233Index
and prots 168–9
and success 166–7
when old and rich 40–1
innovation networks 188–91
innovation projects 11
insider trading 73
institutional investors and bad
news 121
“integration trouble” 182–3
internal databases 152–6
investment analysts 89–90
investment banks 88
and 2008 crisis 205–6
conicts of interest 91–4
corporate nance departments
91–2
research departments 89, 91
Intel
and development of
microprocessor 12–13, 172–3
and distracting initiatives 44
and DRAM memory chips 174–5
and emergence of strategies 27
and entrepreneurial creativity
39–40
and framing contests 24–5
ISO 9000 (quality norms) 2, 9, 136,
139–40, 144–5
Japanese shipbuilders 40
“job 1” 44
job enlargement/rotation study
127–8
Jobs, Steve (Apple) 73, 85
Karmazin, Mel (CBS) 53–4
Kelleher, Herb (Southwest Airlines)
197–8
Kinki Nippon Tourist Company 278
knowledge and complex systems
156–7
knowledge economy 152
knowledge management systems
154–6
knowledge providers, study of
152–4
Kodak 32
Kuru (disease) 131
Landau, Igor (Aventis) 182–3
language, use of “right” 124, 125
lawn story 57–8
leaders
and managers 84–5
types of 84–5
lemmings and analysts 89–90
learning effect of competition 160
letters to shareholders 120–1
listing (companies) 194–5
local circumstances, adapting to
178–80
long-term consequences versus
short-term benets 132, 144–5
long-term incentive plans and
stock price 123–5
low-cost airline model 26, 47
loyalty 132, 133, 199
M&A (mergers and acquisitions) see
acquisitions
macho culture 210
McKinsey culture 191–3
managers/executives
American versus Dutch 81–2
career aspirations of 53
glorication of 68
and leaders 84–5
perceptions of business 17–19
preoccupation with size 50
and self-fullling prophecies
125–6
stupid/arrogant 68
Index234
what they do 15
management
and 2008 banking crisis 204
by objectives 135
by walking around 136
management bandwagons 135–40
management compensation 88,
108
management consultants 146–8
portability of 149
as rats 145, 146
use of databases in sales bids
155–6
management fads 136–7
management practices 122–58
spread of harmful 122, 145–6
unintended consequences 122
as viruses 138–9, 141–2, 144
management systems and 2008
banking crisis 208
market mechanism of
remuneration 113, 115
marketing by pharmaceutical
companies 5
markets
and Darwin 47, 143, 145
“efciency” of 143–5
entering foreign 9, 178
Fremantle Market 173–4
Martin, Frank (Hornby) 83, 84,
171, 190
“the matrix” (acquisitions) 22
matrix organization 135
measure, tendency to 12
mental models 35–7
Merton, Robert 127
Metro (newspaper) 3, 46
microprocessors, invention of
12–13, 172–3
minority opinions 7
mission statement 16
Mital 55
money
making 175–7
and motivation 199, 200
risk of losing 6
Monsanto 96
motivation 199–201, 203
movie distributors 125–6
myopia of success 205
Narcissus 70
networks
in companies 184–6, 188
innovation networks 188–91
Newey, Peter (Hornby) 84
newspapers
doing the opposite 10
and the Internet 32
responses to decline 46–7
responses to online media 42–3
size of 3, 10, 46
Nissan 73
normal people 8–9
Novartis 182
NTP (patent company) 151–2
numbers
in business plan 12
and decisions 13, 19
and false security 17
over-reliance on 62
and solutions 14
and strategy 12–13
“objectivity” of numbers 12
Odysseus and the Sirens 99
old boys network 88, 108
Operation Market Garden 33–5
opportunity
change as 32
recognizing 171–3
versus threat 41–3
235Index
optimal distinctiveness theory 8
options see stock options
outside directors 101–2, 120–1
outside entrants 6–7
outside the box, thinking 37
outsourcing 26, 170
participative management 136
Pasteur, Louis 172–3
patent attorneys, study of 192
patent sharks 150–2
patents as corporate currency 151
pay inequality 202–4
peer behavior 10
peer groups 8
for CEO compensation 116–18
performance
and innovation 164
measuring 123
and social responsibility 211
of teams 203–4
performance-related pay
and behavior 118–20
and stock options 109–10
personal computers 12, 29, 172
pharmaceutical (pharma)
companies/industry 39–40
detailing by 4–7
in distress 40
doing the opposite 9–10
planes, damage to 10–11
Post-It note, invention of 140
power distributions 186
price differentials 46
protability
and acquisitions 61, 66
and downsizing 133–4
and growth 57
prots and innovation 168–9
prospect theory 6
public companies 194, 196
pulling the plug, when to 35
