Customer Reviews

Rules to Break and Laws to Follow: How Your Business Can Beat the Crisis of Short-Termism (Microsoft Executive Leadership Series)

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I read all books from Don and Martha. "one to one future" was the first and the best book I've ever read related to CRM. "return on customers" was a first attempt to demonstrate that company value isn't necessarely equal to EBITDA and value of shares. Don and Martha introduced here the concept of long-term view vs short-termism.
With this latest book "rules to break & laws to follow" - I've read it in one day! - they follow their concept of demonstrating what real value to a company means.
I do like especially the introduction of an "employee/empowerment"-dimension which was a little bit missing until now.
Real great book. A must for all leaders and managers.
René F. Lisi

Purchase of this text by this reviewer followed on the tails of "The Strategy Paradox: Why Committing to Success Leads to Failure (and What to Do About It)" by Michael E. Raynor (see my review) and "Strategy Safari: A Guided Tour through the Wilds of Strategic Management" by Henry Mintzberg, Bruce Ahlstrand, and Joseph Lampel (see my review). While initial interest in this work by Peppers and Rogers was due to its seeming focus on the strategic versus the tactical, however, potential readers should note that the authors instead investigate and present general principles that any firm should follow.

At the outset, this text does not beat around the bush. For example, in the first chapter the authors respond to the following first three rules to break by writing "No, no, no. No to all the above. These Rules to Break are really just assumptions about how business works, at the most basic level. They probably aren't written down anywhere in your strategy document, but they have almost certainly backed up your thinking and your company's actions for as long as you remember.": (1) "the best measure of success for your business is current sales and profit, (2) "with the right sales and marketing effort, you can always get more customers", and (3) "company value is created by offering differentiated products and services".

The authors further this instruction by pointing out that all of these assumptions are wrong. "If you operate according to these false assumptions, not only will your business fail to create much value, but you'll also soon find yourself trapped in a Crisis of Short-Termism. Everything you do will be so furiously centered on making today's numbers that you will become increasingly blinded to everything else. Business swept up by this crisis find that even as they try to do the right thing for their shareholders, they end up destroying value rather than creating it. So while these Rules to Break may look no more dangerous than ordinary common sense, in truth they're deadly."

According to the authors, executives need to change their mental models of what it means to succeed. The new model that Peppers and Rogers is based on the understanding that long-term business success relies on customer success as a prerequisite, and that employee trust of their employer precedes employee drive to earn customer trust. Interestingly, even though new technologies are presented as making possible sophisticated analytics, subverting the power of hierarchies, connecting consumers electronically, and undermining the advantages of new products, the authors state that it is customer trust that will provide a guideline for action even if financial metrics are not yet at the needed level of sophistication.

In the opinion of this reviewer, the third chapter entitled "Customers Are a Scarce Resource" is one of the best in the book, and if the potential reader does not have enough time to read all the chapters, they need to read this one. In this chapter, the concept of customer lifetime value (LTV) is discussed. "New customer acquisition has always been the quintessential goal of traditional marketing and is something often trumpeted to shareholders. But raising your customers' lifetime values is just as important, because over and above whatever profit you are earning currently, increasing your customers' LTVs increases the value of your business."

The authors continue by stating that the philosophy of some businesses is "based on the belief that as long as its sales and marketing effort is effective, it can always acquire more customers from somewhere. But this is a false assumption - a Rule to Break. Instead, to make the right decisions as a business, you must always take into consideration the population of customers and prospective customers truly available to you. After considering the whole population of customers and prospects, your job is to employ that population to create the most possible value for your firm. Because customers are scarcer than other resources, using up customers is more costly than using up other resources."

The fifth chapter was also especially enjoyed by this reviewer, where in discussing how to increase the value of one's business the authors present the concepts of "customer equity" and "Return on Customer" (ROC) that follow a discussion of ROI. The examples and accompanying tables in the third and fifth chapters are very well done. The thoughts that the authors share on innovation in the tenth and eleventh chapters were also appreciated, where the production of new ideas is said to be more important than making money from every new idea, and where the need to differentiate between "wise failures" and "fiasco failures" is said to be an important distinction, reminding this reviewer of a quote by James Cameron, who was recently quoted as saying "If you set your goals ridiculously high and it's a failure, you will fail above everyone else's success".

Over the years, everyone's business has accumulated clutter like that closet at home. If you're not careful, the clutter gets in between your employees and the customer and everyone loses. Don Peppers and Martha Rogers are closet cleaners. They want your business to look in the mirror and do what it knows is right. Turns out that what's good for the customer is also good for employees and the CFO at the same time. I've had the privilege to see Don Peppers speak--he uses data, real world case studies, and knife-sharp common sense to teach what is wrong and right in business today. Somehow, he's able to be motivating, funny, convincing...and right, all at the same time. His books read like a Don Peppers speech: thoroughly enjoyable, breezy read, and makes you want to go to work early and bring a folding chair to your next meeting (you'll have to read the book to get this great reference!). If you plan to be in business in 10 years, you better read "Rules to Break and Laws to Follow" right now!

Don and Martha have done it again! They have identified and exposed one of the most difficult challenges in business today -that of short term-ism - or the obsession with making quarterly numbers at the expense of long-term and lifetime customer value.
They've dared to question some of the most fundamental business tenants and then provided evidence that new ones have emerged, such as the critical need to build and maintain trust, the necessity of employee empowerment, and the power of social networking, just to name a few.

Yes, this book is enjoyable to read; but more importantly, it has real-life examples, practical advice, and executable strategies for those who dare to build great companies for the future, not just the next quarter.

Elizabeth Rech
Hingham, MA

Reading this book is just like being in a business presentation by Don and Martha. The text flows very fluently, pouring real life examples drawn from their extensive experience with marketing and customer management.
It is also like being in a meeting in our own business. If you are an executive with marketing and sales responsibilities and you already do your job 'out of the box', you'll want to read this book to inspire your actions. If you still have to prove your point inside your company, the book will give you tons of reasons to show your boss why the company needs to start doing things differently right now.
Concepts like "customers are the scarcest resource", "the experience you give your customers is more important than the message" come to life with abundant examples. Customer equity management applications get a lot more tangible, even if you haven't read Return on Customer: Creating Maximum Value From Your Scarcest Resource, the authors' previous book.
Highly recommended, easy read, but don't be fooled. This is high-impact matter, which may seem deceptively easy to execute. The final chapters about diversity and dissent, corporate culture and leadership bring forth the organizational efforts needed to push these concepts forward in the real world.
Extensive reference notes can help you further research the subjects covered, which is great in an environment of ever-accelerating change.

Don and Martha continue to write about the customer experience from different viewpoints, each making great points and providing insight for both those who are recipients of that service and those providing it. As a member of the consulting field in this area, I always learn something more from reading their books.

This is an excellent book which challenges the most fundamental assumptions business leaders today make. I took it with me on vacation and couldn't put it down. Full of examples and best practices, this is easy to read and thought provoking. Don and Martha expose the crisis of "short-termism" which is increasingly challenging, especially in today's economy. They also highlight the evolving role of the customer given our networked and interconnected world. They share the latest trends and thinking on various topics from employee engagement to innovation to inspire leaders to think strategically about their customer experience design and the opportunities that will drive their long-term success.