Clever Geek Handbook
28 June 2025

A Manager's Guide to Project Management

Recommendation

Though Michael Bender aims to be clear, tension is at the heart of his project management book. He doesn’t want to overdo commonly covered material, but he also doesn’t want to leave out any key terms or meaningful details. At times, this can lead to death by subtitles, where he introduces a series of topics but stops short of articulating their full meaning or import. To be fair, he shows project management for what it is – not a small city within an organization but a huge, at times overwhelming, continent inside a company. Even at its most difficult, the book gives senior managers a feel for the layers of complexity in the world of projects. Bender, who views projects as the holy grail of organizational value, tells managers how to aid and support them. He sensitizes leaders to the helpful or harmful ripple effects that their decisions have on organizational culture. BooksInShort recommends this as a reference book for senior executives. It isn’t light or easy to swallow, but taken in pieces, it might save you from project indigestion.

Take-Aways

  • The ultimate aim of a project is to add value to the organization; projects that do not add value should not continue.
  • Managers must understand the project management process to support and oversee it.
  • This requires establishing a culture that views projects as integral, not as ancillary.
  • “Strategic alignment” pairs projects with “durable” objectives.
  • “Organizational alignment” helps everyone speak a common language.
  • “Process alignment” makes projects truly part of a company’s daily work.
  • “Oversight” helps managers keep projects on track and know when they go off-track.
  • By encouraging a dialogue about how a project is unfolding, executives give project managers and workers permission to exhibit creativity within the project’s bounds.
  • Managers must oversee all projects to balance the company’s “portfolio” of projects, ensuring that it takes only appropriate risks.
  • Outsourcing is a risk with a huge upside and downside: It can provide inexpensive resources but it can also threaten the quality of the end product.

Summary

Projects and the “Executive’s Role”

Projects are a fixture in the corporate landscape. They can “add value to an organization”; in fact, value is their primary concern. Project managers draw from a deep, well-defined set of tools with a long history. So why do so many projects come in over budget, miss deadlines or flounder? At least part of the problem starts at the top with the influence of senior managers. Given a bad cultural climate, a political quagmire or the wrong environment, some projects never take off, let alone land. Managers must be aware of these common problems that plague projects:

  • “The project du jour” – When priorities change too often, people don’t know where to put their energy, and projects can languish.
  • “The warm-body syndrome” – When an executive wants to push a project, one common move is to “grab the next warm body” and put him or her on the task. This doesn’t necessarily help the task, especially if the person is not well-suited for it.
  • “Project work” conflicting with “real jobs” – Some people see projects as an “ancillary” distraction, not integral to the fabric of their work or their firm’s big goals. Projects can feel like interruptions, but they are intrinsic. To work against the assumption that projects are tangential, focus on aligning them with internal company processes.
  • “Scope creep” – When stakeholders continually add items to a project in progress, its agenda grows, wreaking havoc on even the most carefully considered plans.
  • “Politics” – A midstream shift in the political winds can harm a project.
  • “Forced deadlines” – If the targeted end dates don’t match the work the project requires, the venture will grow too flabby or produce work that is too thin.

Understanding and Supporting Projects

Project managers and their teams work with a “triangle of balance,” striving to meet the “goals” of the project within the boundaries of “time” and “resources.” Sound planning is imperative. Before the work begins, projects should undergo “progressive elaboration.” This tactic (which comes from the Project Management Institute (PMI), which promulgates project management standards) calls for outlining the project’s “breakdown structure” on a chart that indicates the project’s work, resources and concerns at each organizational level. For good project management, push participants to use and understand a clearly defined project language, including these terms:

  • “Project” – This “temporary” venture produces “a unique product, service or result.”
  • “Program” – This encompasses a number of products under one umbrella.
  • “Portfolios” – This collection of programs links to the firm’s “overall objectives.”
  • “Project managers” – These leaders run the team that works on the project. They don’t do the project’s work or provide “subject matter” expertise, but they oversee the project and make decisions for it. Most delicately, they manage the stakeholders, some of whom outrank them, so potential political pitfalls always loom.
  • “Sponsors” – These strong advocates or “champions” at the top of the firm protect the project from executive bullying. The sponsor holds the project’s purse strings.
  • “Senior management” – These executives green-light projects and provide resources. They set the “organizational objectives” that define the company’s range of projects.
“Project managers need to create a unique project that satisfies multiple, conflicting stakeholders, using resources that don’t report to them under tight budgets and time constraints – simple, right?”

When you take on the task of aligning your organization’s projects with its goals, you must examine everything, from your management to the culture and fabric of the company. Although you could run into fundamental disagreements between groups and step on political beehives, don’t avoid this pivotal work. In the end, alignment is about resources and the firm’s ultimate destination. Three kinds of alignment are critical: “strategic,” “organizational” and “process.”

