Thinking Inside the Box: The 12 Timeless Rules for Managing a Successful Business

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9780743235754: Thinking Inside the Box: The 12 Timeless Rules for Managing a Successful Business

For the past decade and more, everyone in business was told that success in a rapidly changing world required constant "thinking outside the box." The result has often been financially and ethically disastrous. Now, in a radical reassessment of what really works, this book shows that the business world lost its way when it forgot how to think inside the box. Challenging the prevailing wisdom and trend-of-the-minute management advice, award-winning journalist and international businessman Kirk Cheyfitz lays out a set of historically proven principles he calls "The Box" -- the 12 unchanging rules for building, expanding, and maintaining a strong business. Everyone with an interest in business -- whether students, entrepreneurs, corporate managers, consultants, or CEOs -- will benefit from the brilliant and fundamental insights of Thinking Inside The Box:

· Learn to tell the difference between what can and cannot be controlled by management, and focus on the areas that will make the most difference.
· Understand the economic principles that never change so you can devote your attention to the things that are changing all the time.
· Rediscover the critical discipline of planning for profit.
· Understand why some acquisitions work and most don't.
· And much more...

The book draws on in-depth research, Cheyfitz's long personal experience as an entrepreneur and corporate manager, and revealing interviews with business leaders such as Microsoft CEO Steve Ballmer and Prudential Securities CEO John Strangfeld. Combining these elements, Cheyfitz presents a compelling, reliable, and well-documented account of successful business practices that have met the challenges of the ages. With a practical approach and carefully documented examples, Cheyfitz mercilessly exposes the hype and inaccuracies of so-called business gurus preaching the need for constant "revolution" in business.

From its very first words -- a preface titled "Don't Do Anything Stupid" -- to its very last, Thinking Inside The Box demonstrates that the only way to think outside the box productively is to learn each plank in The Box and practice it daily. For the first time, a book explains what the dot-com crash, the telecom disaster, the Enron collapse, and all the myriad, multibillion-dollar business catastrophes of the last decade have in common -- a total lack of regard for (or complete ignorance of) the basic rules of business. Here, finally, is the indispensable book that shows managers and investors where to find the path to enduring success again.

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About the Author:

Kirk Cheyfitz An award-winning reporter and successful businessman, Cheyfitz has built the world's first and largest global custom publishing network for McCann-Erickson WorldGroup, the world's largest advertising agency. After only four years, The Publishing Agency International has full-service companies in New York, Amsterdam, Brussels, London, Madrid, and Seattle. Cheyfitz was a Pulitzer finalist for investigative work at the Detroit Free Press and won the prestigious Sigma Delta Chi Bronze Medallion for investigative reporting, among many national and regional journalism honors. He started a city magazine in Detroit in the mid-1980s, making a seamless transition from journalist to self-taught entrepreneur. Next he acquired Chicago magazine and built a publishing division with some 1,200 employees and more than 20 operating entities. Cheyfitz lives on Manhattan's Upper West Side with his wife, Ellen, and daughter Amy.

Excerpt. ę Reprinted by permission. All rights reserved.:

Preface: Read This First

Don't Do Anything Stupid

By early 2002, many of the world's major media companies (along with quite a few telecommunications companies, investment firms, and various other businesses) were in big trouble. Vivendi Universal, AOL Time Warner, and Bertelsmann all ousted top managers after suffering disastrous reversals in market value. It was during this dismaying period that Mel Karmazin, president and COO of media giant Viacom, devised the most reassuring message he could muster to calm the fears of his jittery investors.

Karmazin's message contained none of the ideas that had set the business world on fire during the previous decade. It was not a pledge to change relentlessly with changing times, or a hymn to thinking outside the box, or a nod to the revolutionary power of technology, or an invocation of the godlike qualities of his CEO. Instead, displayed bravely on the T-shirt Karmazin wore for a conference call with his big institutional investors was the promise: "We won't do anything stupid."

As modest as it was, no message could have been more welcome and appropriate in the post-new-economy agony of the time. Simply by avoiding stupid moves, Karmazin and his boss, Sumner Redstone, Viacom's chairman and controlling shareholder, had steered the corporation into the top spot among media conglomerates. In mid-2002, Viacom -- owner of such leading entertainment brands as Paramount, MTV, CBS, Blockbuster Video, and Simon & Schuster (the publisher of this book) -- was the most valuable media company on the planet, mostly because it had avoided expensive gambles on unproven fads.

