to Read a Business Book
define trends and influence titans, but do you know how to tell
great literature from company-crashing schlock? Here are some
rules for understanding the new economy.
They define trends and influence titans, but do you know how to
tell great literature from company-crashing schlock? Here are
some rules for understanding the new economy.
About 60 years ago, Mortimer J. Adler, a philosophy professor
at the University of Chicago, participated in launching the "Great
Books" program to encourage all of us to read the classics
carefully and so become "more deeply aware of the enduring
truths of human life."
is, as Adler himself anticipated, an ongoing struggle. "There
is only one situation I can think of in which men and women make
an effort to read better than they usually do," Adler said.
"[I]t is when they are in love and reading a love letter."
a business professor currently teaching at Adler's old school,
I would like to add to that very short list at least one other
situation: It is when people are in business and trying to make
executives are, by necessity, book readers. They read autobiographies
of successful businessmen. They read business histories. They
read books that give them advice on how to be a better business
leader, manager, entrepreneur. They read anything that will give
them a handle on predicting the future. They read about new management
techniques-TQM, re-engineering. On occasion, they even turn to
All these books assert "truths" about different aspects
of business. They are influential, particularly in times of great
change. They introduce new buzzwords into the workplace and new
attitudes into the boardroom, and often influence major management
of these books, though, are truly great. They often contradict
one another or, worse, themselves. The ideas in business books
can be as destructive as they are instructive. As a result, business-book
readers often are worse off for their efforts. They are reading,
but they are not reading critically-and their companies may suffer
as a result.
Adler understood the importance of critical reading and has provided
a solution in the form of How to Read a Book, originally
published in 1940 and a great book in its own right.
method consists of increasingly critical levels of reading. Inspectional
reading, the first and most elementary level, is where the reader
simply attempts to ascertain what the author is saying. In the
second level, analytical reading, the reader asks if what the
author says is true. The final stage is what Adler calls syntopical
reading. Here, the reader compares and contrasts the author's
ideas to those of all of the other authors who have addressed
the same question.
the language of the new economy then, the complete reader first
addresses content, then quality, and finally context.
is serious reading indeed. Businesspeople especially will benefit
from such a formalized approach to assessing a book's worth and
engaging its ideas. But they also face some special issues, and
in teaching my own course at the University of Chicago, the Great
Books of Business, I've adjusted Adler's techniques slightly to
address those issues.
proposition for you
we can determine whether what a writer said is true, we must first
determine what the writer actually said. Business writers make
their living by propositioning readers. That is, they have at
least one theme or idea they want you to embrace upon reading
their book. This is not necessarily a bad thing, but, as the term
"inspectional reading" suggests, one must carefully
inspect what sort of proposition the author is making.
word has two meanings. In mathematics or logic, a proposition
is a statement of a truth to be demonstrated; the reader should
expect a logical demonstration to follow every such proposition
to convince him of its truth. The colloquial use of "proposition"
is that of a scheme offered evidence-free, take it or leave it.
The reader should instinctively put his hand on his wallet when
he hears one. Little can be done with a proposition that cannot
be shown as true or false, and so busy readers can feel justified
in moving on to the next book when offered one.
we have a better idea of what the writer is saying, we can analyze
the evidence to see if the proposition is true. This second level
is where things get more complex. Evidence is not only a series
of facts, it is also a method, called inference, of organizing
ideas. Moreover, there are two types of inference: deductive and
inductive. To read a business book well, one must determine which
type of inference the author is using. Deductive inference starts
from an assumption. Scholarly economists, for example, deduce
propositions from basic assumptions about human nature using mathematical
can make a deduction. It is up to you to assess whether the deduction
questions a reader should ask of a work that relies on deductive
inference are: Do I agree with the assumptions and postulates
underlying the reasoning? Is the reasoning itself logically correct?
Peer-reviewed journals, the home of scholarly economists, typically
screen out egregious instances where the answer to the second
question is no. They also attempt-with varying degrees of success-to
ensure that the answer to the first question is yes.
very few business books are written in this paradigm, mostly because
the kind of writing associated with peer-reviewed journals is
not accessible to the general business reader. An author usually
states his assumptions in a fuzzy or anecdotal manner (if at all),
and certainly doesn't articulate the logical steps by which he
reaches his conclusions. He is not being dishonest; he's under
the mistaken impression that intellectual rigor overly taxes average
is, in any case, up to the reader to ferret out the assumption
behind the proposition. Lester Thurow, for example, uses careful
economic reasoning in his 1992 bestseller Head to Head
to propose how the U.S. should alter its business behavior in
the face of then apparently overwhelming Japanese competition.