1. Strategic Alignment

Strategic alignment keeps projects on track and nourished. It helps project managers and teams fulfill their tasks and finish their work. Strategic alignment enables firms to clarify their “strategic objectives.” To guide projects and align with them, these goals must be lasting and “durable.” Project plans must be general enough to handle marketplace changes and solid enough to represent the firm’s deepest aspirations. When executives change a project’s goals, it suffers and the project manager struggles. Imagine aiming for one target only to find out that your boss has a different objective. Even if you can readjust, the best-case scenario involves a loss of resources. At the same time, ensuring durability often means, by definition, a loss of specificity and “clear direction.” Taking a hierarchical approach can help you establish an “objectives pecking order.” As the project breakdown moves down the hierarchy, the plan should pick up increasing detail. Not every level of the firm needs the same level of detail about the project’s activity.

“A stable, balanced portfolio demands that we consider all goals for a project before work begins.”

The next step in strategic alignment involves “structured metrics,” measurements that show if a project is advancing. Seek evidence of a “minimum” achievement (what must be done), a “target” (where you want to end up), and a “stretch” (what might happen, what the inadvertent or innovative outcome could be).

“When an organization standardizes project activities, communication and workflow become easier and more efficient, conflict lessens and management simplifies.”

Tracking project decisions requires also tracking the assumptions and prioritizations that shaped them. If a project becomes dynamic and its resources shift to new priorities, old priorities will suffer. It’s better not to rank projects at all; instead, create a stable platform by prioritizing project goals. Then, choose and plan projects to fulfill those objectives. This “balanced portfolio” strategy is an antidote to “dynamic prioritization.” All the projects in a balanced portfolio go through a definitional process, “ensuring that all of their objectives receive sufficient support.” Such a portfolio saves wasted motion and resources, but you must be a strong manager to create and maintain true strategic alignment. And you must know your firm well so you can promote goals that matter and allocate resources to the projects that advance those goals.

2. Organizational Alignment

Projects may not recur and are not always predictable. They can burst onto the scene without precedent, pulling people and resources from their usual work into “short-term work overloads.” Even if projects don’t fit your usual flow, you can help ensure their success. First, create “well-defined roles and responsibilities,” because people must know their place and their purpose. Establish “ownership,” which emerges from a mix of doing the work (taking “responsibility”), reporting on the work (“accountability”) and providing “permission” for the work (“authority”). Projects need owners – sometimes many owners – at various steps. To move your project toward completion, make use of some professional “organization alignment” constructs, including:

  • “Steering committee” – This team oversees and manages ongoing projects, and binds managers together so that they all see every project the firm has underway.
  • “Project management office” – This administrative unit has a variety of purposes. Using its “tactical focus,” it implements projects. It works directly with project managers by mentoring, supporting and guiding them through political turmoil.
  • “Phase gate review team” – These monitors check with project managers as various stages of their projects reach completion. The gate review team conducts a formal review process, and it can either kill projects or let them pass to the next stage.

3. Process Alignment

As a senior manager, go a step beyond organizational alignment by thinking of projects as a “classical business process.” This mind-set helps you manage all projects that require a similar set of skills. Focus on the “deliverables” that your project produces (whether those deliverables are reports, software updates or hard goods). Seek points of “interface” between projects and other organizational processes. Make sure your project has the resources and buy-in it needs. When you set up a project, link it to its “organizational objectives”; plan it in direct connection with the parts of the organization that it will brush up against later. Planning must involve the players who do the work. For clarity, prepare well and polish your internal interfaces.

“True project costs include all associated costs, including internal human resources.”

Managing a project ensures that “the right things are getting done in the right way.” During the project’s building phase, the manager eventually must clear the path and collect the resources for completion. When the project is complete and the client is happy, the “closing” steps begin. The client formally accepts the product, and the team gathers what it has learned.

“Oversight”

As “capital investments,” projects require “cost management and portrayal.” Fortunately, the same tools that allow for such supervision and control also let senior managers make sure that projects comply with outside regulations and that nothing about them goes awry. While critical, such oversight isn’t easy in theory or practice. To manage a project’s cost, everyone must work together. A “cost management doctrine” can help. Executive management originates this document. It assures regulatory compliance, reflects the firm’s “financial policy” and portrays realistic “life cycle costing,” thus allowing project managers to spend a bit more now for quality components that will save money in the long run. Developing a budget for the project requires several layers of thinking and planning, including:

  • “Internal resources” – Don’t forget that any human resources from inside your organization have monetary and time costs. Yes, the people who join a project already earn salaries, but a special project takes time away from their regular work.
  • “Cost of managing” –Projects need “in-house” management and this, too, is a cost.
  • “Risk contingency” – Set aside money to stabilize a project that goes offtrack. If the project manager has to tap into this fund, that’s a red flag about the project.
  • Other costs – If the project uses the work of another corporate unit, account for it as “internal services costing.” Someone on a project may need to travel, or the project may require “additional insurance” or a consultant. You must budget for such items.
“Vision, mission, value and quality statements designed as rhetoric will achieve their goal: rhetoric.”