During the 1990s, Viacom turned down the opportunity to pour money into countless Internet-based start-ups, and Redstone turned away the hyper-expensive America Online deal that Time Warner later swallowed, much to its shareholders' ultimate regret. In short, Viacom stuck to the tried-and-true basics of its businesses, and Viacom's managers kept their thinking firmly inside the box.

In undertaking the research for this book, I found it impossible to avoid the conclusion that much of the business world essentially lost its head during the 1990s, making a series of moves so stupid that it seems -- in retrospect, at least -- they should have been obvious to anyone. It is clear that this recent stupidity was both a reprise of past stupidity and a total failure to heed the lessons of commercial or human history. Almost without exception, the biggest errors were based on the notion that the foundations of sound business were being radically altered by technological and social change. But that notion, which has been briefly entertained by virtually every generation of humanity, has always proven to be a monumental overstatement. This latest time around was no exception.

Consider for a moment the groundbreaking work of Herbert A. Simon, one of the twentieth century's outstanding economic thinkers. Born in 1916 in Milwaukee, educated in the public schools, Simon found himself during the Great Depression at the University of Chicago, where he latched onto the notion that would form the center of his life's work: "The social sciences, I thought, needed the same kind of rigor and the same mathematical underpinnings that had made the 'hard' sciences so brilliantly successful," he wrote years later. So he set about training himself to be "a mathematical social scientist." An undergraduate term paper on decision-making in business organizations led to graduate work on the same topic and then to a research fellowship at the University of California at Berkeley. As one culmination of his research, Simon published a book in 1947 titled, simply, Administrative Behavior, which created a firm foundation for understanding the complex ways in which decisions are made inside corporations and other "economic organizations." When the Royal Swedish Academy of Sciences explained in 1978 its reasons for honoring Simon with the Nobel Prize in economics, it cited Administrative Behavior, calling it an "epoch-making book."

The ideas expressed in Simon's work are fascinating -- he rejects the notion of the omnipotent CEO and replaces it with a model of multiple decision-makers limited by their knowledge and their loyalties. But what is even more fascinating is the unwavering persistence of his ideas. Writing the introduction to the fourth edition of Administrative Behavior, which was published on the book's fiftieth anniversary, Simon has this to say: "In this fourth edition, as in the previous ones, the text of the original work is kept intact, for there is essentially nothing in it that I wish to retract."

As Simon explains, his book hasn't changed in more than half a century because people and the way they make decisions haven't changed. "Human organizations, quite large ones, have been with us for at least four thousand years," he writes. "Although the physical technology a modern army employs is wholly different from the technology employed by the armies of Nineveh or Egypt or X'ian, the processes people used in these ancient armies to make decisions or to manage people appear quite familiar to us and largely unchanged over the centuries."

It is the premise of this book that, in business, the recurring disenchantment with so-called old ideas is completely misguided; the search for some revolution that will change everything is essentially wasteful; the relentless insistence on "thinking outside the box" is wrongheaded.

I began this book with the conviction that we can't think outside the box or even inside the box unless we have a very precise idea of what the box is. A look at business past and present reveals the existence of certain unchanging, timeless rules -- the rules that I collectively call "The Box." Among the planks that make up The Box, for example, are the millennia-old rules of organizational decision-making uncovered by Simon. Ignoring the established rules of The Box is neither innovative nor entrepreneurial nor revolutionary. It is, to borrow a word from Mel Karmazin's T-shirt, stupid. Plain and simple.

The welcome corollary of this premise is that there is no substance to the myth of the Oz-like CEO. Managing an enterprise requires neither genius nor constant invention (let alone reinvention). Rather, good management largely consists of paying attention to history and present reality while applying hard work and prudence. This is the gospel of business -- that management is a set of skills to be learned, not a matter of divine inspiration or magical foresight, and that the list of requisite skills has been consistent over a long period of time. Given the right set of rules, we can all manage from one quarter to the next, providing something useful to society and making a reasonable profit in return, while avoiding doing too much that is stupid. That's what this book is about.

Copyright © 2003 by Kirk Cheyfitz

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