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Mon, Sep 24, 2012, 01:00

Business thinking between the covers

The Clash of the Cultures

by John C Bogle

Wiley €24.99

The clash referred to in the title is between old style and more contemporary forms of investment. The author is a veteran investment manager and founder of the Vanguard Group, a major global investment management company. He hankers for the days when investment managers acted as stewards of investors’ money, acting in the best long-term interests of their clients.

Now, managers churn portfolios to earn fees. The average equity mutual fund turned over its portfolio at a 17 per cent rate in the 1950s and 25 per cent in the 1960s. By the 1980s, that had risen to practically 100 per cent. Over the past five years, trading volumes in the US financial system totalled $33 trillion.

Bogle is worried about the relentless rise of the modern culture of speculation, characterised by frenzied activity in our financial markets, complex and exotic financial instruments and trading in derivatives of various securities and how it threatens our future.

In a chapter entitled “The Silence of the Funds” he attacks mutual and pension fund managers for their corporate governance failures, citing rampant abuses in executive compensation and corporate political contributions.

Futurescaping

by Tamar Kasriel

Bloomsbury €14.99

This is a book about how to use business planning methods for personal success. It illustrates the principles and methodologies used by corporations and shows how they might be applied to the lives of individuals.

It also shows readers how the results of future planning can help both individuals and businesses build early warning systems to help prepare for whatever the future may bring.

The book invites readers to look at decisions that will have medium- to longer-term consequences. These include education and career options, having children or not, home location, property, financial investments and personal relationships.

Kasriel shows models with an x and y axis for some of these key decisions and analyses a wide range of the positive and negative consequences for actions. The process to frame the questions, identify and analyse the drivers and then create the various consequent scenarios is often an exhausting one, the author acknowledges.

However, having a plan or a series of well-informed future options is preferable to drift and, as Kasriel notes, there is a lot of evidence to suggest that having a sense of desirable future outcomes or a goal that you can work back from, gives you a path to get there.

The Leadership Challenge

by James Kouzes and Barry Posner

Josey Bass €24.99

This is a new edition of a well-established management classic published 25 years ago. It contains more than 100 new case studies examining the challenges facing those leading organisations today. There’s also an app designed to help readers act on the ideas within the covers.

According to Kouzes and Posner, there are five practices of exemplary leadership that bosses need to perfect. These are: model the way; inspire a shared vision; challenge the process; enable others; and encourage the heart.

The first issue readers must address is their own personal beliefs and values. They must also find a way of expressing their leadership philosophy in their own words, not parroting others.

Establishing credibility is vital too. When it comes to deciding whether a leader is credible, people listen to the words, then the watch the actions. For example, they will listen to promises of resources to support change initiatives but they will wait to see if the money and material follow.

It’s important too to tap into people’s emotion, the authors stress. A leader’s role is to get people to feel motivated to change, and expressing emotions helps to do that in the way that most PowerPoint presentations dont.

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