Reviewed by David L. Perkins, Jr.

The most recent book by Steven Berlin Johnson, Where Good Ideas Come From, is an interesting read on a topic I suspect few of us have given much consideration — how breakthrough ideas, concepts, innovations and technologies are found. Who finds them? What types of things or conditions might contribute to a person finding a great new idea or invention?

Johnson certainly lays it all out.

Educated primarily in literature, language and history, Johnson packs his book full of historical accounts of the great “ideas” of modern history — astrology, math, science and technology. He begins with the inventions of double-entry accounting (1300 to 1400 AD) and the printing press (1440); extends through the flush toilet (1596), pendulum clock (1656) and bicycle (1787 to 1863); all the way through the World Wide Web (1989 to 1992) and gamma ray bursts (1997).

The book is worth the price just for the exhaustive list of historical, scientific and mechanical breakthroughs and innovations. Included is a brief explanation of each that includes circumstances surrounding the “breakthrough.”

Johnson interestingly asserts that ideas are a lot like genetic mutations (or variations). Both are a creation of something new. Both are put to the competitive test, and survive or die based on their utility. Further, both idea creation and genetic mutation rarely take great leaps forward. They occur incrementally. A fish is born with a fin that’s just a touch different and happens to allow greater swim efficiency. A grape (wine) press is modified to press letters onto parchment.

A fish did not mutate into a man, and the printing press was not conceived by Gutenberg out of mud and plant material. Johnson explains that, in contrast to conventional wisdom, great ideas are not drawn on white canvas by geniuses sitting in their studies “thinking” about what great ideas they might be able to conjure. No, they’re limited to “the adjacent possible.” New ideas and adaptations are built incrementally on what has already been created. Idea generation, like natural evolution of living things, is a slow process from simple to progressively more complex. Ideas are built on other ideas just as nature and living things evolved from just a few primordial gases, to simple molecules, to more complex molecules, to simple organisms, to more and more complex organisms.

And as the date ranges suggest in the list above, invention almost always occurs not in a single “ah hah” moment but in an incremental process of discovery over months, years, even decades. Similarly, the process of discovery most often occurs between and among multiple people working on the same or similar problems or concepts. Each borrows from and learns from the successes and failures of theothers. Invention is collaboration, trial, error and discovery. Sure, historians tend to want to pin discovery on a single person or persons, but like a team winning a championship, it’s made possible by the work of many people over many years.

But as with many books, the concepts seem to be expanded to fill the desired page count. Not that there are pages of worthless text, but for those wishing to get the data and move on, the pace is a little slow. And I must disagree with one of the themes of the book. Johnson asserts that our patent law system stifles innovation by taking ideas out of public circulation. It is my understanding that filing a patent is a process of public disclosure. Patent filings and patents are available to the public, and each includes a full, precise explanation of the idea or innovation. Thus, patent law serves to release ideas into the world rather than protect them, as Johnson asserts.

Regardless, Where Good Ideas Come From is an informative read for anyone with an interest in history, evolution, invention and idea generation.

Reviewed by David L. Perkins, Jr.

Unsettling. That’s the word that first comes to mind when I ponder the message in The 4-Hour Workweek.

Yes, it’s also interesting. And exciting, in a way. But unsettling because it makes me question everything.

Why do I work so hard? Is there a better way? Am I efficient and effective in my work?

Timothy Ferriss’ answer is unquestionable. “No, David Perkins. You work 50 hours per week and thus you are a sucker.”

I have always believed, and often say, “Hard work is good for the soul.” So do I simply fill up my plate with work so I can feel good about myself?

More to the point, am I really happy working this much?

Is there a better way? A more rewarding way?

Timothy Ferriss, author of The 4-Hour Workweek, is one strange dude. He’s apparently a best-selling author, highly paid speaker, angel investor, and owner of a profitable business (so he says), but he also says he answers email just once a day, has not had an in-person meeting in something like five years, keeps phone conversations to minutes, and spends half his time traveling overseas and does not accept any phone calls while away — even for “emergencies.”

Unquestionably, Ferriss is a different breed of cat. He says he does not answer his own phone, but rather lets all calls go to voice mail, which then automatically emails him a text version of the message. He’s just 32 years old; he says he was accepted to Princeton despite being vastly unqualified; and he became world champion of Chinese kickboxing in 1999 after just four months in the sport. How? He dropped shocking amounts of weight (doctor assisted) before weigh-in and then using his size/strength advantage to throw every single one of his opponents out of the ring. Oh, and he holds the Guinness Book of World Records record for most consecutive tango-spins in one minute. Huh?

