The Best Business Books Of The Year

What a difference a few years make! In 1989 and 1990, BUSINESS WEEK's annual list of the year's best business books was dominated by juicy corporate tell-alls in the spirit of Barbarians at the Gate and Liar's Poker. But the more sober era we're living in is already being reflected in books, it seems.

In 1993, the business books embraced by our reviewers--staff members from all parts of the magazine's international network of writers and editors--cover a range of categories: management guides, industry analyses, biographies, attempts to unravel scandals. But about the whole list, there's a new, more pragmatic and austere quality. A certain raucousness, cynicism, and glee--whether on the part of over-the-top dealmakers or the authors eagerly exposing them--have vanished.

In any era, it would be hard to turn a buzzword such as "reengineering" into compelling reading. Still, it's the key management trend of the day and has inspired a spate of books--many of them ponderous and jargon-laden. Not so Reengineering the Corporation: A Manifesto for Business Revolution (Harper Business), said our reviewer, Senior Writer John A. Byrne. Written by the originators of reengineering--former Massachusetts Institute of Technology computer-science professor Michael Hammer and James Champy, chairman of CSC/Index Inc. in Cambridge, Mass.--Reengineering is succinct and well thought out. It explains how radically rethinking and redesigning business processes--often with an assist from better information technology--can produce quantum improvements in speed, costs, and quality.

The book provides the how-to information that managers need, as well as detailed case studies delivered in the words of managers who have led major reengineering efforts at Hallmark Cards, Taco Bell, Capital Holding, and Bell Atlantic.

The other trend on managers' minds these days is teams. In fact, interest in the concept has been fueled by reengineering, which calls for setting up interdisciplinary teams to tackle tasks. Leading business thinkers believe that by melding the skills and insights of several people, teams can outperform any


The Wisdom of Teams: Creating the High-Performance Organization by Jon R. Katzenbach and Douglas K. Smith (Harvard Business School Press) is an engaging primer. To explore how to form teams, lead them, and get them to work, Katzenbach and Smith, consultants at McKinsey & Co., interviewed hundreds of team members in dozens of companies, including Citibank, Eli Lilly, and Hewlett-Packard.

In addition to identifying the elements common to successful teams, the authors dissect failures. Said reviewer Byrne: "You'll be hard-pressed to find a better guide to forming what many consider an essential building block of the 'organization of the future.'"

The organization of the future was a preoccupation of more than one author in 1993. In Collision: GM, Toyota, Volkswagen and the Race to Own the 21st Century (Doubleday), automotive analyst Maryann Keller examines what the world's top carmakers must do to compete after the millennium.

Breaking with conventional, nationalistic thinking, Keller defines a new Global Big Three--GM, Toyota, and Volkswagen. Each, as it happens, is currently facing problems born of size and complexity. Each must remake itself to survive in the unfamiliar world of saturated markets and borderless competition. Each, Keller says, is standing at "a crossroads between the past and future where daring actions will be required."

Much of Collision details how corporate culture and nationality have shaped each company's woes. Our reviewer, Bonn Correspondent Karen Lowry Miller, found the book's great strength to be Keller's portrayal of the players, rich in personal detail and delivered with "biting, even brutal, honesty."

Keller outlines four criteria to determine how ready her Global Big Three are to face the future. Intimate knowledge of GM (her previous book was Rude Awakening: The Rise, Fall and Recovery of General Motors) may have influenced her conclusion that GM is the one best poised to prosper. No matter. What counts, Miller concluded, "is that she is asking the right questions."

Another forward-looking industry analysis is Computer Wars: How the West Can Win in a Post-IBM World by Charles H. Ferguson and Charles R. Morris (Times Books). The work "presents a cogent, technically savvy history of IBM's business since the mid-1960s," in the words of Information Processing Editor John W. Verity. It then uses that history to analyze how U.S. computer companies should compete.

The authors argue that IBM's top executives lost their way--or, more significantly, their nerve--as early as the 1970s. They begin with the oft-told tale of how IBM "bet the company" on its System/360 mainframe family in the mid-1960s. They also tell the largely unknown story of how IBM began work on an entirely new, more powerful design code-named Future System, or F/S, in the early 1970s and became so distracted that it missed a generation of development on the 360, giving a leg up to clonemakers. "F/S was IBM's own quiet Vietnam," the authors write. After F/S, "a status quo mind-set" took hold.

Ferguson and Morris use IBM's story to argue that establishing and controlling an architectural standard is the only way to compete in computers. U.S. companies, they suggest, should focus on technical vision and design, leaving mass production to the Japanese.

Even more compelling than the future of the computer industry is the question of how computers are reshaping our future. There's much talk about the electronic information superhighway these days, usually focusing on the ability to offer consumers video-on-demand and home-shopping services. But in The Virtual Community: Homesteading on the Electronic Frontier (Addison-Wesley), Howard Rheingold argues that many, many people would rather use this technology to connect with others than simply to avoid a trip to the video store.