pyramid investment schemes 208
quality
measuring 18
spending savings on 26, 170
quality circles 136
quality improvement 18
quantication, difculty of 13
R&D departments 157–8
rabies virus 138
reality of change 33
Red Queen effects 159–61
Redstone, Sumner (Viacom) 53–4
re-engineering 136
remuneration committees 114–16
re-organizations 183–8
and strategy 188
replication of businesses 177–80
representatives of pharma
companies 5
research
by pharma companies 5
R&D departments 157–8
rest, need for 56–6
retaining value 176
revenues in a downturn 43–5
reverse causality 128–30
risk
and agency theory 110–11
of being different 8
and diversication 95
good and bad 111–12
and greed factor 208
of losing money 6
management of 78
and stock options 111
and success/failure 11–12
and “top performers” 79
versus return 78
Index236
Risk (game) 22–3
risk-takers 11–12
running
to stay in same place 160
in wrong direction 160–1
Sadler’s Wells theater
and innovation 39, 168–9,
189–90
and stories 83
Schultz, Howard (Starbucks) 179
Sculley, John (Apple) 85
security/equity analysts 94–7
study of portability of 149–50
SEI 186–8
selection bias 10–12
self-conrming dynamics 126
self-fullling prophecies 126–7
and analyst coverage 89
and managerial expectations 128
of movie distributors 125–6
self-interest 199–200
share price see stock price
shareholder value orientation
195–7, 213
shareholders 196–9
Sharp, Chrissy (Sadler’s Wells)
168–9
short-term benets versus long-
term consequences 132, 144–5
sigma (error rate) 18
Sirens 98–9
Six Sigma 9, 136
size as objective 50–1
Skilling, Jeff (Enron) 69, 74, 78
social responsibility 210–12
soft stuff (factors) 14–15, 58
and public corporations 196
and security analysts 149–50
solutions, looking for 14
Southwest Airlines
and employee orientation, 197–8
as rst low-cost airline 26, 47
and success, 179
Spalding, Alistair (Sadler’s Wells)
83, 168–9
spare parts in a downturn 49
speaking up/staying quiet 7
Spring, Stevie 82–3, 86
stakeholders 196
star workers, portability of 148–50
Starbucks 179
status and advice-seeking 109
stock market
and CEO’s time 194–5
competitions to play 79
stock options 88
and CEOs 109–11
and earnings manipulations 112
as performance-related pay
109–10
and risk 110–13
stock (share) price
and acquisitions 63–4, 67
analyst inuence on 89–93, 94–5
and awards 77
and CEO behavior 71
and letters to shareholders 120
and long-term incentive plans
123–5
and social responsibility 212
strategic change, responses to 33
strategic decisions 2, 42
strategic management survey 15–16
strategic rationale 22
strategic recognition capacity 172
strategy 21–3
adapted to actions 62
denition 13
emergence of successful 25–7
and numbers 12–13
and re-organizations 188
237Index
steps to corporate 19–21
strategy development/meetings
23–5
strategy-making 161–3
Stromberg, Arthur (URS
Corporation) 97
stupidity 1–2, 6, 68
success
as determinant 29
and herds 205–6
and incompetence 77–9
and innovation 166–7
myopia of 205
and organizational culture
129–30
and progress 36
and size 50–1
success trap 28–49
avoiding 183
and cloning 107
and competition 160–1
getting out of 43–7
and innovation 168
survival
and bravery 47–9
and innovation 165
Swatch 85
sweet-talking by CEOs 99–101
Swiss watch industry 32
synergies of mergers 54–5
T groups 135
takeover protection mechanisms
213–14
talent, attracting/retaining 15
tax on newspapers 3
team performance 202–4
teams 136
Tesco 61
theory X/theory Y 135
Thomke, Ernest (Swatch) 85
threat
change as 31–2
versus opportunity 41–3
threat-rigidity effect 44, 48
thrill of the chase (acquisitions) 53
THUS 194
time compression diseconomies
56–7, 62
The Times (newspaper) 3, 46
Tolstoy (on Napoleon) 74–5
top performers 79
total quality management (TQM)
136, 137–9
tribes 52, 200
tunnel vision 31–3
unanticipated consequences 122
and downsizing 132
and ISO 9000 139–40
Union Carbide 75, 204–5, 208
United Airlines 178
URS Corporation 97
US Airways 198
value
creating 176, 182
in re-organizing 184–5, 186
retaining 176
shareholder orientation 195–8, 213
van der Hoeven, Cees (Ahold) 52,
59–62, 74, 78, 206
Vasella, Daniel (Novartis) 182
Viacom/CBS merger 53–4
viruses
and management practices 138–
9, 142, 145
persistence of 141, 144, 145
rabies 138
vision statement 16
volatility studies 17–18
voluntary turnover rate 124–5
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