Of course, innovations are not made by conformists. It’s the oddballs who change everything. Darwin would have loved this guy.

The 4-Hour Workweek is packed with tools, tips and tales designed to shake us out of our “work like a dog until retirement” style of living and get us to start living today. How? By redesigning our work lives so we reduce our workload and quadruple productivity and profit. He says it’s more than possible. He’s living proof.

Throughout the books, he shows his youth. He seems to think happiness is about being able to regularly take exotic, extreme adventures around the world. Even so, I guess we can do what we want with any spare time and cash we’re able to carve out by applying his suggestions.

Reviewed by David L. Perkins, Jr.

Robert B. Reich is an economist, professor, author and political commentator. He served in three presidential administrations- those of Gerald Ford, Jimmy Carter and Bill Clinton. A graduate of Dartmouth College (summa cum laude), Oxford University and Yale Law School, Reich is considered one of America’s foremost political economists.

He is currently Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California, Berkeley. He was formerly a professor at Harvard University’s School of Government and professor of social and economic policy at Brandeis University. In 2008, Time magazine named him one of the Ten Most Successful Cabinet Members of the century, and the Wall Street Journal placed him among America’s Top Ten Business Thinkers.

In Aftershock, Reich says economic recovery requires that we get back to “the basic bargain.” He says the recession was inevitable because consumer spending is what fuels our economy. The middle class, representing 95 percent of the American populace, is our economic engine. The rich just do not amass enough demand to keep the engine of commerce running. And for the past 30 years, middle-class Americans have been squeezed economically. Wages and salaries have declined in real terms. The middle class has coped by working more hours, incurring more debt, delaying marriage and children, having fewer children, putting “the other spouse” to work and borrowing against home equity. These efforts kept the middle class spending and enjoying the fruits of “prosperity” to keep the economy growing. But the turnip can be squeezed no more.

Reich says the only way to get back on the path of economic growth and prosperity is more wealth in the pockets of middle-class Americans, more education, stronger social safety nets, more health care benefits and more government spending on infrastructure. And he believes the only way to fund these things is to revise federal tax policy, including more taxes on the rich.

Reich’s data show that the great prosperity of the 1950s, 1960s and 1970s occurred when marginal tax rates on the rich were in the 80th and 90th percentile, and government spending was extensive (welfare, Social Security and infrastructure-building).

Reich explains that most Americans think it was lower tax rates ushered in by President Reagan that fueled prosperity and a strong stock market the past 30 years, but GDP rates and stock market returns were higher in the 1950s, 1960s and 1970s.

Reich says the gap between rich and poor peaked in 1928 and again in 2008. We are reliving the past. By returning to “the basic bargain”- supporting a strong middle class and reducing the gap between rich, middle class and poor- we ALL once again can enjoy prosperity.

Reviewed by David Perkins

Want to know where the economy is headed? The stock market? Inflation and interest rates? Dr. Gary Shilling tells you. The only question is whether you believe him. He apparently has correctly forecast recessions and interest rate trends over the past 40 years. He’s foretold the Internet stock collapse of 2000 and the global real estate and mortgage debacle in which we are now mired.

Who is this seer?

He’s no slipper-footed swami. He’s an economist. He studies the pages of history and analyzes mountains of macroeconomic, socio-demographic and financial data — past and present — and spots unsustainable irregularities and instances where history is repeating itself. He’s able to look into layers of data and see weather patterns where most see just clouds.

How does he do it? He’s an intellectual cyborg. Bachelor’s in physics from Amherst, magna cum laude. Master’s and doctorate in economics from Stanford. He worked for The Fed while in his 20s and became chief economist for Merrill Lynch at the age of 29. He’s an economic advisor to investors and institutions across the globe and former member of the New York Stock Exchange. He has been named one of the world’s top stock market forecasters. He’s made a fortune investing his own funds. For example, he was an advisor to and co-investor with John Paulson (Paulson and Co.), who earned $20 billion in 2009 betting correctly on the collapse of collateralized debt obligation (CDO) securities.

