Praise for Rules to Break & Laws to Follow: How Your Business Can Beat the Crisis of Short-Termism
"A fascinating, highly readable synthesis of business principles, technology, sociology and common sense, Rules to Break and Laws to Follow persuasively shows the connection between customer trust and business profits, and then explains how to make it happen. As a bonus, you'll learn how to make your company more innovative, how to ensure your employees actually enjoy what they're doing, and how to deal with the kinds of service and quality breakdowns that occasionally plague any company, even a well-managed one. This book should be on your required reading list."
―Stephen M. R. Covey, bestselling author of The Speed of Trust: The One Thing That Changes Everything
"Over the years, Peppers and Rogers have given me valuable advice about navigating the changing business landscape. This book is a must-read for managers who want to empower their employees and customers to?make change their ally."
―Jim McCann, founder and CEO of 1-800-FLOWERS.COM
"Highly readable and entertaining. Make sure everybody in your firm reads this book by last Friday."
―Dror Pockard, CEO of eglue
"In a time when most companies are built to flip, Peppers and Rogers have planted a stake in the ground to help you survive past the next round of financing or consumer fad. Knowing what rules to break is arguably even more important than what laws to follow, and this book imparts knowledge for both."
―Guy Kawasaki, cofounder of Truemors and author of The Art of the Start
"Peppers and Rogers have created the unthinkable: an enjoyable wake-up call! Their book serves up one compelling and provocative idea after another, and the authors enjoy debunking some of our most deeply ingrained business beliefs. Read this book and your customers will thank you."
―Dan Heath, coauthor of Made to Stick: Why Some Ideas Survive and Others Die
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Don Peppers & Martha Rogers, PhD, are the founding partners of Peppers & Rogers Group and 1to1 Media, the world's premier customer-focused consultancy and award-winning publishing company, now part of Carlson Marketing Worldwide. In addition to hundreds of trade and academic articles appearing in publications including Harvard Business Review, they are the coauthors of the bestselling "1to1" series of business books, available in seventeen languages. In addition, they have written a comprehensive graduate-level textbook, Managing Customer Relationships. Their most recent book was the highly successful Return on Customer, challenging companies to measure business success entirely differently, and documenting the customer base as a revenue-producing asset for businesses, capable of driving a company's long-term economic worth. Peppers and Rogers have been cited on numerous lists of thought leaders and business gurus, and serve on several boards.
Praise for Rules to Break & Laws to Follow: How Your Business Can Beat the Crisis of Short-Termism
"A fascinating, highly readable synthesis of business principles, technology, sociology and common sense, Rules to Break and Laws to Follow persuasively shows the connection between customer trust and business profits, and then explains how to make it happen. As a bonus, you'll learn how to make your company more innovative, how to ensure your employees actually enjoy what they're doing, and how to deal with the kinds of service and quality breakdowns that occasionally plague any company, even a well-managed one. This book should be on your required reading list."
―Stephen M. R. Covey, bestselling author of The Speed of Trust: The One Thing That Changes Everything
"Over the years, Peppers and Rogers have given me valuable advice about navigating the changing business landscape. This book is a must-read for managers who want to empower their employees and customers to?make change their ally."
―Jim McCann, founder and CEO of 1-800-FLOWERS.COM
"Highly readable and entertaining. Make sure everybody in your firm reads this book by last Friday."
―Dror Pockard, CEO of eglue
"In a time when most companies are built to flip, Peppers and Rogers have planted a stake in the ground to help you survive past the next round of financing or consumer fad. Knowing what rules to break is arguably even more important than what?laws to follow, and this book imparts?knowledge for both."
―Guy Kawasaki, cofounder of Truemors and author of The Art of the Start
"Peppers and Rogers have created the unthinkable: an enjoyable wake-up call! Their book serves up one compelling and provocative idea after another, and the authors enjoy debunking some of our most deeply ingrained business beliefs. Read this book and your customers will thank you."
―Dan Heath, coauthor of Made to Stick: Why Some Ideas Survive and Others Die
Rules to Break &Laws to Follow
From the dynamic writing team whose classic bestseller, The One to One Future, launched the Customer Relationship revolution, Rules to Break and Laws to Follow brings the unique Peppers and Rogers perspective to the most important issues facing businesses today.
Based on their decades of experience working with leading companies around the world, Peppers and Rogers are kicking the business model up yet one more notch. Written in their hallmark conversational style, Rules to Break and Laws to Follow will help you make better decisions a dozen times a day:
Why short-termism drives your business, and what you can do to stop it while still paying the bills
Why new, interactive technologies mean that customer trust is more important today than it ever was before
How respectful disagreement and dissent within your business can lead to better decisions, more innovation, and an engaging workplace environment
How to recover your customers' trust after it is undermined by a PR disaster or some other problem
Why social networks of customers don't always act rationally, and how best to use such networks to benefit your organization
What kind of corporate culture you need to ensure that your employees create real value for your business even when no one's looking over their shoulders
How to create a "climate of innovation" at your firm to ensure a continuous flow of new ideas, product and service improvements, and creative decision-making
The year is 1886. Gottlieb Daimler has just unhooked the horses from the front of a stagecoach and installed an engine in the back. He has created the first four-wheel automobile. But it's noisy, smelly, and smoky-mostly an oddity. Daimler's company soon joined with Karl Benz and, early in the 1900s, the story goes, financial planners at the new Daimler Benz company attempted to forecast the eventual size of the world market for cars, looking ahead seven to ten decades. After careful analysis, they predicted that in another century there would be perhaps 1 million cars in use worldwide.
