A simple truism of life, management consultant Verne Harnish reminds us, is that success equals the sum total of all the decisions we make. While all these decisions together can determine our overall success or failure, there are often singular choices that make monumental change.
Such decisions made by great business leaders are the subject of Harnish’s insightful and revealing new book, The Greatest Business Decisions of All Time: How Apple, Ford, IBM, Zappos, and Others Made Radical Choices that Changed the Course of Business.
Determining the most significant business decisions is not an easy task. Harnish sagely turned to his colleagues at Fortune magazine, where he is a contributor, for help. The result is a fascinating compilation of the best business decisions made by successful companies.
Harnish and his team of contributors single out 18 significant management decisions that are distinctive and often counterintuitive. In their success, these decisions created a wave of imitation. Ultimately, the decisions selected here are those that have stood the test of time, with undisputed value that could be applied to any business.
Each chapter can be read independently, giving the reader the option to choose companies, decision makers or subjects in selecting where to begin. It can prove to be a difficult and enticing choice; each author is an expert in the industry or subject he or she presents, and the writing is superb.
Don’t skip over the foreword by Jim Collins, who from the first paragraph sets a tone for the rest of the book. Decisions, Collins suggests, are usually thought of as very much about “what?” In his research and interviews, however, Collins has found that the greatest decisions were not “what?” but “who?” They were always people decisions, he argues.
“Great decisions begin,” Collins says, “with really great people and a simple statement: I don’t know.” The leaders who produced extraordinary results were those comfortable with saying “I don’t know” until they knew, he concludes.
My favorites in the list of 18 management decisions include:
• Apple: When the decision was made to rehire Steve Jobs as CEO of the company he founded after more than 10 years, the result was the most valued company in the world.
• Zappos: The founders of this online shoe retailer made the decision to offer free shipping and free returns and to focus on fantastic customer service, helping to propel the company ahead of its competition.
• Samsung: Suffering from an inward-looking culture, this South Korean electronics company decided to institute a sabbatical program, investing in its talent by sending workers to other countries. Their networking proved a vital investment in the future.
• 3M: One of the world’s most innovative companies for nearly 100 years, 3M decided to give employees time to daydream, spending 15 percent of their time on their own projects. The result has been phenomenal innovation even during economic downturn.
• Nordstrum: The decision to let customers make returns even if they didn’t buy the item at one of its stores made this company the world’s best retailer. The Seattle-based company changed service standards with its liberal return policy.
• Johnson & Johnson: At a cost of $100 million, this company pulled every bottle of Tylenol off the shelves when it was discovered that some bottles had been laced with cyanide. The CEO’s determination that the company’s first responsibility was to consumers became a textbook case.
The writers excel at detailing the difficulty behind many of the decisions. This makes the reading interesting and the stories often dramatic. For example, Johnson & Johnson CEO James Burke had been cautioned against a Tylenol recall by no less than the FBI, who feared a panic. Toyota, when it made the decision to pursue zero defects, went against Japanese culture and adopted an American’s quality standards.
This concise book is long on insight. It is a fascinating look at business decisions as well as the leaders who often struggled to make them. Put this book at the top of your business reading list.