In The Age of Deleveraging, Shilling tells us where he thinks the economy is headed and why. He also tells us where he thinks we should put our money in the years ahead. The Age of Deleveraging is fresh off the press. The foreword is dated May 2010 and the copyright is 2011.

Shilling says the coming decade will be marked by lower levels of consumer expenditures. The reason? Aging U.S. baby boomers will finally turn in earnest toward padding their financial nests for retirement. Real estate values have collapsed and home value appreciation can no longer be counted on. So consumers are amending their big-borrowing and big-spending ways. Savings rates will rise and spending will fall.

The impact? Low levels of economic growth worldwide.

U.S. consumer spending accounts for a whopping two-thirds of U.S. GDP and is the locomotive that pulls the entire world economy. Any sustained reduction in consumer spending will result in lower levels of economic growth. Slack demand — for everything from cars and houses to travel and entertainment — will result in excess supply and cutthroat price competition. As a result, deflation poses a far greater threat than inflation.

What can the business owner do with this information?

• Read the book. Don’t rely on this summary.
• Be cautious about adding capacity. Revenue growth may not be there to support it. Focus instead on cost reduction and efficiency enhancement.
• Pay down debt. Profit growth will be difficult. Survival could at times hinge on who has the lowest cash flow burden.

According to Dr. Shilling, the next 10 years will be more like the 1950s than the 1980s, 1990s or 2000s. It will become cool again to be thrifty and practical. It’s what we need to pay down debt at the personal, corporate and governmental levels, but it won’t be good for the economy or stock market.

Reviewed by David L. Perkins, Jr.

Every how-to book offers the promise of helpful information, but in most cases, it’s buried in 250 pages of text.

Not this one.

Growing Your Business! is more than brief. It’s about six inches tall and four inches wide, with large font and ample line spacing to boot. I read it just because the risk-reward proposition is so favorable. That is, it offered me the promise of useful information and downside risk of no more than 15 minutes of my time.

Darned if this book’s lessons didn’t speak to me.

I’ve read literally hundreds of books, most about business. I’ve been going through a period of burnout, cynicism about the lack of real wisdom, lack of valuable and actionable information behind the interesting title and attractive cover.

Growing Your Business! gets straight to the point. I like that. No, I love it.

The author’s message is to focus on three things: booking new business, collecting cash and taking more money home. If you want to continually make more money, you must continually focus on these three things. Yes, you must deliver your service and handle administrative duties such as collections, but your job is to figure out how you can get work done while continually focusing on growing these three activities.

Growing Your Business! author Mark LeBlanc says business owners tend to get distracted by all kinds of things that don’t contribute directly to booking new business, collecting cash, and taking more money home. Focus on these three essentials and the unproductive activities automatically fall away.

I like Mark LeBlanc’s advice. It’s simple. Makes sense to me. Here’s another one that make a lot of sense:

Set goals monthly. Setting goals and having focus is important. Most of us do it the first of each year. So when you’re off track by the third week of January, why let another 11 months go by?

What kinds of goals should you set each month? Just one: bookings. Each month, set a goal for bookings. LeBlanc calls it your “optimistic number” for the month. Then work each day to hit your optimistic number.

Reviewed by David L. Perkins, Jr.

Michael Gerber’s The E-Myth is the book most frequently recommended to me. That’s probably why I never read it. I have a fad phobia. “In vogue” is a call to all lemmings, as far as I’m concerned.

The E-Myth was first published in 1985. The E-Myth Revisited was published in 1995. It’s perennially on lists of best business books. It’s on the required reading lists of classes taught at institutions of higher learning the world over, such as Stanford. Not sure why I finally decided to pick up a copy, but let’s just say I’m not hopelessly stubborn.

It’s a good thing. Gerber says successful entrepreneurs tend to be open to learning new things. Always searching for knowledge. On a quest to get better every day. Ready to drop less productive methods for better ones.

Gerber addresses what we all know — few businesses owners break through and find the quality of life, freedom and financial success they desire. But of considerable value is his reason why.

Most businesses are started by people with technical expertise, he says. The entrepreneurial (“E”) myth is that technical expertise can provide a strong foundation to build a successful business on. In reality, success comes only by learning and effectively implementing certain proven techniques for growing and managing a business.

I’ve said for years that businesses should exist to serve their owners. Similarly, owners should not be slaves to their businesses. Gerber agrees, but he ALSO tells us HOW we can organize our business so we may be better served. So we can have a business and also a life.

