Why the Bottom Line Isn't!: How to Build Value Through People and Organization

by Dave Ulrich, Norm Smallwood, Norman Smallwood

Book Overview

Offers a broad view of leadership and shareholder value based on multiple business disciplines In Why the Bottom Line Isn't authors Dave Ulrich and Norm Smallwood argue that sustainable shareholder value comes increasingly from assets not accounted for on an organization's balance sheet. These assets include a company's reputation, its ability to attract talent, and its ability to react quickly to new opportunities in the marketplace. Why the Bottom...

• Format: Hardcover
• Language: English
• ISBN: 047144510X
• ISBN13: 9780471445104
• Release Date: April 2003
• Publisher: John Wiley & Sons
• Length: 304 Pages
• Weight: 1.20 lbs.
• Dimensions: 1.1" x 6.2" x 9.5"

Customer Reviews

Intangibles in Organizational Effectiveness

This book argues that competitively successful organizations seek to constantly build long-term value by strategically managing some of their intangibles. As we know, intangibles are not accounted for in an organization's financial statements. By exploring the world of intangibles, the authors explore a new idea or a new bottom-line, which has the building of long-term market value as its central theme. The authors have identified 7 key intangibles that have to be nurtured. They include the following: shared mindset, talent, speed, learning, accountability, collaboration, and quality of leadership. They have built their formulations on the basis of their own real experiences or a survey of the practices followed by globally successful organizations. The book is based on an Architecture which is the central model on which its contents revolve (p.13). Some of the prominent features of the book are as follows: Firstly, the book explores a new bottom line suggesting that the intangibles are as or even more important as the hard strategies, systems and processes; for it is the focus on the intangibles that helps build customer, investor, and employee confidence about the future. Secondly, the book should be seen as outlining an agenda to focus on for HR managers; this is to charge them to increase the shareholders' value through helping develop each of the intangibles. The present crisis of HR department globally emanates from the allegation against it that it indulges in wasteful expenditure in non-measurable activities. Thus the book suggests that HR managers have to become coaches, architects, designers and facilitators of organizational capabilities. Thirdly, the observations and formulations of the authors are based on inter-disciplinary perspectives within management segments, and are not just reflections of organization theory or effectiveness or just better HR management. They have drawn from researches from disciplines such as human resources management, financial management, IT, and leadership. Fourthly, the book succeeds well as a solid guide that makes a complex subject simple to the reader by putting before her the essence of various functional perspectives related to management of intangibles. The discussion helps in gauging what works and what does not, and why. Fifthly, the book contains some remarkably interesting and effective tips of leadership building at the top as well as leadership-building as a way of organizational life. The authors point out that when leaders identify and implement the seven intangibles identified in the Architecture, they "create intangible value" (p. 251). The book is an essential reading for any executive who wants to better handle the complexities of managerial life in the era of chaotic competition. It surely helps the reader see a larger picture. Though the book has been written in extremely user-friendly way, I feel if it had a simpler title it would have carried a much

Architecture for Intangibles

"This book explores a new bottom line that creates real market value. In this new bottom line, the soft stuff is as important as the hard stuff because it builds customer, investor, and employee confidence about the future. Because leaders want to build confidence about the future, they need to discover a new bottom line, one focused on creating value through people and organization. When they do so, they will find that remarkable things happen. Employees are more committed, customers more satisfied, and investors are more confident...Accomplishing this purpose requires an integration of ideas from a number of different disciplines. It involves an understanding of the new role that intangibles play in company valuations and new shifts in thinking about organizational theory. It invites leaders in human resources, accounting, finance, andd information technology to consider new dimensions to their roles...The traditional viewpoint is that when a firm earns more money, its value goes up. The more it earns, the more investors value it. In recent years, however, that logic has begun to twist. Firms in the same industry and with similar earnings may have vastly different market values. This is based on the intangible value-components of a company (pp. 1-2)."In this context, Dave Ulrich and Norm Smallwood outline a way to build an organization's intangibles by formulating an Architecture for Intangibles. "This architecture defines four layers of intangibles in which leaders use the ideas with great impact (p.13)."Level 1. 'Delivers consistent and predictable earnings.' Ulrich and Smallwood say that "it is the most critical of all levels to achieve. Without it, there can be no success in building intangible value at any other level. You must begin there, then evaluate where you are most likely to experience success (pp. 15-16)." And they propose following six guidelines for delivering consistent and predictable earnings: (1). Set realistic expectations, (2). Build credibility by degrees, (3). Communicate frequently and publicly, (4). Access data frequently -know the numbers- look for early indicators, (5). Make bold decisions when necessary to adjust, (6). Legally level earnings, it possible (For details see Chapter 2).Level 2. 'Articulates a future growth vision.' They say that "this level deals with having a strategy for future growth. Once leader meet current numbers, they are expected to have a clear strategy for growing the business in the future, in terms of both revenue and cost (p.16)." And they use the idea of a growth tripod to communicate three primary alternatives for growth: (1). Growth through customers- On the customer leg of the tripod, revenue growth comes from targeting customers, figuring out new channels to connect with them, building a brand that creates value, and ultimately gaining customer share of each targeted customer (Coca-Cola, Home Depot), (2). Growth through innovation- Revenue growth that comes through innovation shows up

Practical and Inspirational, a Winning Combination

This book is loaded with practical wisdom about the challenge of leadership. Don't let the title confuse you, this book is all about the bottom line. If you are only going to read one book on leadership this year, make it "Why the bottom line isn't".

Gourmet Fare in a Fast-food Leadership World

In this world leadership hyper-hype comes a book of solid, actionable, no-nonsense, research and action-based material. The basic message of book is that intangibles are becoming a bigger portion of the formal and informal valuation of organizations. The book is a how-to primer on making "intangibles tangible."Full of down-to-earth advice, a number of assessments & worksheets, lots of how-tos (and some not-tos), most chapters in this book end with "Here are some steps you can take to..." or "Here are some questions..." As a bonus, Why the Bottom Line Isn't integrates much of the current thinking in leadership and organizational effectiveness into a whole. Those of us who have been around the field have come to expect this kind of book from David Ulrich and his many author friends-in this case, Norm Smallwood. The price of the book is easily recouped from an entertaining section on organizational "viruses" and a suggested antivirus program.

Great insights for business leaders

Great insights and practical tools and ideas to improve organizations. I especially like the thinking behind how to make the intangible tangible. The book discusses several Organizational Capabilities such as speed, accountability, collaboration, learning, shared mindset, and the power of Leadership Brand. The chapter on Shared Mindset is very powerful and provides prescriptive ways to create a common focus and direction that will directly impact a customers experience as well as the employees that make it happen. I think it is a must read for all leaders who want to build lasting value within their organizations.