Books

Connecting the Dots by Cathleen Benko and F. Warren McFarlan
Selling China by Yasheng Huang
What Customers Think by Gerald Zaltman

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Connecting the Dots
by Cathleen Benko and F. Warren McFarlan (Harvard Business School Press)

A recent study by the Project Management Institute indicates that companies around the globe spend nearly $10 trillion on project- related activities. Yet, as a new book by Cathleen Benko (MBA ’89) and HBS professor Warren McFarlan makes clear, project- and technologyrelated investments too often are made in a disorganized and uncoordinated manner. The result over the last five years has been nearly $1 trillion in underperforming investment in the United States alone.

Although its central message is that managers need to think more coherently about their project portfolios in order to align them with corporate objectives, Connecting the Dots: Aligning Projects with Objectives in Unpredictable Times studiously avoids a discussion of what the authors call “the S-word” — strategy. Instead, the book offers “a no-excuses, in-the-trenches perspective” that lets managers take existing realities and operating legacies into account as they go about three essential tasks: strengthening links between portfolio objectives and overall company goals; ensuring that the relationship among projects creates greater value and efficiency; and making sure that projects build organizational capacity to respond effectively to an uncertain future.

McFarlan and Benko (who is Global e-Business Leader at Braxton, formerly Deloitte Consulting) urge managers to think as though they were settlers of a new business frontier that has been carved out by forces such as technology, societal change, political strife, and economic volatility. “Frontiers are uncharted territories,” the authors write. “They require new mind-sets, creativity, and — most important — the ability to envision how the business can exploit the changes that are under way.” By providing a theoretical framework for scrutinizing existing projects and an in-depth discussion of an “alignment prescription” that includes real-life case examples, Connecting the Dots gives managers the tools to make the most of their technology- and projectrelated investments as they optimize expenditures on the new business frontier.

— Deborah Blagg

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Selling China
by Yasheng Huang (Cambridge University Press)

Foreign direct investment (FDI) in China has been viewed both as evidence of a Western desire to gain a toehold in the country and as confirmation that China’s economy presents increasingly sound investment opportunities. But in his new book, Selling China: Foreign Direct Investment during the Reform Era, HBS associate professor Yasheng Huang asserts that it is not strengths but weaknesses in the Chinese economy that are responsible for some of the country’s impressive FDI figures.

Huang argues that foreign direct investment in China surged during the 1990s because of the country’s shortcomings — domestic firms weren’t competitive and didn’t take advantage of business opportunities, a void that foreign firms and foreign capital were poised to fill. Political power in China, Huang says, is still skewed toward stateowned enterprises, which endows them with greater resources than more efficient private firms. And state ownership constrains growth and investment options for domestic firms more than it does for foreign enterprises.

While FDI does bring benefits such as the stimulation of privatization activity, increased venture capital for entrepreneurs, and the enhancement of capital mobility regionally, Huang questions why the Chinese economy isn’t performing these functions independently. He asserts that while reforms may have broadened China’s markets, they have failed to address many of the economy’s inefficiencies.

State ownership remains “a first among equal governing principles in today’s China,” Huang observes. That attitude must give way to “an ideological commitment to private property rights” and to the institutional reforms that would necessarily follow. That development seems more likely, he believes, after the recently concluded Party Congress emphasized the domestic private sector “more than it ever has before.” “One can only hope,” he writes, “that ideology will no longer be a stumbling block among the next generation of Chinese leaders.”

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How Customers Think
by Gerald Zaltman (Harvard Business School Press)

Were it not for the years HBS assistant professor Rakesh Khurana spent

The inventor of a patented research method that analyzes consumers’ subconscious thoughts and feelings, HBS professor Gerald Zaltman believes that 95 percent of consumers’ thinking occurs in their unconscious minds. Traditional market research, which focuses on what consumers say rather than how they actually behave, fails to take this into account. In How Customers Think: Essential Insights into the Mind of the Market, Zaltman pulls together elements of neurology, sociology, biology, and other sciences — along with his extensive research in marketing — to outline ways in which marketers can understand human behavior on a much deeper level and begin to use that knowledge to their advantage.

Zaltman argues that marketers need to embrace a new paradigm that connects mind, body, brain, and society. Consider the complex interplay of these factors when a wary, first-time car buyer enters an auto showroom and meets an aggressive salesperson and sees a display of trophies and hints of a special offer. “These objects may trigger vague images of predator and prey, which in turn may prime the innate ‘fight or flight’ response,” writes Zaltman. Car companies that spend millions researching consumer preferences for colors and styling may be losing sales because the overall atmosphere in their showrooms makes people feel uneasy.

Zaltman analyzes numerous examples of consumer behavior; delves into detailed explanations of conscious and unconscious thought; explores the role of memory, metaphor, and storytelling in consumer behavior; and shows how marketing managers at companies such as Coca-Cola, Procter & Gamble, and Reebok are using his research to redefine the conceptual territory between marketers and consumers — the “mind of the market” in the book’s title. Pointing to new product and service failure rates of 80 percent or more, Zaltman urges market researchers to challenge the status quo. “The sinking of the Titanic resulted from a failure to question two-and-a-half decades of practice,” he notes. “Similar patterns of thinking prevail today among managers, and a similar fate awaits them if they fail to rethink what they ‘know’ about marketing.”

— Deborah Blagg