Is this Classic Book on Business Still Relevant?

It constantly ranks on the top of listicles found at places like Business Insider and Inc. And, Business Adventures by John Brooks famously earns praise from luminaries like Bill Gates and Warren Buffett as one of their favorite business books. But what can a book published in 1969 teach us about business in our fast paced, remote working world? Is this really the valuable classic promised — or is it one of those tomes that people now recommend without actually reading themselves?

Digging into Business Adventures veritably should count as a time travel. Brooks takes us into a more parochial, whiter business community centered on the East Coast. The WASP lingua franca in which it is written will either charm or frustrate a modern reader. And, he spends significant time in several of the stories on methods and chains of communication which no longer exist. On first impression, either of these alone may cause a reader to feel it’s out of date, but the reality is more complicated.

Business Adventures opens with essentially a flash crash of the stock market in May 1962. There’s a dizzying array of information about delayed ticker tapes and individual quotes of stocks falling and rising in price, peppered with what can best be described as the inside baseball of the day. But, Brooks skillfully weaves quotes from Joseph de la Vega’s Confusions of Confusions into the narrative — and that’s really the juice here. Written in 1688, Confusions of Confusions details the follies of the Amsterdam stock market and, without quite hitting the reader on the head, Brooks essentially makes the point that the panics and wild vacillations in stock prices will always be with us. In a way, of course, everyone knows this as Buffett has so often reminded investors to be greedy when others are fearful. But, in the twelve months prior to the publication of this article, the market cap for $AAPL (arguably the bluest blue chip of our age) has been as low as $1 trillion and as high as $2.3 trillion. Would this surprise Brooks or Joseph de la Vega?

In the next chapter, Brooks explores the Edsel debacle at the Ford Motor Company and it’s among the liveliest writing in the book. In the late 1950s, Ford determined that it had a gap in its offerings. Its chief competitor at the time, General Motors, had a more balanced product offering at each step of the income scale. Chevrolet owners, in theory, would graduate up to Pontiac or Buick and with any luck would one day own a Cadillac. The Mercury division of Ford, its middle market offering between the affordable Ford nameplate and the luxury Lincoln brand, had failed to win over consumers. Ford sought to plug the gap. Rather than reimagining Mercury, however, it set out to create a new brand called Edsel and failed massively.

The reasons for this continue to be debated and Brooks reviews the history and some of the theories behind the failure. He does so without arriving at a definitive conclusion, but leans heavily on the mechanical mishaps of the Edsel and on the vagaries of consumer preferences. The latter has vexed businesses since the beginning of time. Famously the Hollywood screenwriter William Goldman said “Nobody knows anything” as to which movie to make. In support of this statement, Goldman pointed out that every studio but Paramount passed on Raiders of the Lost Ark and Universal passed on the opportunity to make Star Wars.[1] By analogy, isn’t the aesthetic design of the Edsel and its subsequent consumer reception something inherently beyond the control of Ford? And if so, doesn’t that point toward the lack of quality control as the essential Ford sin?

Fans of the writing of Nasim Taleb will undoubtedly find validation for some of his ideas in the remainder of the Edsel chapter. With a slight marvel in his tone, Brooks reports on the career trajectory of the key actors in the Edsel debacle. Taleb, of course, has harped many times about corporate actors who have “no skin the game” and after losing what would approximate $3.5 billion in today’s dollars, the Edsel crew marches upward, some even inside of Ford. Incidentally, Taleb’s ideas also receive a slight validation in a later chapter where Brooks attends a series of annual shareholder meetings of several corporate giants. At those meetings, Brooks reports on the somewhat derogatory tone management takes towards shareholders — despite the fact that supposedly management works for the shareholders.

This isn’t to say that all of the chapters bear relevance to today. In the sixth chapter Brooks details, play by play, a rescue by the New York Stock Exchange when one of its member firms failed to meet the exchange’s capital requirements. In light of the later formation of the Securities Investor Protection Corporation and in light of the gargantuan bailouts in the Great Recession, the chapter feels quaint. However, at a slight risk of spoiling the surprise, it does serve as a reminder that nothing replaces a site visit when considering the strength of collateral. A later, lengthy and sometimes dry chapter on the efforts to stabilize the pound sterling in the 1960s feels arcane and would likely interest only currency traders, gadflies or historians. In any event, it certainly pales in comparison to the Crown’s dramatic, fictionalized version of the pound rescue where Princess Margaret drunkenly woos LBJ after a state dinner.

The earnest tone of the book stands in stark contrast with much of today’s writing. In a profile of David Lilienthal, who had served on the Board of the Tennessee Valley Authority and as Chair of the Atomic Energy Commission, Brooks practically gushes over Lilienthal’s transition into the private sector. Lilienthal, among other things, ultimately formed the Development & Resources Corporation with other alumni of the TVA. The company aimed to develop dams and hydroelectric projects abroad. Undoubtedly, a current treatment of this would highlight the existence of yet another Washington DC insider cashing in on their experience and contacts from the public sector. Further, in a chapter on Xerox, Brooks visits the corporate headquarters in Rochester, New York. Xerox, then essentially the high-flying tech company of the day, charms Brooks and what follows is more or less a platform for company executives to chronicle its meteoric rise after a substantial period of hardship and difficulty. Certainly, their story deserved to be told, but it’s hard to imagine a modern version of this that doesn’t at least include more critical viewpoints, for example, that of the union. With that said, Brooks isn’t a total sop to business either. When the moment requires it, for instance in a different chapter on price fixing by General Electric, he supplies just enough subtle incredulity to maintain his own credibility.

The adventure traveler typically travels to someplace unknown, otherwise it would hardly qualify as an adventure. And at its best, Business Adventures reminds us that business is a process of moving forward into the unknown. A chief scientist at Xerox explains to Brooks that Xerox didn’t fully understand how selenium — a natural element key at the time to making photocopies — even worked. The scientist said that Xerox came to its critical breakthrough using a combination of “yankee tinkering” and “scientific inquiry.” Anyone reading Business Adventures looking for specific advice on what to do next with their own business will likely be disappointed. However, plenty of books offer advice on business strategy. The real continuing relevance of Business Adventures is that the process of reviewing the foibles of other people shatters the notion that anyone knows what they’re doing. And, once that is shattered, we are free to take our own tinkering steps into the unknown.

[1] https://www.newyorker.com/magazine/2006/10/16/the-formula

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Tybee Island, Georgia

For more of Hunter’s ideas and conversations please follow him on Twitter at Hunter St. James, IV.

Nomad. Sometimes writer. Sometimes slut. Afrophile. Investor. Art Collector. LGBT. See also: https://twitter.com/HunterStJamesIV