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The Best Business Books Of 1994


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THE BEST BUSINESS BOOKS OF 1994

What's striking about 1994's business books is that so many of them blend useful insights with good writing. About three years back, business books hit a kind of trough: BUSINESS WEEK's reviewers complained that even worthwhile books were repetitive and overlong. Not anymore. The titles that drew the highest marks from our writers and editors this year not only illuminate important aspects of business but are also a pleasure to read. A few, in fact, are downright riveting.

To write The Billion-Dollar Molecule: One Company's Quest for the Perfect Drug (Simon & Schuster), Barry Werth spent four years at Vertex Pharmaceuticals Inc. in Cambridge, Mass. His account of the human drama attending the evolution of a promising startup "has more in common with a John Grisham thriller than with dreary tomes on modern science," said our reviewer, Boston Correspondent Geoffrey Smith.

Chemist Joshua Boger founded Vertex in 1989, vowing to redefine the way drugs are made. The core of his strategy was "rational drug design," an unproven technique that uses computers to build drugs atom by atom. Werth recreates the internal rivalries and the bouts of anger and doubt that beset Vertex employees whenever competitors outpaced them. The Billion-Dollar Molecule, said Smith, "sheds light on the entire biotech industry and the competitive spirit that drives hundreds of small companies trying to develop new drugs."

Another page-turner is Connie Bruck's Master of the Game: Steve Ross and the Creation of Time Warner (Simon & Schuster). The book "sizzles with the vitality of its subject," wrote Media Editor Mark Landler, who called it "a marvelously detailed and remorselessly critical portrait of this most complex and contradictory media mogul." While Bruck focuses on the 1989 merger of Time Inc. and Warner, she gives us the whole life: Ross's Brooklyn boyhood; his early career, redolent of mob connections; the prodigal lifestyle that earned him the sobriquet "the last great pasha of American business."

Master of the Game compels our interest both because of Ross's outsized personality and deeds and because his shadow looms large over the company he created. Many problems playing out at Time Warner Inc. are rooted in the merger deal he engineered. And some observers see his successor, Gerald M. Levin, as struggling to run the company the way Ross did--as a vast, decentralized organization held together by fierce loyalty to the boss. Trouble is, Levin lacks Ross's charisma. Indeed, Bruck's trenchant biography leaves no doubt: Ross was in a class by himself.

Ordinary working men and women take center stage in The Force, David Dorsey's dark portrait of contemporary salespeople (Random House). Dorsey, a Rochester (N.Y.) business journalist, persuaded Xerox Corp. to let him spend a year trailing a Cleveland sales team--one of the company's hottest. His astonishingly intimate book depicts the lives of men and women maniacally driven to meet their annual revenue goals. In Dorsey's vision, though, it isn't targets that propel them. It's the sense that if they surpass their mark, they will be somehow transformed. Their bodies and spirits may break in the pursuit, but each believes this year's success will yield next year's promotion--and a better life.

The Force, wrote Chicago Correspondent Kevin Kelly, contains "finely drawn portraits of suffering, craziness, and triumph." Underlying the book is a sense of a world out of whack. Here are characters so stressed out they can't finish thoughts, their most personal conversations polluted by the jargon of sales. But Dorsey doesn't pity or damn them; he "locates the dreams that drive the team and finds they're not ephemeral." Overall, Kelly concluded, "this is a generous book, laced with amusing touches."

What would life be like without credit cards? It's getting hard to imagine. A Piece of the Action: How the Middle Class Joined the Money Class (Simon & Schuster) is Joseph Nocera's history of the transformation of personal finance that began in September, 1958, when Bank of America mailed out its first 60,000 BankAmericards. Nocera positions the event as the first shot in the money revolution that has given ordinary Americans credit on demand, high interest on savings, and unending investment opportunities.

Nocera chronicles this revolution through the stories of the innovators who fomented it--among them discount brokerage founder Charles Schwab, Citicorp's John Reed, and several fascinating, more obscure players. Senior Writer Jeffrey M. Laderman praised A Piece of the Action as "richly detailed and thoroughly documented."

Although Nocera terms the money revolution "a force for good," he also views it as a source of anxiety. All our new financial options, he says, further complicate our already complicated lives. For helping to reduce the confusion, Economics Editor Michael J. Mandel praised Jeremy J. Siegel's Stocks for the Long Run: A Guide for Selecting Markets for Long-Term Growth (Irwin Professional Publishing).

Siegel, a professor of finance at the Wharton School and academic director of the Securities Industry Institute, "makes an utterly convincing case," wrote Mandel, "that the stock market not only pays higher returns than the bond market but is also, contrary to what most people believe, less risky over time." Siegel's long-range analysis of the pluses and minuses of investing in stocks is especially credible, said Mandel, because he has compiled data going back to the early 1800s.

