Thinking Inside the Box The 12 Timeless Rules for Managing a Successful Business

Preface: Read This First Don't Do Anything StupidBy early 2002, many of the world's major media companies (along with quite a few telecommunications companies, investment firms, and various other businesses) were in big trouble. Vivendi Universal, AOL Time Warner, and Bertelsmann all ousted top managers after suffering disastrous reversals in market value. It was during this dismaying period that Mel Karmazin, president and COO of media giant Viacom, devised the most reassuring message he could muster to calm the fears of his jittery investors.Karmazin's message contained none of the ideas that had set the business world on fire during the previous decade. It was not a pledge to change relentlessly with changing times, or a hymn to thinking outside the box, or a nod to the revolutionary power of technology, or an invocation of the godlike qualities of his CEO. Instead, displayed bravely on the T-shirt Karmazin wore for a conference call with his big institutional investors was the promise: "We won't do anything stupid."As modest as it was, no message could have been more welcome and appropriate in the post-new-economy agony of the time. Simply by avoiding stupid moves, Karmazin and his boss, Sumner Redstone, Viacom's chairman and controlling shareholder, had steered the corporation into the top spot among media conglomerates. In mid-2002, Viacom -- owner of such leading entertainment brands as Paramount, MTV, CBS, Blockbuster Video, and Simon & Schuster (the publisher of this book) -- was the most valuable media company on the planet, mostly because it had avoided expensive gambles on unproven fads.During the 1990s, Viacom turned down the opportunity to pour money into countless Internet-based start-ups, and Redstone turned away the hyper-expensive America Online deal that Time Warner later swallowed, much to its shareholders' ultimate regret. In short, Viacom stuck to the tried-and-true basics of its businesses, and Viacom's managers kept their thinking firmly inside the box.In undertaking the research for this book, I found it impossible to avoid the conclusion that much of the business world essentially lost its head during the 1990s, making a series of moves so stupid that it seems -- in retrospect, at least -- they should have been obvious to anyone. It is clear that this recent stupidity was both a reprise of past stupidity and a total failure to heed the lessons of commercial or human history. Almost without exception, the biggest errors were based on the notion that the foundations of sound business were being radically altered by technological and social change. But that notion, which has been briefly entertained by virtually every generation of humanity, has always proven to be a monumental overstatement. This latest time around was no exception.Consider for a moment the groundbreaking work of Herbert A. Simon, one of the twentieth century's outstanding economic thinkers. Born in 1916 in Milwaukee, educated in the public schools, Simon found himself during the Great Depression at the University of Chicago, where he latched onto the notion that would form the center of his life's work: "The social sciences, I thought, needed the same kind of rigor and the same mathematical underpinnings that had made the 'hard' sciences so brilliantly successful," he wrote years later. So he set about training himself to be "a mathematical social scientist." An undergraduate term paper on decision-making in business organizations led to graduate work on the same topic and then to a research fellowship at the University of California at Berkeley. As one culmination of his research, Simon published a book in 1947 titled, simply, Administrative Behavior, which created a firm foundation for understanding the complex ways in which decisions are made inside corporations and other "economic organizations." When the Royal Swedish Academy of Sciences explained in 1978 its reasCheyfitz, Kirk is the author of 'Thinking Inside the Box The 12 Timeless Rules for Managing a Successful Business', published 2003 under ISBN 9780743235754 and ISBN 0743235754.