Once the budget is in place, track the project’s fiscal progress by checking the “baseline,” (what was planned), the “actuals” (what’s really being spent) and the “current plan” (with updates). For project control, track all outlays and exercise oversight. Ensure that projects unfold properly and function as part of the firm’s larger strategic intent, organization and process. Keep the project aligned with corporate strategic objectives.

“If work has no purpose, then don’t do the work.”

Use quality control to monitor the project: Determine which achievements you can measure that will show how the project is going and when it is finished. Drill down to the details; decide what success will look like. You can also use “quality assurance” to follow a project’s execution. Establish a process for tracking relevant metrics. Request “regular reviews and reporting,” short presentations that allow participants to communicate with you and allow you to notify them about any changes. As an executive, you establish the culture within which projects unfold. Cultures can support projects or allow them to cut corners. At best, a strong culture can help a company manage change and prevent it from disrupting projects. Align any project alterations with organizational goals. Respect the project’s original “charter.” Properly handled, change opens the door to “inspiration, creativity and experimentation” in projects. To manage change well, control the project’s overall setting.

Two Final Items

First, monitor all your company’s projects to ensure that you run a “balanced portfolio.” This serves the entire organization by managing its full range of goals and opportunities. A balanced portfolio should contain enough risk – but not too much. Closely scrutinize projects whose cost might outrun their benefits. Second and finally, carefully consider the practice of outsourcing projects or parts of projects. Yes, it can save money and open up an “infinite resource pool,” but outsourcing involves a good deal of risk. Do not sacrifice quality or give away your company’s secrets. Establish sound methods for analyzing any work produced outside your organization.

About the Author

30-year project management veteran, Michael Bender is CEO of Ally Business Developers.

Read summary...
A Manager's Guide to Project Management

Book A Manager's Guide to Project Management

Learn How to Apply Best Practices

FT Press,
 


28 June 2025

House of Cards

Recommendation

The 2008 collapse of leading Wall Street investment house Bear Stearns showed the world just how rickety the global financial system had become. William D. Cohan tracks the firm’s dizzying rise and rapid collapse. His access to Bear Stearns insiders is the book’s strongest point. He offers a trenchant analysis of its decades-long rise and a definitive account of its final days. Cohan paints textured portraits of Bear’s top people, though he isn’t especially interested in translating their Wall Street jargon for lay readers. He lets his sources speak in their own patois. BooksInShort recommends this book to business history buffs, investors and managers seeking perspective on a spectacular failure.

Take-Aways

  • Bear Stearns collapsed soon after the ouster of longtime CEO, Jimmy Cayne.
  • During Cayne’s watch, his pay as CEO soared, as did the firm’s profits and assets.
  • Three CEOs, Cayne, Ace Greenberg and Cy Lewis, shaped Bear’s culture.
  • Bear boasted a $400 billion balance sheet, occupied a new $1.5-billion headquarters and gave its executives Wall Street’s most generous compensation package.
  • Cayne failed to diversify Bear Stearns’s business and only vaguely understood the risk of complex mortgage-backed securities.
  • The fatal run on Bear’s assets began when investors and lenders questioned its liquidity. In March 2008, Bear Stearns went from solvent to illiquid within 24 hours.
  • On Thursday, March 16, JPMorgan Chase CEO Jamie Dimon began negotiating to buy Bear Stearns.
  • After an all-nighter, JPMorgan and the Fed announced funding for “up to 28 days.”
  • Investors were suspicious of the deal. On Friday, Bear’s shares plunged 50% to $30.
  • The Fed insisted Bear be taken over by Monday – and it was. JPMorgan paid $2 a share, closing Wall Street’s titan.

Summary

Bear Stearns’s Fast Fall

March 2008: The historic housing boom had reversed. The bubble hadn’t burst entirely, but signs of trouble loomed. Thornburg Mortgage was beset by margin calls, while Carlyle Group, a private equity firm, hit a rough spot when its residential mortgage-backed securities proved difficult to value as housing prices fell. Those firms were relatively obscure, but Bear Stearns was not. Bear was Wall Street’s fifth-largest securities firm, with a $400 billion balance sheet and a new $1.5 billion headquarters. Its executives were the best-paid people on Wall Street. A hugely profitable titan, feared by its rivals, it was a household name abruptly facing shocking collapse.

“Nothing seemed amiss at Bear. But some inside the firm were very scared.”

Longtime chairman Ace Greenberg had become a cult figure for, among other things, his quirky insistence that staffers recycle paper clips from incoming mail. Bear’s annual Palm Beach media conference drew the heads of Viacom, Disney and NBC Universal. Its failure was nearly unthinkable. But, given Bear Stearns’s heavy exposure to the suddenly collapsing mortgage market, other traders began to whisper about its liquidity crisis. Despite the rumors, or maybe due to them, Bear presented itself as a strong player. On March 4, it said that on March 20 it would release first-quarter results showing a $115 million profit and $17.3 billion “available liquidity.”