Gerber says the trick is to build the business so:

• Every job is standardized, i.e., all job functions detailed in job descriptions and job manuals
• Every person knows exactly what to say and do in every instance (because it’s detailed in a written job manual)
• All tasks, even managerial, can be performed by the lower-skilled (and lower-cost) workers

The E-Myth says every business should be built as if it’s going to be franchised and the business owner must move from technician (and laborer) to leader.

Gerber says operations should be standardized so each employee knows exactly what to do and when to do it, and so managers spend their time bringing in business. How? The business owner’s job is to determine which marketing and sales methods work best and standardize those, too. Standardize the client acquisition side of the business so that — just as the operating side — the lowest skilled workers can execute and deliver results.

Gerber says the greatest development in business in the past century is the development of the franchise model pioneered by McDonald’s. Gerber says that 75 percent of franchises that open survive past their fifth anniversary. Non-franchise businesses — less than 20 percent.

I wish I had read The E-Myth 15 years ago.

Reviewed by David L. Perkins, Jr.

More than an insider’s account of events that led to the collapse of Lehman Brothers, it’s also a truly amazing story of a young man’s ”by hook or by crook” determination to break into the ultra-exclusive club that is Wall Street. Although the story could have been told in fewer pages, it’s chock-full of tales of hustle, determination, greed, ego, intelligence, big bets and the chase for big bonuses. It also reveals the complexity of the world’s economic system and financial markets; how relationships and power struggles at this level can swing billions, if not trillions; and how even the smartest people can, and often do, get it wrong.

Lawrence McDonald, a confused kid from a broken home, steadied his ship and set a goal to work on Wall Street after graduating from college in 1989 in the middle of the pack at a middling university. Despite exerting an almost impossible-to-believe effort to secure any job at all on or near “The Street,” he failed. Plan B was to follow the advice of the only investment banker willing to talk to him: Take any sales job you can find and demonstrate an ability to sell. So he took a job selling pork chops door to door. Yes, pork chops. As in the other white meat.

He went at it as if his very life depended on it and soon became the #1 pork chop salesman on the East Coast. Then with this one bullet point of experience on his resume — one that showed an ability to sell — he again knocked on the doors of investment banks. This time, he landed a commission-only securities sales job for a god-awful, hard-selling, cold-call-out-of-the-phone-book “boiler room” operating hundreds of miles from Manhattan. He again worked day and night with near-maniacal determination, built a little book and earned some money. He obtained his securities license and developed a love and passion for convertible bonds (“converts”). It was 1997 and no online services offered information on convertible bond issues, so he quit his job and started www.convertbond.com with a friend.

Once again, working day and night and using creativity, ingenuity and a willingness to break through any and every barrier, rule and unwritten law that was in his way, he and his buddy built and then sold www.convertbond.com for a tidy profit.

With his new bit of street credit, documented sales ability and Series 7 certification, he cashed in on a boyhood relationship he’d worked hard to maintain and nurture. The result was a low-level job on the bond trading desk with one of the top investment banks on The Street — Lehman Brothers. Little did he know that the seeds of the firm’s demise were already planted.

McDonald spent four years at Lehman Brothers, 2004 through 2008, rising to become a successful and respected bond trader. He became familiar with the inner workings of the firm and as he studied the financial markets — particularly the bond market — he saw reasons for concern. He listened to concerns expressed by others he respected in the firm, and even did some gumshoeing, making a firsthand assessment of the residential mortgage origination process and of the true credit quality of residential mortgage-backed securities. Lehman had hundreds of billions of dollars of exposure to them, and the top brass was operating under the assumption that their quality was good as gold. But McDonald and others had reason to believe otherwise and, if they were right, the firm’s very existence was in jeopardy.

Lehman was operating with incredible amounts of leverage — 40+ times debt-to-equity — and with a concentration of assets in commercial real estate and residential and commercial mortgage debt to boot. But despite repeated and multi-point warnings, Lehman Chairman and Chief Executive Officer Richard S. Fuld, Jr. and President and Chief Operating Officer Joseph Gregory spent most of their time secluded in their penthouse offices, unwilling or unable to converse with the troops or give any credence to repeated pleas for a course change. Fuld and Gregory were instead focused on becoming the largest investment bank in the world, on competing with the likes of Goldman Sachs and Blackstone Group, gaining title to the world’s most prestigious real estate assets, founding and investing in hedge funds, being the leader in mortgage securitizations, and manufacturing continuous revenue and profit increases.

