There's no quick fix but here's good news

Clicks and Mortar: Passion Driven Growth in an Internet Driven World by David S Pottruck and Terry Pearce (Jossey-Bass, £16.95)
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The Independent Culture

The questions being asked in the boardrooms of UK plc about the New Economy are changing almost as fast as the economy is developing. First we had "Was it going to happen?" followed rapidly by "What on earth should we do about it?"

The questions being asked in the boardrooms of UK plc about the New Economy are changing almost as fast as the economy is developing. First we had "Was it going to happen?" followed rapidly by "What on earth should we do about it?"

These have been replaced, and the question most often heard is "How can we change our organisations, so they are as innovative and fast moving as these New Economy businesses?"

This book by David Pottruck (president and co-CEO of Charles Schwab) and Terry Pearce (founder of Leadership Communication) is a welcome one. Based on seven years of working together at Charles Schwab, one of the leading New Economy companies, the book outlines the Schwab way.

Mr Pottruck and Mr Pearce rightly reject the notion that this economy will solve an organisation's problems with the injection of a little cash, a few new young staff and putting the prefix "e-" before job titles.

There is no quick fix. The authors describe a more complex (and a more Old Economy) route to passion-driven growth based on the right culture, the right leadership and the right management practices. So why has Charles Schwab managed to increase its size 14-fold in the last decade? And, more importantly, what can we learn that we can apply to our own businesses?

The authors start with the culture, the glue, they argue, that holds the organisation together. This might sound trite, but the first lesson is simply that you should have an internal culture, know what it is and reinforce it through your management practices.

My highly unscientific straw poll suggested that even senior staff in a variety of companies found it difficult to say why they were in business, and even more difficult to express how they put their companies' values into practice.

The second lesson is about leadership, which often includes such issues as living the values, generosity of spirit, showing interest in others, listening to hear, being a coach etc etc. There is already a plethora of unreadable (at least for Europeans), gushing American books already on this and I approached this section with some dread.

To my surprise, I found it extremely readable. Rather than concentrate on Mr Pottruck's successes as a leader, the examples focused mainly on failures and what the authors and the organisation learnt from them.

This approach did much to convince, at least me, that they were serious about what they were saying and practised what they preached.

Only in the third section on management processes are the internet and new ways of doing business mentioned seriously. The lessons are sensible, if in some cases, unpalatable. Technology has become essential to drive businesses. So to manage business, you must have a fundamental grasp of the basic technological details.

Marketing too, has changed. The days of the mass market are over; the market of one is in. The impact of marketing activities can be closely measured and the marketing altered. New approaches are needed which recognise the power of the internet to provide detailed information and for true customer dialogues to occur. The role of the brand will also change. To survive, companies, their managers and leaders must recognise and understand these changes and adapt.

Finally, organisations must also be able to deliver to the customer. Here the older "clicks and mortar" companies with their years of delivering to customers have a distinct advantage. The trick is to understand what advantage it has, not simply to take it for granted. The most successful companies will be those which combine the best features of both "clicks" and "mortar" and use these to produce an enhanced customer experience. Again, this will require change.

So should you read the book? If you want a quick fix, this is not the book for you. If, on the other hand, you believe the New Economy has not overturned all the natural laws of economics and business, then Messrs Pottruck and Pearce have produced an easily readable account of how one, very successful, organisation has adapted to the new world.

The solutions are not easy, they will require significant personal and organisational change and we will all have to learn new skills.

If you are prepared to accept this message, then the book is excellent, the style is easy to read, the examples clear and the arguments cogently put. The book has a good sense of direction and I have no doubt that implementation of the ideas expressed would lead to improved, "passion-driven" performance. I've found myself introducing some of the ideas into my organisation which is probably the highest recommendation of all.

The reviewer is the partner responsible for eCustomer Relationship Managment at PricewaterhouseCoopers and author of 'Business in a Virtual World'

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