reading!).

Aside from identifying the 4+2 factors that came out of the authors' research (you can read what those are in comments from other readers, and save yourself time and expense), the book sticks to platitudes and gives very little real insight. Does not hold a candle to such books as "from good to great" or "execution".

Rating:
Summary: Verification of an age old realization
Review: Many times the answer is simple, seemingly to simple in fact and we feel the need to make it more complex. The best ads are always very simple (Got Milk or Just Do It). Commitment and consistency to the "answer" on the other hand is not simple or even easy to come by and that is the theme of this book. As a veteran marketer I have heard all of the 200 management practices as referenced by this book. I have watched (and particpated in) many of them fail and many win. But none seemed to ensure that the company would indeed be successful. Rather they are only tools to be used as part of a process. I need evidence and science (i.e. fact) to commit. This book's research has that evidence that gives it authority to express the simple but hard to follow thruths. It outlines (in real world examples) the neccessary ingredients that have made/keep many a company successful. This not only is A MUST READ but I feel a book that should become the textbook for business and marketing students. Thank you to the authors for their commitment of ten years and the focus in preparing this book. We have no reason to fail now.

Rating:
Summary: Mixed feelings
Review: This book does a decent job fulfilling its mission, to reveal "What Really Works." And, from my experience, the authors are right on. Winning companies all have many things in common. Mostly, this is what Collins and Porras call "clock building" in "Built to Last:" designing an organizational architecture that grows, and maintains its integral core despite the changes in internal people and external strategies. "What Really Works" talks you through some of the steps necessary to make that clock. First, listen to what the customer wants. Then make filling that need your strategic focus. Make that value offering clear. Ensure that your controls and systems are top notch, so that employees can execute the strategy. Align the culture and organizational structure so performance is rewarded, again supporting the strategy. Once these major criteria are fulfilled, you can begin to think about secondary practices, namely developing people and leaders, keeping talent and innovating.

I am truly split on this Joyce and Nohria's work. It is well written and easy to read. I also like the companies presented in case studies. These weren't your typical 3M/GM/IBM/Dell case studies, but Nordstrom, Nike, and the Limited. Sort of warms my heart not to have to read the history behind Post-It-Notes for the 5000th time. But, I also have some serious issues with the book.

A former science geek in my undergrad years, I love precision. I like the thoroughness that the authors IMPLY went into the Evergreen Project. I say IMPLY, because, unlike Collins and Porras in "Built to Last," the authors do not tell us anything about their research methods. They also claim to have combed the literature and statistically eliminated all but eight of 200+ popular management practices. What were those 200+ practices? How did the Evergreen team research companies for the presence or absence of said practices? An appendix of research practices and results would be nice.

Weaknesses aside, I recommend this book on two counts. First of all, because I truly get the impression that there is some serious research behind the premises. And, if you accept the premises, the "Further Reading" section, grouped by books relating to each of the core practices, is worth the price of the book.

Rating:
Summary: No support for the central premise
Review: This book has one glaring weakness: it offers absolutely no support for its central premise, which is that the authors have discovered the definitive eight management practices that, if a company is able to execute six effectively, have a 90 percent chance of predicting success ("the link between 4+2 practices and business success was astonishing. A company following the formula had a better than 90 percent chance of being a Winner." (page 15)). The complete description of their analysis is contained in just three paragraphs on pages 12 through 14. And there is nothing in these three paragraphs that describes a methodology for determining that the eight management practices they have chosen correlate to business success any better than any other of the 200 they reviewed.

It has other weaknesses: it does not provide a list of the 200 management practices that the authors reviewed in the course of their research, and it does not provide a list of the 160 companies and 40 industries that the authors concentrated on and are the basis for their findings.

I was also put off by their use of heroes and villains. It seems that their heroes, notably David Johnson of Campbell Soup and Ken Iverson of Nucor Steel, can do no wrong. Representing the villain, Chapter 12 uses Nike and Phil Knight as an example of what happens when a company fails to follow the management practices that the authors prescribe; in contrast to Johnson and Iverson, Nike and Knight could do nothing right. This is utter nonsense; like all successful companies Nike and Knight did many things right. The authors' analysis of Nike and Knight feels like a safely cutting the legs out from under a wide receiver who doesn't have the ball yet, a very cheap shot.

Much of what the authors offer is conventional wisdom. Dealing with the 4 in their 4+2 formula, are there any surprises in being told that your strategy needs to be clear and focused, that you need to execute well, and that you need a performance-based culture to be successful? As for making the organization flat, is this to say that large and complex companies like Boeing cannot be successful?

As for the 2 in the 4+2 formula, that you need to develop and keep your talent seems, again, to be conventional wisdom. I would tend to question the idea that management and directors have to have a significant equity stake in the company because I haven't seen any support for this idea anywhere in business literature. Industry-transforming innovations have been the route to success for many companies, including many of the dotcoms and technology companies, some of which are still with us. As for mergers and partnerships, many studies have shown that most mergers fail to meet their objectives and wind up diminishing rather than creating value for the acquiring company, and, if I recall correctly, Michael Porter did an analysis of partnerships that showed that they don't work any better than mergers.

Speaking of Michael Porter, I was surprised to see that Michael Porter and Tom Peters had comments included on the flyleaf. Tom Peters seems to have damned the book with faint praise. Michael Porter's books were groundbreaking. (I especially enjoyed The Competitive Advantage of Nations.) This book is not in the same class as the books by either of the authors.

In the absence of much more convincing evidence, I do not believe that this is "the first book identifying the fundamental practices that create business success - the ones that do indeed really matter" (page 5), nor do I buy their assertion that, "Now that they have the results of the Evergreen Project [the study the book is based on], the long era of trial and error is over" (page 23).

My guess is that if you manage a company, you've already discovered that there is no magic bullet.

Rating:
Summary: Book really works
Review: This book is a "must read" for the business person today. There are some terrific insights that can help managers in most organizations today. The data and research provide clear support for these insights.

It is on the data aspect that this book is weakest. It could have been better by including more of the quantitative findings. Still a book worth reading, keeping, and USING.

Rating:
Summary: Great Book
Review: This book was well written and covered everything necassary to support it's purpose. Some of these people who wrote these bad reviews don't have a clue about bussiness success and bussiness leadership. I am glad I didn't pay attention to these idiots. Definitely read this book!