“Since Wall Street is a confidence game...for counterparties on routine trades to start asking pointed questions about things as fundamental as cash and liquidity is not...good for business.”

Not everyone was convinced. One anonymous Yahoo! message board writer described Bear Stearns as “way overleveraged.” On March 5, hedge fund manager Bennet Sedacca wrote on the Minyanville Web site that Bear Stearns and Lehman Brothers were about to take massive hits. Both held large amounts of mortgage-backed securities, but the value of the homes underlying those securities was plummeting. Sedacca scoffed at the “nuclear waste” in both banks’ portfolios. On March 6, Tim Geithner, president of the Federal Reserve Bank of New York [now U.S. Treasury Secretary], warned that the economy was on shaky footing due to an era of loose credit and Wall Street’s “rapid innovation” of products like credit default swaps.

“The Bear Stearns board’s lack of involvement...in the firm’s financial meltdown could be interpreted as a near-abdication of its fiduciary responsibility.”

Jim Cramer, host of the CNBC TV show Mad Money, remained a Bear Stearns cheerleader. On March 6, with Bear Stearns shares at $69, Cramer told viewers, “I’m not giving up.” But some of Bear’s crucial trading partners were. When Bear asked a major European bank for $2 billion in short-term credit, it said no. “Being denied such a loan is the Wall Street equivalent of having your buddy refuse to front you $5 the day before payday,” wrote Fortune magazine’s Roddy Boyd. The hits kept coming. Monday, March 10, Bear Stearns shares fell 10% after Moody’s downgraded 15 mortgage bonds. The Rabobank Group of the Netherlands refused to renew a $2 billion line of credit. But, Bear Stearns CEO Alan D. Schwartz kept denying that anything was amiss, saying publicly, “Bear Stearns’s balance sheet, liquidity and capital remain strong.”

“Dimon quickly realized that the bankruptcy of...Bear Stearns would be a disaster.”

The skeptics massed. On March 10, the most popular option on Bear Stearns shares was a bet that the stock would trade at $30 on March 21, a stunning 50% decline. Some traders on that path could have been institutions looking to hedge the risk of a Bear failure. One unknown trader bet $1.7 million that Bear Stearns’s shares would drop more than 50%, a wager so improbable that one observer likened it to “buying a lottery ticket.” Aggressive options trades fed rumors among financial regulators, traders, journalists and clients that a run on the bank was imminent. On Tuesday, March 11, Dutch bank ING Group rescinded Bear’s $500 million financing commitment. Banking research analyst Richard X. Bove predicted that Bear would have to be sold because it “did not get out of the way fast enough.”

The Bank Run Intensifies

Cramer again took Bear’s side. On Mad Money on March 11, he said, “Bear Stearns is not in trouble! If anything it is more likely to be taken over. Don’t move your money from Bear. That’s just being silly!” On March 12, Schwartz appeared on CNBC and sounded similar themes, though in less colorful language. He said Bear had a $17 billion cash cushion. “We don’t see any pressure on our liquidity, let alone a liquidity crisis,” Schwartz told viewers. Many insiders weren’t so optimistic. Later that day, Schwartz met with Bear Stearns executives who urged him to sell some of its $15 billion in liquid securities to raise cash. Schwartz declined, fearing that would “signal” weakness to the market.

“It became clear that the terms on which JPMorgan would lend Bear Stearns money would be onerous indeed.”

When Schwartz spoke with Geithner on Wednesday, March 13, many insiders thought he was overly optimistic. Saudi investors offered to inject “a significant amount” to keep Bear afloat, but Schwartz responded, “We don’t need capital.” Other executives told him clients were pulling money out – hedge fund giants D.E. Shaw and Renaissance Technologies removed billions – and that the firm was teetering. Schwartz tried to reassure his managers that everything would be fine, a disconnect one major client called “surreal.”

“The Fed and the Treasury were closely examining Bears’ liquidity at the end of Friday and were not happy.”

Meanwhile, pressure on mortgage-backed securities intensified. Bear Stearns was in a deepening hole. Clients were pulling money out rapidly and other firms stopped honoring its trades. On Friday, March 7, Bear Stearns had $18.3 billion in cash, but from the morning of March 12, the following Wednesday, to the next afternoon, it went from “solvent to dead,” as one executive recalled. By Thursday, March 13, Bear had only $5.9 billion in cash. It owed Citigroup $2.4 billion, and had borrowed billions on the repo market. The once-vaunted firm was on the edge of a collapse that could roil markets across the globe.

“The price must be a typo...since surely a company that 14 months earlier had been trading at $172.69 per share could not now be worth so little.”

