Corporate-finance

John Bacon's AMERICA'S CORNER STORE is a world-class story about a world-class business and the businessmen and women behind it. It is one of those histories that goes well beyond the subject at hand to paint a picture across a huge canvas of American history and does so with great attention to detail and the ability to bring its characters and settings to life. It reminded me in some ways of SEABISCUIT---both are stories about subjects that wouldn't normally grab my attention. But because of the writer's skill, this book is also a must-read---if for nothing more than the wonderfull little facts you learn along the way: that the milk shake was invented at Walgreen's; that the Walgreen chain understood that excellent customer service begins with excellent employee-relations decades BEFORE the age of CRM! Bacon is the author of a terrific history of University of Michigan hockey program, BLUE ICE, and this is a great follow up to that book. Read them and see if you don't agree!

The impact that a corner drug store can have on America is simply astonishing. Anyone interested in the last hundred years of American history will love the book. There are also plenty of valuable business lessons to be found within the pages. A great read, John Bacon does a great job of bringing to life one of the most storied retail enterprises in the history of business.

In "America by Design", David Noble argues that the rise of technology is synonymous with the rise of corporate capitalism in America. Focusing on the period roughly between the 1880s and the end of the 1920s, the book examines how the discoveries of science began to be systematically applied by the "useful arts" of manufacturing for the purpose of increasing productivity and profits. This birth of technology began the process of a gradual change in America as the early corporate capitalists attempted to establish 20th century routine along lines that would satisfy the needs of the new "science-based" industries. As Noble chronicles the activities of these men (including Henry Pritchett, Hollis Godfrey, Frank Vanderlip, and Charles Steinmetz among others), I felt like he considered the history of American technology to be nothing more than a capitalist conspiracy to gain dominance of American society. Interestingly, however, Noble tells the reader at the outset that having a "consciousness of purpose" as these men had is not the same as a conspiracy. He unfortunately failed to explain why.

Noble tells us that technology is not the driving force behind social change. Rather, technology merely offers the possibilities that are available; it is up to society to determine which of those possibilities are necessary for its own development. In this regard, a major theme of this book is the emergence of the engineer - that specialist who was able to reconcile the possibilities offered by science with the needs of corporate capitalism. The book describes the early efforts of these engineers to professionalize their status so that they could gain a monopoly over technological knowledge. As a result, from the beginning, progress in technology took on a distinctively corporate appearance. Unlike other professionals such as doctors and lawyers, however, the engineer was a "corporate animal" who did not have a professional identity beyond the corporation that employed him. Noble describes the uncertainties experienced by these early engineers as they attempted to find their new identity in American society.

As the first generation of science-trained engineers climbed the corporate ladder into the ranks of management, management itself took on a scientific appearance. The book describes the evolution of modern management with its emphasis upon using psychology and the other social sciences to control the behavior of the worker. It was at this stage that the engineer turned from "the engineering of materials" to "the engineering of men".

All in all, "America by Design" offers the reader a lot to think about. I will say that some parts of the book were a bit confusing to read, primarily because of the "alphabet soup" of councils, committees, associations, and societies that David Noble threw in to chronicle the organizing activities of the corporate reformers. Despite this, however, the book was still an eye-opener. I learned that a lot of things that I used to take for granted in our society were actually deliberate creations of men who had a "consciousness of purpose".

Jeffrey Bezos, Time's Man of the Year 1999, and the business model that he has promoted, undoubtedly deserved having a book written about "the Amazon way". Mr. Spector's book is a typical example of the "success story" literature: he describes the now well-known entrepreneurial setting where it all started - the Seattle garage, and also the famous trip to Seattle, with Mrs. Bezos driving the car while Mr. Bezos was drawing up a business plan on his laptop computer. And, aside from this slightly nostalgic account, Mr. Spector also outlines a few of the key developments of Amazon's business model. He describes how the company gradually evolved from the "all-virtual-no-inventory" myth of electronic commerce to a well-established merchandising operation, with a few centralized warehouses covering the entire US territory. However, Amazon doesn't work like a traditional retailer, since it doesn't run any physical storefronts. Other business developments described in the book include: the company's perpetual quest for reinventing itself, for adding more interesting features to its Web site, in an attempt to entertain its customers and create what is sometimes called "stickiness" (i.e. customer retention) - such features include personalized recommendations, customer online reviews, and "1-click shopping"; the creation of a true one-stop shopping establishment, where customers can find anything they might want to buy online - this can be accomplished through the Amazon Auctions, zShops, and more recently the Amazon Marketplace; the company's aggressive strategic investment campaign of 1999, when it acquired stakes in several dot.coms (some of which, it must be said, have not performed so well). Mr. Spector's book is a good starting point for getting acquainted with the nuts and bolts of the biggest online retailer in the world. However, one must acknowledge and add to that the profound transformations the company is perpetually undergoing. Amazon has become a true household brand, enjoying a very high level of awareness among consumers; it has about 29 million customers; and - to appease skeptics - it hopes to achieve overall operating profitability by the fourth quarter of this year. The truth is, one can hardly succeed in offering an exhaustive account of such a dynamic business model. This is probably one of the reasons why Mr. Bezos told Mr. Spector that it was "too early for a book".

The most telling detail on Amazon in this book was on page 132: When publishers and authors asked Bezos why Amazon.com would publish negative reviews, he (said) Amazon.com "was taking a different approach, of trying to sell all books...the good, the bad, and the ugly...doing that, you actually have an obligation...to let truth loose.'"

Whichever publishers and authors those were, they epitomize the sort of thinking that a new business model sweeps away. When someone responds negatively to their product they seek to silence that person. Failing that, they repackage the same product. If that doesn't work, they rename the product. Then they present the product in a different size. Anything, abosolutely anything, but listen to the customer who gripes.

I don't think Spector grasps the depth of this change. When Amazon gives a forum to ordinary people to speak where previously only "professionals" could, that's as profound a shift as from monarchy to democracy. Giving equal space on the electronic bookshelf to an arcane book on geology and a convenience store bestseller is as revolutionary as Martin Luther's 95 theses getting equal billing with the pronouncements of the pope. In terms of sales, if I can buy what I want instead of just what the "professionals" want me to buy, I'm going to buy more.

Most of the other factors in Amazon's success have been done before: hiring smart people, working long hours, providing great customer service...but no other retailer ever had a selection larger than the Library of Congress. And no other retailer ever gave customers around the globe a public forum for feedback. I would have liked to have seen more on this unique aspect of Amazon in GET BIG FAST, and less of the sort of business school platitudes that make up the "Takeaways" sections at the end of each chapter.

This book is a good introduction to Amazon and some of the basic philosophy behind the company. For those interested in establishing an e-commerce company it makes helpful reading, especially if our current knowledge of the technology is limited. Unfortunately the author did not interview Jeff Bezos and therefore much of the information was already in the public domain.

My criticism of the book is two fold. First there appears to be little or no information on the problems of establishing the technology and learning how to offer a customer centric service. As a long time customer of Amazon I for one have seen dramatic improvements in the customer service model; for instance allowing customers to consolidate orders and requesting part vs. full shipment are changes made after the first few years of trading. I think that a detailed analysis of these kinds of issues would have been really helpful.

Second the author appears to accept the business model that Amazon have developed - huge losses aimed at long-term market position without question. I would have liked a little bit more on the view expressed by Barnes and Noble that they don't want to win a hollow victory - owing the market and the losses.