Just published and yet to be reviewed in these pages, Rheingold's book depicts advanced communications technology as a means by which ordinary people can bypass the big media and have in-depth conversations with others around the globe. It traces the history of "the Net"--an amalgam of electronic bulletin boards, on-line information services, and computer conference sessions through which millions are already connecting to conduct business, spill their guts, flirt--you name it.

While telephones are essentially a one-to-one medium and television a few-to-many medium, says Rheingold, the Net marks the beginning of many-to-many communication. Former Staff Editor Evan I. Schwartz believes business leaders, policymakers, and concerned citizens will enjoy this readable exploration of life in cyberspace.

Few events in the history of the U.S. economy match the magnitude of the collapse of the savings and loan industry. Several books have probed the roots of the debacle. The best to appear in 1993 is S&L Hell: The People and the Politics Behind the $1 Trillion Savings and Loan Scandal (Norton).

If there's a shortcoming to Kathleen Day's "admirable reporting effort," said Washington Correspondent Dean Foust, "it's her inclination to reconstruct the S&L disaster as a morality play," blaming losses on "avarice, fraud, and incompetence," while overlooking structural problems that made the disaster nearly inevitable. Still, admirably reported it is: Day relies on her years spent covering thrifts for the Washington Post to provide a behind-the-scenes look at how Washington mishandled this orgy of speculation. Her portraits of legislators and regulators whose cozy ties to the S&Ls blinded them to the gathering clouds are devastating.

As tangled as the thrift mess is, it pales in comparison with the scandal involving the Bank of Commerce & Credit Inc. When BCCI was shut down in 1991, the reported losses were $20 billion or more. The bank was linked to the CIA and a roster of terrorists and world-class sleazeballs. Like the S&L mess, BCCI has inspired numerous books, but the story is so complicated as to be all but impossible to follow.

To the rescue came Jonathan Beaty and S.C. Gwynne, Time magazine reporters who helped break the story with The Outlaw Bank: A Wild Ride Into the Secret Heart of BCCI (Random House). They turned the tale into a good read by crafting their own reporting quest into a thriller. Their search led them into the world of spies, arms dealers, and drug traffickers where BCCI thrived. The book, said International Outlook Editor Stanley Reed, "evokes an aura of paranoia and seaminess."

Beaty and Gwynne do a marvelous job of tracing the origins of BCCI, the brainchild of a silver-tongued Pakistani banker, Agha Hasan Abedi. In 1972, Abedi persuaded Abu Dhabi's Sheik Zayed to bankroll his plan for a Middle East-controlled multinational bank that would break the hold of Western financial institutions on the developing world.

When the 1973 embargo quadrupled oil prices, BCCI became the bank for Arab tycoons and for millions of Third World expatriates who flocked to the gulf to work. With the help of underlings who used bribery, money laundering, and even procuring to win over clients, Abedi expanded into some 70 countries. BCCI's unscrupulousness made it the bank of choice for arms dealers, the drug trade, and spy agencies.

Even after the bank became illiquid in the early 1980s, Abedi kept his Ponzi scheme going for some time--with the bank's complex structure obscuring the scams. The Outlaw Bank leaves the impression that with the offshore banking centers Abedi used so effectively still in business, another BCCI could happen. Financial history buffs will savor Ron Chernow's The Warburgs: The 20th-Century Odyssey of a Remarkable Jewish Family (Random House). Chernow, also author of the acclaimed The House of Morgan, has "struck literary gold again" with this lovingly told saga of the German banking family, said reviewer Reed.

The story is both epic and tragic. We see the Warburgs, whose origins Chernow traces to a 16th century pawnbroker, rise to wealth and influence under Bismarck and Kaiser Wilhelm II. But despite their success and patriotism, they were always suspect because they were Jews. Establishment connections couldn't spare the family near-ruin under the Nazis.

Many colorful Warburgs march through the book, but at its heart are five brothers who presided over the family bank, M.M. Warburg & Co., during its glory years and its struggle with the Nazis. Among those who emigrated to the U.S., Paul and Felix became partners in Kuhn Loeb, and Paul emerged as an architect of what became the Federal Reserve System. Chernow brings his tale full circle with the family's reclamation of the rejuvenated M.M. Warburg Bank in Hamburg.

An ambitious and excellent biography of a contemporary business figure is William Shawcross' life of Rupert Murdoch. Media Editor Mark Landler termed Murdoch (Simon & Schuster) "a chronicle of one man's fiery arc through the media firmament."

Shawcross follows Murdoch on his dizzying journey from Adelaide, Australia, around the globe and shows how he cajoled, connived, and bullied his way to ownership of many of the world's choicest media properties. Landler was disappointed that even after Shawcross' lengthy dissection, Murdoch is still enigmatic and contradictory. But Landler decided the paucity of personal insight is itself revealing, concluding that "Murdoch remains an inscrutable figure--an apostle of global communications who is a master of not telling the world what he really thinks."

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