On Thursday night, Jamie Dimon, chairman and CEO of JPMorgan Chase, was celebrating his 52nd birthday at a Manhattan restaurant when he got a call from Schwartz asking for $30 billion. Dimon said no, but quickly phoned Geithner, Federal Reserve Chairman Ben Bernanke and then-Treasury Secretary Hank Paulson. Dimon concluded that Bear’s collapse would be disastrous, so he changed his mind about helping it in some way. JPMorgan Chase and Bear Stearns executives convened a series of all-night meetings. By Friday morning, Bear Stearns executives were celebrating. They thought Bear had bought some critical time. But when JPMorgan Chase announced the details behind its effort – in tandem with the Federal Reserve – to provide crucial funding to Bear Stearns, its executives stopped celebrating. The announcement did not mention JPMorgan buying Bear, and it promised funding for only, “an initial period of up to 28 days.” JPMorgan’s announcement stressed that the arrangement posed no risk to its shareholders.

“The roots of the firm’s problems are found deep in its unique corporate culture.”

Investors welcomed the news at first. Bear shares rose 10% to $64. By 10:15 a.m., though, shares plunged to $30. Oppenheimer analyst Meredith Whitney downgraded Bear Stearns as too highly leveraged, saying that its reputation had taken a deadly blow. “A company is only as solvent as the perception of its solvency,” she wrote. Standard & Poor’s, Moody’s and Fitch slashed their ratings on Bear’s debt. Bear’s CEO Schwartz kept his upper lip stiff. When Steve Schwarzman, billionaire co-founder of the Blackstone Group, called that day to offer help, he said no.

A Weekend of All-Nighters

Bear Stearns stressed-out managers went home for the weekend with the impression that they had bought 27 days to turn the firm around. By then, though, Geithner and Paulson had begun to scrutinize Bear Stearns, and they didn’t like what they saw. The pair called Schwartz and told him Bear couldn’t open for business on Monday. “The run accelerated over the course of the day Friday, and I wasn’t going to lend into the run,” Geithner said. Bear Stearns’s executives faced the sickening reality that their 28-day deal with the Fed and JPMorgan was really a one-day deal.

“The holy grail of investment banking became increasing short-term profits and short-term bonuses at the expense of the long-term.”

That led to another series of all-nighters over the weekend as some 200 of JPMorgan’s top executives began digging into Bear Stearns’s books. Dimon warned that JPMorgan was likely to pay only $10 a share. That struck the Bear managers as insultingly low, but it hit some of Dimon’s own people as ridiculously high. One JPMorgan senior banker asked why his firm would take on the ruined company, “other than out of some patriotic sense of obligation?” Indeed, JPMorgan concluded that Bear Stearns had overvalued its mortgage securities and walked away from the deal entirely. Worried about the fallout if Bear liquidated, the Fed agreed to take $30 billion of Bear Stearns’s most toxic assets. That assurance brought JPMorgan back to the table, but its offer plunged to $4 a share, then $2.

“[Cayne] could decide when to buy or sell a stock, but when it came to understanding the calculus of and risks inherent in, say, a CDO-squared (that is, a collateralized debt obligation backed not by a pool of bonds and loans but by CDO tranches), well, that was a bridge too far.”

Bear insiders were outraged. A mere 14 months earlier, when Bear led the financial world, its shares topped $172. No one suffered from its collapse more acutely than longtime CEO Jimmy Cayne, who was chairman at the time. At Bear’s peak, his six million shares were worth more than $1 billion. Now, they were worth $12 million. Bruce Sherman, head of Private Capital Management in Naples, Florida, was another big loser, taking a $475 million hit. Sherman came to Cayne’s office on Monday morning. “There was a mugging,” Cayne told him. Others used stronger language. When Dimon spoke to Bear Stearns’s troops and described the merger as a “shotgun wedding,” a Bear broker stood up and retorted, “I’d call this a shotgun wedding to a rapist.” Cayne toyed with rejecting the JPMorgan offer and filing for bankruptcy instead, but by the time the shareholders met, JPMorgan had amassed nearly half of Bear’s shares to ensure that the vote would go its way. In May, Bear Stearns shareholders overwhelmingly approved the deal.

Bear’s Peculiar Culture

Bear Stearns didn’t collapse in one month, of course. Its decades-long history and peculiar culture set it up for dizzying success and a vertiginous fall. Three forceful leaders largely shaped the firm: Cy Lewis, Ace Greenberg and Jimmy Cayne. Lewis, a gruff giant, sold shoes before joining Bear Stearns in 1933. He made his mark loading up on depressed railroad bonds. The government had seized the trains for the war effort, so bonds traded for as little as five cents on the dollar. Lewis bet the firm on this gambit, which paid off handsomely after the war, when the bonds soared. He also pioneered block trading: buying and selling large chunks of stock for institutions.

“The blame for the firm’s failure to diversify, as Cayne now admits, rested squarely on his shoulders.”

