My favorite books on avoiding dumb decisions in your job and seeing opportunities where others don't

Daniel Kahneman and his colleague, Amos Tversky pioneered the breakthrough research on cognitive biases affecting our judgments. Kahneman received the Noble Price in Economics for this research, though he is a psychologist. This research upended the traditional study of decision-making and explained how both laymen and experts alike make economic mistakes. I met Daniel when I organized the first conference on behavioral economics at Princeton University back in the 80s. This book is an eye-opening collection of clever experiments on decision-making biases.

I have used it to train my competitive intelligence and strategy professionals not only in recognizing their own biases but in recognizing their audience biases and using those to drive a message. Knowing thyself and knowing thy bosses (to paraphrase Sun Tzu famous saying) can help prevent surprises that bring companies down and destroy careers.

Porter, the strategy guru from Harvard Business School, created the field of competitive analysis, out of which we grew my field of competitive intelligence. This book is the “bible” for every manager out there looking to understand where risks and opportunities come from, and how to take advantage of both (risks can be as profitable as opportunities if you learn of them earlier than others). Over the years, academics and consultants attempted to poke holes in Porter’s basic analysis frameworks to no avail. It remains the only surviving framework used by strategic planners worldwide and outlasted fads and buzz words such as re-organization, blue ocean theory, core competency model, “hyper-competition” misconception, and “business models.” Porter is to strategy what Peter Drucker was to general management. I use these frameworks to train competition analysts all over the world. 

I am an economist by training. I taught economic courses at Rutgers University for two decades but the only economic framework I consider useful for real-world managers is the classical school known as Austrian Economics, of which Murray Rothbard was one of the more eloquent and accessible voices. Mainstream economists busy themselves with complex mathematical models that are in the end utterly useless in explaining the world, or worse, are utterly wrong in predicting the consequences of policies but are provided by “court economists” to support ideologies. Murry Rothbard, in contrast, lays down the principles of economic theory that will guide your investment/competitive strategies based on the most solid and realistic economic reasoning around. The book is not easy to read, but it will change your understanding of the world. It inspired me to get a Ph.D. 

As part of my focus on preventing disastrous competitive surprises and avoiding blinders when it comes to new opportunities, I discovered this little gem authored by an IMD professor, Phil Rosenzweig when I conducted a wargaming session at IMD (my favorite business school). The book is short and very modest and wasn’t accompanied by the marketing hype of such bestsellers as Jim Collins’ books From Great to Greatness…(to bankruptcy?) or McKinsey’s reports of “success formulae” and yet it systematically shreds these works and exposes the delusion, fostered by them, regarding the reasons companies perform well. This book reads like a parody of superficial thinking fostered by popular business writers and big consulting firms. A manager who wants to stay ahead of the competition better read this book as a defense against fluff and benchmarking shamans. 

I am an entrepreneur. I am exceedingly proud of being profitable for 23 years. I believe I deserve these profits and profits are moral because they are derived from providing true value. At the core of my value system, however, is not profit per se but integrity in my personal and business dealing; These are not two different moral systems. Rand’s defense of freedom is the most important moral statement of our times. It is the reason I don’t work in China, for example. Rand’s philosophy is often demonized by those who justify force to achieve “desirable” goals. Those who follow her teaching are therefore better people. It is that simple: if you want a deal with an ethical person, ask about their philosophy. I was ecstatic when my son read the book in College. Atlas Shrugged might be fiction, but our world is proof of how right she was.