Business thinking between the covers

Free Lunch

by David Smith

Profile Books €12.99

David Smith, economics editor of the Sunday Times, has produced a layman’s guide to economics in a book that uses the metaphor of a meal to provide what he describes as a five-course “easily digestible” guide to the subject.

Smith’s thesis is that economics is often shrouded in mystery and his mission is that every voter should understand some of its basic tenets. He aims to provide answers to questions such as what is deflation and why is it worse than inflation, and what happens when interest rates go up and why.

He starts on the popular topic of property prices, the subject of many dinner-party conversations. One of the most enduring economic relationships is that between house prices and incomes, he notes, and house prices rise mainly because incomes do. No longer do you have to wonder uneasily whether the pub bore might be right when he tells you house prices are going to fall for the next 30 years. Just ask him whether he thinks incomes are going to fall over that period and why that should be so.

With a range of dining companions that include Adam Smith, Karl Marx and John Maynard Keynes, Smith provides an entertaining introduction to a complex subject. There is also a handy glossary of economic terms.

Leapfrogging: Harness the Power of Surprise for Business Breakthroughs

by Soren Kaplan

Berrett-Koehler €24.99

Every business aspires to have a breakthrough business idea, not just an incremental improvement, and here the author provides a model for how to do this. Soren Kaplan claims that through extensive research he has identified a process for transforming a surprise into a breakthrough. He backs up his ideas with case studies from his work as a business consultant. There is also a work- book element with good keypoint summaries and reader questions.

While breakthroughs are sought, businesses react badly to surprise, Kaplan notes. Take a look on Amazon, he says, and you’ll find fewer than a dozen business books with the word “surprise” in their titles – most consider uncertainty and unpredictability to be problems.

Among the messages in this book are that our brains are wired to appreciate positive surprises and that they are strategic tools that drive breakthroughs. We should embrace surprises and use them as guideposts to help us generate ideas and discover new directions.

A business breakthrough doesn’t simply result from a great idea and leapfrogging isn’t easy, Kaplan says. It involves a challenging journey through ambiguity, unforeseen events and failures in order to come out on the other side.

Guide to Decision Making

by Helga Drummond

The Economist €19.99

Helga Drummond, in her eminently readable book on the important subject of decision-making, says we should distinguish between a mistake made in the fog of war and a systemic error of judgment. We can do nothing about the fog of war but systemic errors are avoidable.

This book is mainly about what lies behind the mask of

science – the gap between theory and practice, and between what we know and believe to be true and what is actually true.

Our innate tendency to overestimate our abilities means we often see ourselves as superior to other people, and research has shown that most people value themselves too highly. Overconfidence breeds complacency.

Calamity, Drummond notes, loves the overconfident because overconfidence tempts us to take bigger risks.

While in theory information keeps decision-makers in touch with reality, in practice it can often have the opposite effect.

So-called “hard” information can lead decision-makers into a hermetically sealed world where everything seems to be under control. But that belief can be an illusion.