There are many themes and lessons in A Colossal Failure. Not surprisingly, greed, selfishness, ego, excess and foolishness. Also covered are the complexity of the financial markets and the dilemma of what to do when a firm becomes too big to fail but also too large to bail out. And then there is what to do about the fact that large, public companies such as Lehman are run by boards of directors who are simply members of a mutual admiration and support society with the CEO and president.

When a bank becomes impossibly large and complex and sparingly regulated, tremendous power is concentrated in the hands of a few. Bad things can and do happen. Lehman Brothers — one of the largest investment banks in the world — more than 100 years old and with nearly a trillion dollars of equity — evaporated — added fuel to the fire already burning in worldwide financial markets, resulting in an inferno that nearly enveloped the entire modern financial system.

The first step in preventing it from happening again is, of course, understanding what happened.

Reviewed by David L. Perkins, Jr.

Life is a struggle. Why so much violence? Hurt? Poverty? Deception? Greed? Delusion?

What is it, you say? Why focus on the negative when there’s so much good all around?

True, our world is also filled with love, health, hope, care, generosity, sanity. All of these rest — at least in part — on our ability to hold tight to the “good” that is and is possible. But is there also value in acknowledging the “bad?” Is there value in, at least on occasion, viewing the underbelly and pondering why it exists in such abundance?

Ignoring it does not make it go away. If we all just “focus on the positive,” would we have social workers? Homeless shelters? Psychologists? Doctors? District attorneys? Prisons?

My most recent gaze into the abyss was compliments of an employee who swindled me. Six figures’ worth. This guy was G.O.O.D. good. He worked me over like I was a mental midget.

Nothing saps your energy like getting scammed, you know? Like getting taken advantage of? It makes you question everything — your instincts, intellect, friends, work, maybe even your creator. Why is evil allowed to exist, seemingly flourish and often win over the diligent, caring and just?

A compassionate friend gave me a copy of a book titled The Sociopath Next Door. “One in twenty-five ordinary Americans secretly has no conscience,” the cover reads. These people “can do anything at all without feeling guilty.”

I read it. It helped.

The Sociopath Next Door was written by a clinical psychologist who served for 25 years on the faculty of the Department of Psychology at Harvard Medical School. She apparently has spent her life studying and working with sociopaths, psychopaths and their victims.

What You Need to Know

There are people in our world, lots of them, who are very different from you and me. They look normal and even act normally in most ways, but most definitely are not. They have absolutely no conscience. They are incapable of basic feelings of care, love and compassion. They are not this way by choice, rather they are born this way, wired this way. They are not bound by the same rules that govern our lives: rules of fairness, respect, honor and commitment. Much to the contrary, they want only for themselves.

Sociopaths can and do lie artfully and consistently to get what they want, which is basically wealth, ease and/or simply the pleasure of removing from you those things they wish they had and envy in you (such as true friends, self-respect, trust and faith).

Fail to recognize that these people are around you — at work, at school, in your neighborhoods and your homes — and you will fall victim. They will take hold of you and rob you of things you hold dear. They will use your sense of moral obligation, commitment and compassion against you to get what they want from you.

How to Spot the Sociopath

Apart from knowing someone well for many years, there’s no foolproof decision rule or litmus test for trustworthiness. You must

acknowledge this fact.

Also, spotting the sociopath is very difficult. Even experts have a hard time. Sociopaths do not look like criminals or crazy people. More typically, they’re charming, well-dressed and well-mannered. They cloak themselves in respectability, tend to seek positions of authority and are deft at appearing kind and interested in you.

According to Dr. Stout, the most reliable way to spot the sociopath is the pity play. That is their appeal for sympathy, typically using tears.

Another good clue is righteous indignation. When these people sense you may be onto them, they scold you for questioning. Accuse you of being uncaring, uncompassionate and unaccommodating.

How to Avoid the Sociopath

Sociopaths have no guilt or shame, and so easily dupe us because of our faulty belief that all people have a conscience. That is, we naturally assume that people are all like us. And so, we are unable or unwilling to believe that a person near us could act without conscience. We repeatedly endure illogical, insensitive, cruel and selfish behavior by telling ourselves that the perpetrator is sick or having difficulty and in need of help. Or better yet, we allow them to convince us that we are the reason that things are this way. Either way, we end up helping them and/or tolerating them.

