Thursday, April 08, 2010

Statement Analysis on Books

Books are absolutely fantastic and I read plenty of them. Books as if they were falling off the sky. Not every book has the same values in terms of knowledge, usefulness, etc. Truthfulness in books may also be questioned contrary to the popular belief — if it is written, it is true. I do not take anything in a book for granted. The type of books is often a good predictor of level of truthfulness to expect but it is not an absolute.

For example, scientific books heavily rely on scientific data and previously written papers; lying in scientific books or papers is a career breaker. Sales and marketing books have a higher level of deception, if only for trying to sell you the book in every chapter even though you've already bought it. Literature is yet a whole different beast.

Statement analysis becomes a tool of choice while reading books. It is also a stimulating challenge for anyone who study statement analysis because authors spend months and sometimes years to write their books. In short, clues of deception in books are at most extremely subtle.

Let's dig into a real life examples to get a better feel about this.

I have recently read “The Knack : How Street-Smart Entrepreneurs Learn To Handle Whatever Comes Up” written by Norm Brodsky and Bo Burlingham. The book has been subsequently renamed in its 2010 edition, see here.

The book is absolutely fantastic and it is really about hard earned experience through failures (more than successes), with great lessons to be learned. I can relate to the content of this book in many ways with my more-than-a-decade business experience. Entrepreneurs-to-be and first-time business owners might not fully understand the message in this book before a decade or two being in business. It's still a great book for both aspiring and long-time entrepreneurs.

You may very well wonder how could this book be so fantastic if it is deceptive.

The book is not deceptive in the sense that you are buying a business savvy book and get instead a fairy tale with bunnies. It is more in the range of an autobiography, where every author is tempted to prettify his or her past in order to attract more readers or lessen the gravity of his or her own acts.

Norm Brodsky writes about lessons he received from his late father:

Or when I talked about things I'd like to have, he'd say, "You don't ask, you don't get," whereupon I'd request a bigger allowance. He'd smile and say, "Nice try, but just because you ask doesn't mean you're going to get it." Much later I came to understand that he'd been giving me my first lesson in selling. Page 2

Notice the verb tenses throughout the paragraph. Would is used in an ambiguous manner where it becomes unclear whether the verb tenses are conditional or past continuous. “I'd like to have [if only I could]” is conditional. “He'd say [usually | whenever I tell what I would like]” is either past continuous or conditional. The rest of the paragraph implies that it is past continuous but past continuous is used in the context of repeated past actions. Would you believe Norm Brodsky having this exact same conversation over the years just like you'd have your eggs in the morning? Unlikely.

The bottom line is straightforward but not simple: it is a mixture of factors that have influenced the manner this paragraph has been written. I am inclined to believe this is partially based on (1) true events between Norm Brodsky and his father, (2) it is also how he remembers his father (memory tends to blur over time) and what he would normally say in such situation, (3) he tends to use would more often than another person would, and (4) this makes a great story to tell. A great story to tell is a great asset to a salesperson like Norm Brodsky.

Norm Brodsky writes about having the business mentality taught in his book:

You win more than you lose, and the longer you stay in the game, the more often you come out on top. Page 3

The author tries to tell us that the lessons from his book help you to win and come out on top. He did indeed write a disclaimer beforehand, to his credit, stipulating that it is not a magic recipe, which should be welcomed by the readers. However, this paragraph is clearly a sales pitch and yet it has many outrageous admissions.

He does seriously believe you can win with this business mentality. He also admits that you can lose. It just happens that you will win more often than losing. That's exactly what he wrote. Moreover, if you stay long enough, you will be on top more often ...but not always. Just more often.

Norm Brodsky continues on the value of team work in sales, instead of encouraging competition among sales team:

[...] Patti, had to go out of town and asked another salesperson, David, to attend a meeting with a big account she'd been trying to land for months. When David showed up, there were six people waiting who said they were making the final decision that day. He closed the account, and I give him full credit for that, but I also give three stars to Patti for being able to say, "Okay, I trust the people I work with to cover for me." Page 199

The paragraph makes it clear that David receives full credit for the sale, despite what Patti had previously done. Patti however receives three stars for her presence of mind. Three stars out of three? Three stars out of five? Ten? We might never know. This is a deceptive practice since it let us assume what is implied. Norm Brodsky does like team work but closing an account is more important to him.

The structure of the book also tells something really interesting about Norm Brodsky. He made it very clear early on that he had a huge business lesson in his life when he was forced to file for protection from his creditors under Chapter 11 of the bankruptcy code.

This is an highly emotional issue and it was introduced in chapter 2 of his book. Chapter 1 serves a specific purpose to establish the ground of the book and the credibility of its author but this emotional issue would probably otherwise have been in this chapter. Chapter 11 of his book is even more surprising with the title of “The Decision to Grow” and incidentally the reason he had to file for bankruptcy in the past. It is no coincidence to have the book's chapter 11 about the reason he went under chapter 11 of the bankruptcy code but it is likely to have happened in an unconscious manner. Fortunately, Norm Brodsky managed to get on top of his business and recover but it is still clearly an emotional issue and a business lesson he will never forget.

There are many reasons to doubt and challenge everything you read. Not every book has the same quality in content and some books are of little value even though they seem to be incredible. Other books are simply superb and you will appreciate them even more if you do due diligence. The most important is still to be able to decide for yourself what should be in your knowledge base and what should not; statement analysis is a good tool to sort this out.

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