But this forecast, as audacious as it must have sounded at the time, was woefully inadequate, because by the year 2000, more than 600 million cars were already in use around the world. Nearly 60 million new cars were manufactured in that year alone.
Granted, this was a very long-term forecast, but still: How could Daimler's finance people have missed the number by a factor of nearly 1,000? It wasn't the time lapse that created the error. Nor was it sloppy calculation, nor the fact that in those days they had no electronic calculators or spreadsheet programs. Their error was due to a completely false assumption.
The planners predicted that in a hundred years, the world population of chauffeurs would be about a million, and this would be a de facto limitation on the growth of the horseless carriage industry. Their prediction about the world population of chauffeurs was surprisingly close to the mark, but their assumption that all cars would have to be operated by chauffeurs was dead wrong. The error was not in the accuracy of the measurement but in a false assumption about what they measured.
Assumptions just like this one-just as carefully and accurately measured and every bit as fallacious-are every day corroding decisions about what truly limits the growth of businesses-maybe yours.
Like Bell forecasting that the market for telephones would be limited by the availability of human operators to make the connections, or IBM's Tom Watson famously predicting that the world would never need more than about five large computers, it's not hard to be blinded by the current business model. Even when the model is for a brand-new product category.
For most of a century now, three unspoken assumptions have underpinned businesses' efforts to grow, meet financial goals, and make shareholders happy. But these three assumptions about how a business creates value are false, and we call them "Rules to Break."
RULES TO BREAK
1. The best measure of success for your business is current sales and profit.
2. With the right sales and marketing effort, you can always get more customers.
3. Company value is created by offering differentiated products and services.
What, are these Peppers and Rogers people nuts? Who could quarrel with the idea that the surest, most reliable indicator of any business's success is when sales and profit tick upward in the current period? When sales aren't that great, more effective marketing is what you need, right? Bring in more customers until you push the numbers up. And we all know that the most reliable way to do this is to offer products and services that have a clear point of difference, compared to competitors.
No, no, no. No to all of the above. These Rules to Break are really just assumptions about how business works, at the most basic level. They probably aren't written down anywhere in your strategy document, but they have almost certainly backed up your thinking and your company's actions for as long as you remember.
The problem is, each of these assumptions is dead wrong.
More than that. If you operate according to these false assumptions, not only will your business fail to create much value, but you'll also soon find yourself trapped in a Crisis of Short-Termism. Everything you do will be so furiously centered on making today's numbers that you will become increasingly blinded to everything else. Businesses swept up by this crisis find that even as they try to do the right thing for their shareholders, they end up destroying value rather than creating it. So while these Rules to Break may look no more dangerous than ordinary common sense, in truth they're deadly.
A "PERFECT STORM" OF NEW TECHNOLOGIES
Once upon a time, perhaps during the age of mass marketing but before the World Wide Web, these rules served as reasonable guides for running a successful business. But a number of new technologies have introduced capabilities and influences on business that have together created what you might call a "perfect storm" of radical change. Customers share their experiences electronically with millions of other customers. Business is transacted at the speed of wireless email. And the lowliest employee can leap tall corporate hierarchies with a single click. The technology of business has changed so radically that the old accepted wisdoms just don't work anymore.
In their place we're going to propose a whole new way of thinking about how to create real shareholder value in today's competitive environment, operating with today's technologies. As we explain the nuances of our proposed new way of thinking, we'll introduce 12 Laws to Follow-guidelines to ensure that your business can surmount the Crisis of Short-Termism smothering so many businesses today. No one knows how long these Laws to Follow will adequately guide your decisions, but one thing is certain: If you want to succeed, starting tomorrow morning and stretching out at least into the future we are capable of imagining today, then you'll have to start by standing the old assumptions on their collective head, because they've already become more destructive than helpful.
Which begs the question: If the Rules to Break are so wrong, why are they so widely accepted? Why is it that so many businesses pursue their goals this way, in just the way their executives learned in the MBA program, the same way they've always done it?
IMITATION, CIRCULAR MILLS, AND MYTHBUSTING In a word: imitation. Imitation is one of life's most important defense mechanisms. Young deer learn to survive predators by imitating older deer that have survived predators. Birds learn to fly, wolves learn to hunt, beavers learn to build dams, and human beings learn to walk, talk, play, work, and flirt all by imitating others of their species.
Businesses, too, grow stronger and faster by carefully observing what has worked before and then imitating other successful businesses. Case studies, best practices, bench-marking, competitive reviews-call it what you want, there is no question that one company's success often becomes the object of imitation by others. (Listen, we believe imitation can be a good thing, in general. In fact, we're hoping you bought this book precisely because so many other people did.)
The problem is that imitation is so powerful, as both a learning tool and a survival mechanism, that when things get a bit out of kilter, the drive to imitate can sometimes lead to irrational and even self-destructive behavior. Army ants, for...
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