A summer reading challenge

REVIEWS BY SHARON SECOR

August is traditionally a slow month. Summer is ending and it seems the whole world tries to relax before the back-to-school, back-to-work clamor begins. In France, the whole country retreats to the beach with a book and a bottle of wine. In America, we traditionally barbecue and lounge in pool or patio. The living, as the song says, is easy.

While bodies rejuvenate, this is a good time to restart the mental engines. Summer reading offers the chance to analyze and savor ideas without interruption, to challenge your thinking and refresh your mental nimbleness. Each of the business books we recommend here offers a refreshing and challenging theory or looks at an old problem from a new, provocative perspective.

Change is good

John Kotter's Leading Change, released in 1996, resonated strongly with managers and went on to become the best-selling book ever published by Harvard Business School Press. In that ground-breaking work, Kotter explained why efforts for change within organizations frequently end in failure. A new follow-up, The Heart of Change: Real-Life Stories of How People Change Their Organizations, co-authored by Dan Cohen, should give hope to cynical managers. The authors argue that large-scale change is possible if the right path is followed, and they outline a clear strategy for negotiating that path.

At the core of the strategy is a simple formula—see, feel, change—that can help organizations make successful changes. The people in a business must see a problem, preferably in dramatic, eye-catching fashion; they must feel the urgency of solving the problem; and they must change the behavior that caused the problem in the first place. The conclusions in The Heart of Change were based on interviews with 400 people from more than 100 organizations, and the real-world examples cited liberally throughout the book make this a highly readable and practical choice for any businessperson who wants to stir up change and make it stick.


The paradox of race

In American Skin: Pop Culture, Big Business and the End of White America, former Wall Street Journal columnist Leon E. Wynter makes a cogent case that consumer culture has radically changed the terms of racial discussion in America. Our identity is now transracial, based more on our spending habits than on our skin color. Part cultural history, part business history, American Skin outlines the major cultural events that have shaped American life and with great historiographic skill traces the changes in marketing that followed those events.

From the famous Mean Joe Green Coca-Cola commercial to the introduction of Revlon's Colorstyle line, Wynter argues that advertising has subtly changed the way we view ourselves as Americans. The melting pot "into which generations of European American identities are said to have dissolved, is bubbling again," Wynter writes, and the flame firing that brew is big business. This is a fascinating book with a hopeful message about the interaction of democracy and the marketplace.


The end of privacy

World Without Secrets: Business, Crime and Privacy in the Age of Ubiquitous Computing by Richard Hunter delivers a first-rate explanation of the impact of technology on the public, government, business and communities. Hunter, who is vice president and director of security research for GartnerG2, a division of the world's largest technology research firm, writes expertly and urgently about the panoply of internet-related problems each of these diverse groups will face in the years ahead. "There's way too much information—about everything—out there now, and it's going to get a lot worse," Hunter argues. Because technologies arrive at different times, their impacts are cumulative. We don't see the true effects of a technology's use until long after that technology has invaded our everyday world. Looking forward, Hunter describes a world in which loss of privacy, technological terrorism and the heist of artistic rights are a foregone conclusion. This is an important book which sheds thought-provoking light on the slippery slope we are descending when it comes to Internet technology.


Cracking down on corporate fraud

Management consultants Larry Elliott and Richard J. Schroth deserve some kind of award (such as Timeliest Book of the Year) for their foresight in deciding to write a book on corporate ethics. Their compelling new exposé, How Companies Lie: Why Enron is Just the Tip of the Iceberg, arrived on bookstore shelves in July, soon after news broke of the WorldCom accounting scandal—the latest in a string of corporate fraud cases that have rattled investors, regulators and employees. Since they're the first to publish a book on the topic, Elliott and Schroth have quickly become media darlings, appearing widely on television and radio in recent weeks to spread the word about corporate misdeeds.

The authors call their book an "investor's guide to corporate smoke and mirrors," and the gory details make for scary reading, indeed. All the tricks, all the scams and all the ways corporations "cook the books" are here. The culture of dishonesty is so pervasive that financial statements and earnings projections can no longer be trusted. Elliott and Schroth say they actually started writing the book in early 2001, well before Enron began to unravel. They found that numerous corporations—possibly as many as 10 percent of the nation's 14,000 public companies—have serious accounting problems.

What can investors do to sort through the maze? As outlined in How Companies Lie, they must begin to ask tough questions—of corporations, analysts and financial planners. They should avoid hot stocks and search for companies with trustworthy leadership. Elliott and Schroth also recommend several broader reforms to address the corporate cheating that is threatening the integrity of America's capital markets. One of these reforms is an "executive escrow" system that would require insiders to get approval from the SEC before selling their stock. But the authors note ominously that it won't be easy to correct the current web of deceit and double-dealing that has been decades in the making.


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