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Book Reviews

Overdrive: Bill Gates and the Race to Control Cyberspace

by James Wallace

Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time

by Howard Schultz and Dori Jones Yang

Golden Phoenix: The Biography of Peter Munk

by Richard Rohmer

Buffettology: The Previously Unexplained Techniques That Have Made Warren Buffett the World’s Most Famous Investor

by Mary Buffett and David Clark

Ever since former Chrysler chairman Lee Iacocca wrote his autobiography in 1984, there’s been a long-running boom in books by and about chief executive officers. The best of these combine business insight and personal revelation with the high-stakes drama of corporate dealmaking and usually say something interesting about the way we see our economy, our society, and ourselves.

They also satisfy a deep curiosity about the lives of the rich and powerful. What is it like to control such immense wealth – to have the fame and fortune of a movie star, and more power than most politicians?

Howard Schultz may not be a household name, but it seems you can’t walk your dog these days without passing by the green and white logo of Starbucks, the gourmet coffee chain he founded in Seattle a decade ago. In Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time (with Dori Jones Yang), Schultz describes his company’s meteoric growth and its “socially conscious” corporate ethos.

A Brooklyn, New York-born baby boomer, Schultz is refreshingly frank about his finances and feelings; he describes weeping after being browbeaten by an investor, hugging an employee who has just revealed he has AIDS, and discussing the mensch appeal of a really good investment banker. Such candour puts a human face on the quick wins and prolonged growing pains that challenged Starbucks during its ascendancy.

However, the story of the company’s metamorphosis into a billion-dollar retail giant with 1,300 outlets worldwide suffers from a relentlessly promotional – and melodramatic – tone (chapter headings include “Act Your Dreams With Open Eyes”; “Luck is the Residue of Design”). Schultz describes his original mission as giving North Americans the opportunity to savour the “romance and mystery” of Italian espresso bars in a place that someone like his father (a blue-collar “beaten man”) could be treated with dignity. True, Starbucks offers health benefits and stock options to all staff – including part-timers (called “partners”) – to prove, as Schultz says, “that a company can lead with its heart and nurture its soul and still make money,” but a more understated – and self-critical approach – would have helped.

Gold baron, real-estate tycoon, and University of Toronto benefactor Peter Munk is one of Canada’s shrewdest and richest CEOs. How he accumulated his wealth and how he came to control a half-dozen companies over the last 40 years is documented extensively in Richard Rohmer’s Golden Phoenix: The Biography of Peter Munk.

A historian and novelist, as well as a biographer, Rohmer writes vividly in the first several chapters of Munk’s Hungarian childhood, his escape from Budapest during the Second World War, and his gadabout coming-of-age in Toronto. We also learn about the significance of Clairtone, a boom-to-bust stereo company that Munk and his longtime business partner David Gilmour started in 1958.

It was Munk’s ouster from Clairtone a decade later that prompted him to devise two business principles that guided him thereafter: his companies would be funded primarily from equity, not debt; and he would demand controlling interest in a business he ran, even if he did not have the required majority of shares.

The remainder of the book is concerned primarily with Munk’s business acumen. Though Golden Phoenix contains photographs of Munk with his family, Prince Charles, George Bush, and Brian Mulroney, relatively few of the 41 chapters are devoted to his personal life or his friendships with international power brokers. A general reader will be disappointed by such exclusions, though anyone interested in business will glean plenty from Munk’s golden rules and how they were applied in acquiring, expanding, and managing two of Canada’s corporate heavyweights – Barrick Gold and TrizecHahn.

In 1995 when Barron’s asked Peter Munk how he felt about being compared to a legendary American investor, the golden phoenix replied: “Warren Buffett is like the god of investments…. It’s like in skiing, when you start getting compared to Jean-Claude Killy you know you are going to come out as a loser.”

Whether Warren Buffett is the deity of the Dow, or just a smart guy with some investment wisdom inherited from the likes of Benjamin Graham, one thing is sure: the more than $20-billion he has made doing what he does best has made him the richest – and the smartest – stock picker in history. Anyone who seeks to emulate that success would be well advised to read Mary Buffett and David Clark’s Buffettology: The Previously Unexplained Techniques That Have Made Warren Buffett the World’s Most Famous Investor.

Dozens of books have been published on Buffett and his buy-and-hold-forever philosophy. Buffettology contains material these tomes don’t. However, its subtitle oversells the claim of “previously unexplained techniques.”

What Mary Buffett, ex-daughter-in-law of Warren Buffett, and portfolio manager David Clark have done is outline Buffett’s multi-layered “business perspective investing” in ways that anyone from a stockbroker to a supply teacher can appreciate.

With tables, sidebars, chapter summaries, and a quote from the German poet Rilke, the first half of Buffettology is something of an “Idiot’s Guide” to the 67-year-old CEO of Berkshire Hathaway. Part Two delineates the tools one needs to understand sophisticated investment theories. Readers who are uninterested in applying equations to determine growth stocks will appreciate the appendix of 54 nifty companies that “Warren has invested in in the past and…will continue to keep his eyes on.” Of course, those who simply run out and acquire stock in Coca-Cola, Disney, or Seagram will have missed the central tenet of Buffettology: when to buy is as important as what to buy.

Warren Buffett loves “consumer monopolies” – firms with powerful brand names, captive markets, and vaults of cash. Which means he’s probably very bullish on Microsoft and its CEO, profiled in Overdrive: Bill Gates and the Race to Control Cyberspace.

In this sequel to his best-selling Hard Drive (1992), Seattle investigative reporter James Wallace brings readers up to date on a CEO who could become the world’s first trillionaire by 2005. Bill Gates is depicted, five years after Wallace’s last examination, as not only wealthier, but more comfortable with his power and influence. Having shrugged off the image of the socially inept, bachelor tycoon (he married in 1994), Gates is depicted hobnobbing with the rich and powerful, shooting golf with President Clinton, schmoozing Chinese leaders, and playing bridge with (who else) Warren Buffett, the second richest billionaire in America – all while his company consolidates its hegemony over PC operating (Windows) and application (MS Office) software.

But it is Wallace’s work on how Microsoft nearly missed the shuttle to cyberspace and allowed Netscape Communications to take an early lead in Internet software that compellingly connects Overdrive’s seven chapters. Wallace, who interviewed scores of industry insiders, narrates events with the skill of a novelist. The reader relishes the missteps that allowed Microsoft’s high-bandwidth brains to miss what a twenty-something Netscape programmer didn’t. Though Wallace doesn’t hide his bias for the Davids in this David-and-Goliath story, the author makes a convincing case for why everyone working outside the Microsoft empire – including the U.S. Justice Department – should fight Gates’s plans to erect the information highway’s first toll booth.