In 1949, Bear Stearns hired a new clerk, Alan C. “Ace” Greenberg, a Midwesterner who came to Wall Street after college. Within a few years, he ascended to head of risk arbitrage. Greenberg’s star rose in the early 1960s when he persuaded Lewis to sell money-losing positions so that the firm could buy up American Viscose. A takeover caused shares to spike. Lewis, meantime, was losing internal power as his heavy drinking hurt his credibility.

“Cayne was the only billionaire CEO among the titans of Wall Street securities firms...that put an extra swagger in his step [because] a college dropout and self-made man had bested the lot of them doing it his way.”

In 1969, Greenberg hired Cayne to help launch Bear Stearns’s retail brokerage unit. Cayne was an unpolished hustler, a champion bridge player who had dropped out of college, and hungered for respect and money. He excelled at Bear, rising to become the firm’s number two partner in the early 1980s. He befriended his boss, as much as anyone could befriend the notoriously chilly Greenberg. He required all partners to give 4% of their pay to charity. In his tone-deaf way, he made a $1 million donation in 1998 to buy Viagra for men who couldn’t afford it, but said he gave the money because he owned Pfizer shares. He was notoriously cheap. Writing under a pseudonym, he sent out memos urging staffers to use inter-office envelopes twice by licking only half of the glue strip each time.

As Wall Street firms began to go public, starting with Donaldson Lufkin Jenrette in 1970 and Merrill Lynch in 1971, the risk calculus shifted. Once, a firm’s partners took the risks. Now, they pushed the risks onto faceless shareholders. Slowly, Wall Street began to chase short-term scores and year-end bonuses at the expense of long-term profitability. Greenberg and Cayne were Wall Street’s highest-paid executives in 1987, a trend that held until Bear’s collapse. Cayne succeeded Greenberg as CEO, and lived very well for years, savoring $150 cigars and compensation packages as high as $25 million a year. At the market’s 2006 peak, he was the only billionaire CEO among Wall Street securities firms, based on his huge holdings of Bear Stearns shares.

Cayne did not earn all that money due to his encyclopedic command of the latest arcane Wall Street products. In fact, he didn’t realize just how risky Bear’s mortgage-backed portfolio had become. For example, Bear’s Ralph Cioffi ran a hedge fund full of mortgage-backed securities, but he told investors it held less risky assets backed by credit cards and auto loans. Cayne and his cohorts had little idea what Cioffi was up to, even as the fund imploded. Unlike Greenberg, who told employees to bring such problems to his attention anonymously, Cayne seemed uninterested in details or in diversifying the business. He scoffed at a 2001 opportunity to purchase asset manager Neuberger Berman, and dismissed a 2002 offer by Dimon, then at Bank One, to buy Bear Stearns. In fact, Cayne’s behavior grew erratic by 2007. While other firms raised capital, Cayne did nothing. He disappeared in mid-crisis to play bridge and golf. In January 2008, Schwartz replaced Cayne as CEO, but the die was already cast. Bear Stearns would soon be gone.

About the Author

William D. Cohan, former senior Wall Street investment banker, is the author of the New York Times bestsellers House of Cards and The Last Tycoons. That book also received the Financial Times Goldman Sachs Award. He writes for the Financial Times, The Atlantic, The New York Times and The Washington Post and is a contributing editor to Fortune magazine.

Read summary...
House of Cards

Book House of Cards

A Tale of Hubris and Wretched Excess on Wall Street

Doubleday Broadway,
First Edition:2009
 


28 June 2025

In the Company of Giants

Recommendation

Rama Dev Jager and Rafael Ortiz present an excellent series of 16 interviews with the digital world’s most successful leaders: Bill Gates, Steve Jobs, T.J. Rodgers, Gordon Eubanks, Steve Case, Scott Cook, Sandy Kurtzig, John Warnock, Charles Geschke, Michael Dell, Charles Wang, Andy Grove, Trip Hawkins, Ed McCracken, Ken Olsen, and Bill Hewlett. Each interview begins with a brief history of how each person founded a company and produced groundbreaking change in the digital industry. These pioneers answer many probing questions about their achievements, visions for the future of electronic technology, and tips for success. Their interview responses are highly informative and engaging. The book is thoughtfully written and well edited. Although much of its advice will be familiar to experienced marketers, managers, and executives, BooksInShort recommends it to them because of the useful and interesting inside look at the techniques and insights these industry leaders employed to such successful results.

Take-Aways

  • Many entrepreneurs built their companies not because they had master plans to build big firms, but because they got frustrated by the ineptitude, politics, or mediocrity of the companies for which they were working.
  • To build a great success, you need extraordinary A+ people.
  • Create an environment that encourages good people to work together.
  • One of your core values should be winning.
  • To make a company successful you need people, process, product, and passion.
  • You need to have a strong belief in your product or service and persevere until your idea succeeds.
  • You need to know your customer cold. Take time to really understand your customers and their behavior.
  • People are the key in turning a really good idea into a successful company.
  • To succeed, build partnerships with other companies and anticipate the future.
  • Give your customers better value.