But sociopaths DO know they are different. They know they have no regard for the social contract, but they keenly know how to use it to their advantage.

What You Can Do About It

The best thing you can do is refuse to tolerate repeated instances of insensitive, selfish and/or cruel behavior. Once, okay. Twice, maybe. Three times, see ya later. Detach and get them out of your life.

Dr. Stout says: “Pity and sympathy are forces for good when they are reactions to deserving people who have fallen on misfortune. But when these sentiments are wrested out of us by the undeserving, by people whose behavior is consistently antisocial, this is a sure sign that something is wrong.”

Keep in mind, sociopaths are not curable and there is no end — and will be no end — to their neediness and usury. So don’t waste your time. Don’t waste your life.

Moreover, when you observe a sociopath influencing many for ill, stand up. Studies show that, especially when the maniac is in a position of authority, most people will remain quiet. Think Hitler. Remember, Albert Einstein once said:

“The world is a dangerous place to live, and not because of the evil ones, but because of the people that don’t do anything about it.”

Re-image! By Tom Peters

I first read Re-imagine! in 2007 just after it was published. I picked it up again the other day. I did so because Re-imagine! is about “Business Excellence in a Disruptive Age” and the world economy has – I think it is fair to say – crumbled. There’s chaos everywhere. The ultimate catalyst that caused me to pick up the book again was a call from an old friend of mine. She said, “Perk, ah, you’re not going to like this, but I think I’m in big trouble here.” She was talking about her business of 60 employees. She doesn’t think she can make it anymore, facing possible bankruptcy and personal financial ruin because she personally guarantees the debt.

Tom Peters, widely recognized as one of the greatest business writers and thinkers of our generation and author of In Search of Excellence – possibly the #1 business book of the past 25 years – wrote Re-imagine! after the dot-com bust, 2001 terrorist attacks and well after President George W. Bush’s proclamation of “the end of major combat operations” in Iraq (i.e., right before we realized that we might be in over our heads).

Peters explains that he is “mad as hell” about our dysfunctional governments, military, corporations, etc.

Well, I wonder how he feels now?

I’ll bet he’s madder than hell. But that’s not the point.

Re-imagine! is right on target for you and me. Tom Peters passionately explains that “in this age of disruption,” when businesses rise and fall in years instead of decades, and a band of loosely connected people with cell phones and a few $3 box cutters can evade the $500 billion U.S. defense infrastructure and take our country to its knees (i.e., “9/11″), the conventional will surely die. Times are different. Status quo is gone.

This is not an economy or a time when status quo is going to do much for you or me or anyone. Peters includes many great quotes, one of which is:

“    If you don’t like change, you’re going to like irrelevance even less.”
General Eric Shinseki, Chief of Staff, U.S. Army

Re-imagine! speaks to me today even more than it did two years ago.

First, with chaos there’s opportunity. For example, I have a consulting client whose #1 competitor just failed. My client purchased the assets of that company for a fraction of what it would have cost just a year ago. The result for my client will be higher volumes and significantly greater pricing power. To be sure, my client is taking SOME risk by spending more on his business, but the odds are it’ll pay off big time. He does not have his head in the sand. He’s letting chaos play into his hand. He’s ready and willing to watch for opportunity, take risk and attempt to craft a new reality.

Most of us are not the dominant players in our industries. When status quo reigns and everyone is making money, what are the odds of dethroning the dominant player? The more likely scenario is to allow change, a disruption, to weaken the big boys, and therein is our opportunity to do things differently. Do things better. Do things smarter. Or just do things a lot cheaper so that we are able to survive the bad times when others cannot.

Second, today’s economy is about intangible assets. It’s not about control of the land, or bricks and mortar, or commodities, or “factors of production.” It’s about ideas, creativity, innovation, speed, focus, branding, image, etc. As such, brainpower wins, and business owners must attract, retain and empower smart people who are creative, innovative and at the forefront of technology.

Third, radical and rapid advances in information technologies drive ever-expanding opportunities to innovate and differentiate. As a business owner, you have a choice. Either stand by and allow others to innovate and eventually render you obsolete, or become an innovator and render others obsolete. Of course, nobody really knows which innovations in method, process or organization will be viable. Which ones will resonate or add and build value? So the key is rapid innovation. Trial and error. Willingness to fail and “look stupid.” It’s these people, organizations and businesses that will find breakthroughs, and survive and thrive.