Comeback by Paul Ingrassia and Joseph B. White (Simon & Schuster) is a remarkably juicy yet substantive analysis of the issues faced by an entire industry. Subtitled The Fall and Rise of the American Automobile Industry, the book describes how each of the Big Three veered toward disaster during the 1980s, then pulled out of the skid. Comeback, wrote Detroit Bureau Manager Kathleen Kerwin, "wraps a dozen years of turmoil into a compelling saga."

To make sense of this tumultuous era, the authors, Wall Street Journal writers, focus on a series of key episodes. Personality struggles, in their telling, drove as many of the Big Three's major initiatives as rational business plans. Enlightening and entertaining anecdotes abound.

In the authors' view, although Detroit decried free trade as a threat to its existence, overseas competition saved Detroit by forcing it to improve efficiency, quality, and service. The book's heroes are the managers who awoke early to the changing climate and fought for years to get their companies to adapt.

Just that combination of insight and action--divining change and positioning your company to make the most of it--is the subject of the year's best management book, Competing for the Future: Breakthrough Strategies for Seizing Control of Your Industry and Creating the Markets of Tomorrow (Harvard Business School Press). In fact, authors Gary Hamel and C.K. Prahalad go further: The task for corporate strategists, they argue, is to change their industry's rules fundamentally, as Charles Schwab did in the brokerage and mutual-fund businesses, or to redraw the boundaries between industries, as Time Warner and others want to do in "edutainment."

The authors, prominent professors and consultants, lay out questions managers must ask to gain a point of view about the future and create a plan for getting there. They want such issues to supplant today's preoccupation with cost-control because downsizing, they say, is a kind of "corporate anorexia": It can make a company thinner but not necessarily healthier. Senior Writer John A. Byrne called Competing for the Future a "worthwhile tonic for devotees of today's slash-and-burn school of management."

Tainted Truth: The Manipulation of Fact in America (Simon & Schuster) is a tonic for anyone who feels overwhelmed by warring product claims. A shrewdly concocted study, Wall Street Journal editor Cynthia Crossen demonstrates, can prove virtually anything. Dissecting studies done by and for environmentalists and for makers of drugs, breast implants, and foods, she shows that slicing data differently can make the truth remarkably pliable--and that money makes such recasting all too alluring.

"Tainted Truth amply illustrates how easy it is to dress up a one-sided sales pitch with good-looking numbers and spin a story whichever way is convenient," wrote Philadelphia Bureau Manager Joseph Weber, who calls the book a must-read for anyone who deals with numbers.

By scrutinizing the numbers used by politicians and policymakers, Working Under Different Rules (Russell Sage Foundation) confounds some widely held assumptions. Edited by Richard B. Freeman, a Harvard University labor economist, the book summarizes five books that were commissioned by Boston's National Bureau of Economic Research to compare U.S. labor markets with those in Western Europe, Canada, Japan, and Australia. The conclusion: In terms of improving standards of living, America has performed worse than most other industrialized countries. Wrote Workplace Editor Aaron Bernstein: "The book suggests the U.S. can learn as much from them as they can from the U.S."

Among the lessons: Yes, America has created scads of jobs. But because Europe's productivity growth has topped America's for nearly two decades, its wages and benefits have grown faster. By the broadest measure of living standards, Europe has performed better. Such findings call into question the notion that Europe, burdened with high labor costs and a rigid structure, would do well to emulate the U.S. And the analysis of where the U.S. has fallen down lends credence to the Clinton Administration's push for apprenticeship and training programs, Bernstein noted. However, given the conclusions of Working Under Different Rules, "the U.S. may need to go much further to get the average American's living standard rising again."

Surely the quirkiest volume in this year's roundup of the best business books is The Choice: A Fable of Free Trade and Protectionism by Russell D. Roberts of the Olin School of Business at Washington University in St. Louis (Prentice Hall). Stealing a page from Frank Capra, Roberts dispatches 18th century economist David Ricardo back to earth. It's 1960, and the angel-economist is on a mission--to stop the election of a protectionist President. To achieve his goal, he befriends the chief executive of a TV manufacturing company threatened by imports, transports him to the future, and then shows him what America will be like in 1995, both with and without barriers.

Yes, it sounds flaky. But this 113-page defense of free trade "puts the complex macroeconomic issues surrounding the North American Free Trade Agreement and the emerging global economy into understandable terms," wrote Washington Correspondent Doug Harbrecht. "And it's fun to read--honest."DENISE DEMONG


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