Summary

The Giants of the Computer Industry

While hundreds of entrepreneurs have had great ideas and started great companies, these computer industry giants not only started with great ideas, but managed the teams that implemented them. Then, they built great organizations and turned companies with one great product into companies with diverse marketplace offerings.

“If winning is not a core value you bumble along with mediocre performance until you get acquired or get fired.” [T.J. Rodgers]

These giants were especially influential because they created an industry known for dynamically changing the way people exist. They produced generational change.

These leaders have talent, as well as good luck. Commonly, they began as entrepreneurs but they did not start out because they had master plans for success. Rather, they each describe being frustrated by the ineptitude, politics, and mediocrity of companies they once worked for and left. Often, the companies that employed them failed to recognize the worth of their innovative ideas.

Steve Jobs: Emphasize Only the Best

Steve Jobs is one of many computer giants who benefited from earlier work that had not been further developed and marketed. Jobs and Steve Wozniack had already brought out the Apple II in 1982, when they saw a demonstration of a prototype computer that featured graphic icons and pull-down menus. They used these ideas to develop the Lisa, the "mother of the Macintosh," which helped transform the digital world. However, beyond ideas alone, Jobs’ commitment to quality and his passion for this new product motivated the Macintosh team to work long hours and to achieve in peak performance.

“Ironically, many of the stories of successful entrepreneurs were not born from master plans for world domination, but of sheer frustration with the ineptitude, politics and mediocrity of the companies they abandoned.”

Jobs says that one key to his success is finding "extraordinary people" and creating an environment that makes them feel surrounded by other people who are equally talented. He says it is also important to make people feel that their work is "bigger than they are" and is "part of a strong, clear vision."

“Simply put, the new paradigm for entrepreneurs to grapple with is the notion that computers connected to others - communicating and sharing information amongst them - increases their value tremendously to users.”

Choosing good people is especially vital when you are creating a start up, since a small company is even more dependent on great people than a big company. You need great people to make sure your product is really good and to get it to market as quickly as possible.

To recruit really top people, look at the results applicants have achieved. If they haven’t been in a position to influence results, assess their potential - especially their intelligence, ability to learn quickly, drive, and passion. Listen to your gut feelings; as you hire more and more people, your gut feelings will become more and more accurate.

“In order to do things well that can’t be done by one person, you must find extraordinary people. A small team of A+ players can run circles around a giant team of B and C players. That’s what I’ve tried to do.” [Steven Jobs]

Be ready to change with the times and be focused on the customer. One of the reasons Apple declined when John Sculley took over was that the top management got very corrupt about their purpose. They became very financially motivated, rather than being concerned with the customer and with making the best computers in the world. Apple’s greatest mistake was not - as many believe - that it failed to license its technology in the late 1980s, but that it got intensely greedy.

T. J. Rodgers: A Commitment to Vision

Cypress Semiconductor is an international supplier of integrated circuits (or chips) for high-performance computers, telecommunications devices, and other instruments. Founder T.J. Rodgers is committed to quality. The company began with the goal of making a technically superior product based on expanding computer memory. They ended up making a product that was also faster and less expensive

“It’s not just recruiting. After recruiting, it’s then building an environment that makes people feel they are surrounded by equally talented people and that their work is bigger than they are.” [Steven Jobs]

Rodgers maintains that "knowledge is equal to profit." Focus on what you know and do well. Let other companies do the tasks that they can do better.

A corporate culture is also very influential. You need a commitment to positive core values, such as telling the truth, a central core value at Cypress. Other key values include a commitment to winning and to hiring only the best people. Otherwise, Rodgers says, you will "bumble along with mediocre performance" until you either fail or get taken over by someone else who is better. You should do what’s right for the company and make your numbers by setting aggressive quantitative goals in all areas.

Gordon Eubanks: Provide Customer Value

Gordon Eubanks built Symantec after becoming dissatisfied with the management at Digital Research, where he was a Vice-President. He pursued a strategy of purchasing other companies to gain access to top quality people and a diversified product line.

“Knowledge is equal to profit. It’s very simple. When you can’t justify something by being confident and knowledgeable and when somebody else can perform the same task more cheaply and efficiently, you’ll let them do it and focus on what you know and do well.” [T.J. Rodgers]

In Eubanks’ view, you have a good basis for starting a company when new technology allows you to do something cheaper than was previously possible. Then, as happened with the fax machine, you can broaden the market. As an alternative, you can take over an already existing customer base. This happened when the minicomputer industry made computing power cheaper than mainframes.

“Most companies get started on incremental value-added ideas. What you are trying to do is give value to the customer.” [Gordon Eubanks]

You can make products increasingly functional by adding value to them. This is the motivation behind integrating two products. At some point, it doesn’t work to make products incrementally better, such as when Microsoft Excel put Lotus 1-2-3 out of business, after Lotus did the same to VisiCalc. The market is no longer seeking an incrementally better spreadsheet. Instead, you need an idea that adds value to the customer, an innovation that is worthwhile to the consumer. Four qualities create success in the long run: people, process, product, and passion. A certain amount of good luck is necessary, too, like being in the right place at the right time. While talented people do well, how well they do is up to chance as well.