Of course, Tom Peters has a heck of a lot to say in Re-imagine! A lot of lessons for you and me. It’s not a book that you sit down and read in a day or two, or even a week. It’s weighty. Disruptive to your thinking. By design, I suspect.

To my friend whose business is failing, I say, “Fight like hell. I’ll help.” Survival is all it’s about today. But if failure happens, the phoenix WILL rise again. We’ve all experienced failure. So often, we come to realize that it was what was supposed to happen. We would not change it. It’s natural. We become transformed into something better. More appropriate. More comfortable. Trust, and know, my friend, that there is a bright future ahead for you. It’s the mystery of life.

Reviewed by David L. Perkins, Jr.

Ever said to yourself, “Why in the world did I do that?” Of course you have. After all, as Roman Catholic Cardinal Melchior De Polignac declared, “Errare humanum est (to err is human).”

But why do we behave in ways contrary to our own self-interest? Why, when we place so much pride in our ability to be rational and prudent, do we at times behave with such irrationality?

Why does a billionaire oil executive and commodities trader double down on trading losses again and again until all is lost? Why do NASA scientists ignore data that clearly show O-rings fail?

According to the Brafman brothers – as described in the book – we simply fall prey to one of a handful of “psychological forces that derail rational thinking.” The promise of the book is that, if we can become aware of them, we might be better able to avoid falling victim. And so Sway is filled with incredible stories about smart and successful people that, the Brafman brothers contend, fell victim to one of the “sways” … with disastrous consequences. I suggest that you pick up a copy. It’s a fascinating read that just might help you avoid disaster.

Sways That Derail Rational Thinking

Diagnosis Bias:

We make hasty judgments about people and things based on limited, subjective information, and then holding too tightly to our judgments (though they were formed from weak and/or incomplete data), accepting only information that conforms to our established views. Diagnosis bias is powerful and prevents evaluating new information objectively. When we label people, they tend to take on the characteristics of our “diagnosis” (the chameleon effect). The solution is to be open to new facts and ideas.

Commitment Bias:

Irrational loyalty to an old strategy that was previously successful (staying the course) is not in our best interest. Some catastrophic airplane crashes have been the result of pilots’ commitment bias. They focus on on-time arrivals and departures, ignoring warning signs and safety factors. Businesses fall prey to confirmation bias, too. But they need to step back from projects and ask, “If I were just arriving on the scene and reviewed the facts, is this solution the rational one?”

Loss Aversion:

We go to great lengths to avoid loss. Sometimes our desire to avoid loss causes us to act irrationally. Car rental companies prey on this by getting us to buy additional “damage waiver” insurance. Phone companies try to get us to accept flat-fee service to avoid the risk of getting a surprise bill. Loss aversion combined with commitment bias is a powerful force that has led many to their financial grave. It’s the investor who watches his entire stake slowly evaporate for his inability to accept defeat and change course. It’s the gambler who keeps doubling down to catch up. The solution is to focus on long-term goals.

Value Attribution:

We tend to imbue people and things with the qualities of their presentation or surroundings. It’s why packaging matters so much. It’s why Mercedes dealerships are spotless, spacious marble palaces. But context clouds our ability to see real attributes. We may turn down a pitch or idea presented by the “wrong” person, or blindly follow the advice of someone we highly regard. Similarly, our expectations of “context” influence our assessments. Value attribution bias hinders our ability to objectively assess value. Studies show that the price we pay for a ticket affects our enjoyment of the performance. So make a conscious effort to see things for what they really are and not just how they appear to be. Differentiate between “packaging” and real attributes. Initial impressions can be wrong.

Procedural Bias:

We tend to emphasize process and procedure instead of product or outcome. This makes us susceptible to irrational decisions if the process meets our needs or expectations and diverts our attention away from the actual value of the product or service or outcome. Try to recognize when “process” is influencing your perceptions. Try not to lose sight of what you want to get as a final product.

Group Conformity:

We like conformity. When a group reaches consensus, members of the group feel pressure to “go along to get along.” This can lead to irrational behavior such as groupthink. The good news is that a single dissenter can help the group break out of groupthink and make more rational decisions.