It was fine reasoning, but, as Paul Krugman points out in his
1996 book Pop Internationalism, Thurow's underlying assumption
that a nation functions like a corporation was inaccurate, so
the logic of the argument from that premise, no matter how meticulous,
inference, on the other hand, is based not on an underlying assumption,
but on empirical data. Industrial-organization economists, for
example, will often induce propositions from empirical observations
using statistical inference. A noteworthy example is George Stigler's
and James Kindahl's 1970 book Behavior of Industrial Prices.
They studied transactions prices between buyers and sellers, which
provided insights into how price clears markets in response to
changes in supply or demand.
proposition based on real data is strong, but still questionable.
The questions a reader needs to ask of such a work are: Is the
sample adequate both in selection and size? Is the statistical
inference properly performed? What are the probabilities of various
erroneous conclusions from the inference?
popular business books, with their emphasis on "case studies,"
seem to be based on inductive inference, but pay only token attention
to the first question, and seldom address the second and third
questions. Remember, data is not the plural of anecdotes. A work
often poses as a data-based induction when it is, in fact, merely
speculation. Whether it be Chris Argyris's inferences based on
a sample of one (see Executive Leadership), Tom Peters's
and Bob Waterman's inferences based on 75 companies (In Search
of Excellence), or Marcus Buckingham's and Curt Coffman's
inferences based on 80,000 interviews (First Break All the
Rules), the reader still has to make sure he is not being
The armchair writer
third type of inference, also inductive, is probably the most
prevalent in today's business books. I call it "armchair"
induction. The paradigm here is neither the mathematician working
from abstract assumptions nor the statistician working from large
data sets, but rather the philosopher who, based on a lifetime
of observation, digests what he's seen to form a conclusion.
process is inductive in that the author tries to create a theory
to fit what he sees without recourse to formal statistical proof
(for example, Kepler's assessments of the movement of the planets,
done without a telescope).
"proof" of this type of proposition is twofold: 1) Does
it explain the phenomena comprehensively? (For example, are there
counterexamples?) 2) Does it resonate well with the reader?
approach taken by most readers today, though, is to overemphasize
resonances at the expense of searching for counterexamples. They
read their books much like they read the op-ed pages of the daily
newspaper; they either agree or disagree with the writer's propositions
and leave it at that.
Search of Excellence, one of the bestselling business books
of all time, clearly resonates with many readers. The Harvard
Business Review, however, saw the book for what it was-a piece
of armchair induction-and appreciated that Peters's and Waterman's
empiricism was neither comprehensive nor convincing. Its 1983
review questions the authors' inclusion of companies like Boeing
and Texas Instruments but not others like Chrysler that, while
suffering, were clearly on the rebound. The review was a pan.
hindsight, of course, we can see that the companies dubbed "excellent"
by Peters and Waterman in 1982 are not so excellent today, and
probably weren't so excellent then. The Harvard Business Review
had their number, though, even as the book was climbing the charts.
Such is the power of analytical reading.
analytical techniques are powerful, but they address books in
a vacuum. The next stage is to become a syntopical reader. To
do so, you must put each book into the context of an ongoing "great
conversation," one that addresses critical questions like,
What is the nature and function of business? What is the nature
of the employee? What is the appropriate way to organize a company?
the reader must have in mind a comprehensive picture of the best
thinking about the issues that surround running a business. Unfortunately,
there isn't a trick you can use to achieve this high level of
reading. Few authors provide a map of how others have viewed matters.
(To their credit, Peters and Waterman are exceptional in doing
so.) Fewer still give the reader a complete unbiased review of
literature that proceeds theirs.
get the most out of a business book, readers need to have read
at least two or three others on the same topic. Even better, they
the business classics, and form their own map of
the issues and what the great business thinkers had to say about
in the first century the Roman historian Lucan originated the
saying, "Pygmies placed on the shoulders of giants see more
than the giants themselves." Sir Isaac Newton paraphrased
it more delicately: "If I have seen further it is by standing
upon the shoulders of giants." The best part of being a syntopical
reader is developing the ability not only to determine who are
the giants upon whose shoulders the author stands, but also to
determine whether the author is a Newton or a pygmy.
can only truly comprehend and evaluate a business book after you
have read many of them. Fortunately, as you become better at reading
them, you also become better at selecting them.
Madansky, AB'52, SM'55, PhD'58, the H. G. B. Alexander professor
emeritus of business administration at the Graduate School of
Business, has been teaching The Great Books of Business since
1996. This article first appeared in the July 24, 2000 issue of
The Industry Standard. Reprinted by permission of The Industry
Standard: www.the standard.com. "Plus a Supplemental Syllabus"
was not part of the original article.
a Supplemental Syllabus.