Steve Case and Scott Cook: Paying Attention to the Customer

Before he started America Online, Steve Case was a marketing manager for shampoo and toothpaste at Procter & Gamble. He began AOL because he believed strongly in providing a new kind of service for customers. He persevered until his idea succeeded. His idea was to make the AOL interface much simpler for users and to promote it heavily to create brand recognition. He created a partnership with many PC manufacturers to make his service more widely known, even while his company was still small. Case’s keys for success include having a better product, very strong consumer acceptance, and word-of-mouth.

“What makes a company successful from a big-picture point of view is people, process, product, and passion...Everyone believes in passion. But as you begin to build a company, you have to balance passion with process or the company will implode.” [Gordon Eubanks]

The better product was especially important, because you can only get a customer to try a subscription service. Then, the customer has to like it enough to come back. This requires a high-quality product that is relevant to your customer’s interests.

Scott Cook, the founder of Intuit, known for its Quicken personal-finance software, also found that his businesses hinged on paying attention to the customer. Unable to attract initial venture capital, he got about $200,000 from family and friends. Because he had done his market research, he was confident he had a good product. In his view, "knowing your customer cold" was pivotal to his success. This requires spending time learning to understand your customers and their behavior. You have to determine how your product or solution is better than others. For example, look at how customers react in a usability lab. Customers may not be able to tell you what they want, but you can study their habits and practices. Don’t just rely on outside marketing research firms or statistics. Talk to customers. Call them on the phone, spend time with them, and watch them in usability tests.

Sandy Kurtzig, John Warnock and Charles Geschke: Build Partnerships

Sandy Kurtzig started ASK as a part-time venture to create specialty software that manufacturers could use to manage inventory and other operations. Then, as she worked for more and more manufacturers, she was able to create a standardized program that could be customized for particular customers. In building a big company, she found having "the best people" especially important. You need good people, because there are plenty of opportunities and good ideas. But it’s the people who are able to take the really good ideas and make a company that makes a difference. In the beginning, because this is hard to do, people are more willing to take risks, because they have little to lose.

“In retrospect, having little capital was probably the best thing that happened to us, because it forced us to be a little bit nimbler and think more like guerilla marketers and provide a service that people really liked. Had somebody given us more capital early on, it probably would have been a bad thing.” [Steve Case]

John Warnock and Charles Geschke created Adobe Systems. While working for someone else, they found that the top managers at Xerox didn’t see any commercial value in their technology for linking printers and computers to print any kind of text and images. So, they built Adobe, which is well known for its Acrobat reader and related products. They grew by developing partnerships with other companies. They started with a partnership with Apple, and then went on to create partnerships with IBM, HP, and other firms. With this approach, they didn’t have to do any manufacturing or build a big sales force. They earned a royalty for their software. For them, some of the keys to success include building synergies with other companies and recognizing when you hit a plateau as a top executive, so you can delegate effectively to other people. Do not develop only for what the market is today. Build an infrastructure for your company that allows you to anticipate the future.

Other Success Secrets

Other successful CEOs of digital companies - Michael Dell, Michael Wang, Bill Gates, Andy Grove, Trip Hawkins, and Ed McCracken - similarly gained success. They each discuss having the best products, being concerned about customers, providing customer value, taking advantage of opportunities, developing partnerships and alliances, finding the best people, and otherwise applying well-known success principles.

Michael Dell, who founded Dell Computers, found the secret of success in selling computers directly to the customer. This enabled him to gain higher margins through reduced overhead, so he could give the customer better value. Michael Wang pursued an aggressive "cookie monster" strategy of acquiring more than sixty other companies and focusing on business-to-business applications. Bill Gates gained his tremendous success by being quick to respond to new technologies and to pursue new opportunities aggressively. His philosophy was not to win, but to have "better products," bring in "great people," and pursue a long-term strategy for success.

For Andy Grove at Intel, known for its semiconductor chips, the key has been continual improvement and hard work in navigating change. Other executives, such as Ken Olsen of Digital Equipment Corporation and Bill Hewlett of Hewlett Packard, found similar strategies for success in coming up with good products to provide customer value and having good people in their companies to market them.

About the Authors

Rama Dev Jager,  who holds a BS in Biomedical Engineering from Northwestern and an MBA from Stanford University, is the co-founder of EMCard, a healthcare information technology startup that developed the first comprehensive portable medical record. Rafael Ortiz,  who also has his MBA from Stanford, works in product management for OnLive! Technologies, a Silicon Valley start-up, and worked in product marketing and sales for Apple Computer and ROLM.

Read summary...
In the Company of Giants

Book In the Company of Giants

Candid Conversations with Visionaries of the Digital World

McGraw-Hill,
 



All Articles
Load More