Hardheaded & Softhearted
Rick Belluzzo and Krish Dhanam (Brown Books Publishing Group, $19.95)
Running a successful business requires IQ and EQ (emotional intelligence) because decisions affect people. Early in his management career, Rick Belluzzo learned that lesson the hard way when he promised more business than he could deliver to a Japanese supplier. When he humbly renegotiated, the supplier also insisted that Belluzzo apologize to its workers. He found himself “accepting failure” in front of thousands of factory workers whose livelihood he had jeopardized.
Belluzzo’s co-author, Krish Dhanam, learned an EQ lesson from motivational guru Zig Ziglar early on: “Complimenting someone for a role in your success should not be hard,” and you can never say thank you enough. “Recognition fuels motivation, and reward propels achievement,” they write.
With a business world where change is the new normal, you need EQ and IQ to prosper. EQ allows you to find ways to sell change that’s imposed from the outside. IQ helps you foster change from within by encouraging nontraditional ideas and challenging conventional wisdom.
Often, change comes in the form of crisis. When crisis hits, some companies respond by belt-tightening and hunkering down. The authors say a “good crisis is a terrible opportunity to waste.”
To capitalize on crisis, answer three questions:
1. “What can you do to take advantage of disruptions if you have no limitations?” The answer helps you identify possibilities.
2. “What are the barriers that keep you from acting?” While some are tangible (i.e. money, skills), fear of failure is emotional.
3. “Are the barriers really insurmountable?” Think about how you can remove them and who and what you’ll need to achieve.
Mission in a Bottle
Seth Goldman and Barry Nalebuff (Crown Business, $23)
Graphic novel meets business book in this story of Honest Tea from startup to success. Barry Nalebuff, a Yale professor of management, is Honest Tea’s co-founder and former chairman. Seth Goldman, Nalebuff’s student, is the other co-founder and CEO.
They brewed up an idea 15 years ago to make organic, freshly brewed, lightly sweetened bottled tea.
Both were clueless about the beverage industry, especially why it hadn’t thought of selling real tea. They figured that out: The beverage makers were competing in a well-defined market they developed. “Big companies are designed to protect the mothership.” That ship generated profits that could be cannibalized by another in-house brand.
Honest Tea was different, and it was targeting an undefined market that it would develop.
They made mistakes, of course. They thought owning a bottling plant would help them control costs, and when iced tea was out of season, it could produce beverages for other companies. The operative word was thought. The plant they bought was a cash-burning machine; the changeover to other companies’ bottles and labels burned more cash. It cost them more than $1 million to get out from under it. Where did they get the cash? An investor took an equity stake (and diluted their ownership).
To get Honest Tea to the next level, the production and distribution networks needed to expand. Serendipitously, the fledgling market showed potential, and Big Beverage took notice. A deal with Coca-Cola provided the needed funds.
Goldman and Nalebuff readily credit their success to the employees who shared their passion for Honest Tea.
Jim Pawlak reviews business books for The Dallas Morning News.