Tuesday, July 25, 2017

Review: Professional Service Firm

Professional Service FirmProfessional Service Firm by Mark C. Scott
My rating: 4 of 5 stars

A very good book, outlining some of the basic principles that one managing a (unit in a) professional service firm should remember, such as:
"If there is one single thing the professional service firms must do right it is attracting and retaining the highest-calibre individuals"

"Differentiation in the form of intellectual human capital is a barrier to new entrants"

"The highly competitive professional service firms will typically have a very low degree of client churn, as it becomes an indispensable part of the client’s value chain."

“The choice of client may dictate the professional development of the firm - it has to be made in full understanding that whatever else happens, the professional life of the firm will not be the same afterwards”

"The client relationships have “time economies”, the counterpart of industry’s “scale economies”. The firm does not need to incur acquisition, learning and start-up costs every time as with a new client."

"It is better to have an excellent general understanding of the issues facing a client and fashion the the professional service firm’s services to meet those needs rather than continuing to sell them the same solution to different problems. The power of the professional service firms is to customise, not to mass market."

"Most healthy PSFs compete on quality and not price. Their focus is achieving high enough levels of value added to sustain higher salaries that competitors and hence maintain the best professional talent."

I liked the systematic approach of the book: most of the principles (some of which are outlined in the quotes above) are substantiated by underlying economics, supported by charts or spreadsheet calculations.

The style of the book is rather dry, there are not that many examples - and those that are mainly come from the advertising industry. Many of the chapters are written with the focus on corporate finance, rather than company management - which might be too detailed if one is not concerned specifically about M&A.

All in all, a really good read and recommended for anyone willing to study economics of the service industry (as opposed to product-based companies / industrials that traditional economics focuses upon).

Tuesday, April 04, 2017

Review: When Genius Failed: The Rise and Fall of Long-Term Capital Management

When Genius Failed: The Rise and Fall of Long-Term Capital ManagementWhen Genius Failed: The Rise and Fall of Long-Term Capital Management by Roger Lowenstein
My rating: 5 of 5 stars

At first, the book did not feel that easy to read: price-to-equity ratios, risk multipliers, derivatives, swap contracts... But the more I read the more it felt like a financial thriller, only more captivating and eye-opening.

The book tells the story of a darling of the Wall Street in the 1990s, the firm that attracted awe of investors, financial regulators, academia and business leaders in general. The firm which was called Long-Term Capital Management was established and ran by the cream of the cream in the U.S. financial industry and financial education. Its investment placements were based on sophisticated mathematical models developed largely by the founders themselves. The partners managed to raise huge amount of investment in a very short time (because everyone else was blindfolded by the partners' credentials) making it one of the most successful start-ups in history. At certain moments, the firm was managing rather astronomical volumes of investments.

And then it all failed. It required an unlikely cooperation of the largest Wall Street banks to avoid a larger financial shock, similar to what happened in 2008 after the fall of Lehman.

There are many lessons to draw from this book:

Financial lessons:
- There is a big difference between investing and gambling. Similarity is that the risk is involved in both.
- Quantifying and estimating risks does not equal avoiding them- one should not mix up these two

Management/business lessons:
- An assembled dream team is the best one can make - it would attract the other dream players, clients and investors alike. Everyone wants to be part of success and it is contagious
- Loyalty and companionship is something that can and shall be fostered
- Risk-taking in a company shall be checked and balanced (to a certain extent)

Personal lessons:
- Greed and hubris have their big limits - you can only go further that much with them

A great example of how a book based on investigative journalism shall be written.

Friday, March 10, 2017

Review: Hansa Liidu ajalugu. Varjatud ülemvõim

Hansa Liidu ajalugu. Varjatud ülemvõimHansa Liidu ajalugu. Varjatud ülemvõim by Gisela Graichen
My rating: 2 of 5 stars

Sain targemaks. Kohati oli põnev lugeda, mismoodi Keskaja Euroopas kaubandus rahvaid ja linnu ühendas.

Kuid sellel teemal oleks saanud kirjutada nii palju huvitavamalt. Peatükid ei ole omavahel väga hästi seotud (viis autorit on sellesse panustanud ja kirjutamise kvaliteet on varieeruv). Üldiselt pigem kuiv ja pigem akadeemiline tekst. Oli ka tunda, et kirjutasid puhtalt ajaloolis-humanitaaria taustaga inimesed, kelle arusaam majandusest ja ärist on võrdlemisi tagasihoidlik - Hansa Liidu kaubanduse sisemine dünaamika ei tulnud kusagilt kuigi hästi välja ja jäi väga pinnapealseks. Ka tõlge saksa keelest eesti keelde tundus kohati nõrk.

Saturday, January 28, 2017

Book Review: Marjustini sajand

Marjustini sajandMarjustini sajand by Marju Lauristin, Ene Hion, Margot Visnap
My rating: 4 of 5 stars

Marju Lauristin on olnud üks parimaid Õpetajaid mu elus. Siiamaani on meeles tema sõnad ühelt loengult: "Ülikool ei õpeta teadmisi. Ülikool õpetab mõtlema". Seetõttu tekkis suur soov see raamat läbi lugeda.

See on väga hea raamat. Siiras, mitmekülgne, õpetlik, mõtlema panev. Väga huvitav oli lugeda Lauristini vanemate tegude motiivide tagamõtetest, Marju Lauristini noorpõlve Tallinnast ja Tartust, taasiseseisvunud Eesti esimese valitsuse tegutsemistest, Euroopa Parlamendi siseelust. Oli kuidagi soe tunne lugeda Tartust ülikoolinnana 1960-1970-ndatel - sest tekkis nii palju paralleele mu enda Tartuga ülikoolilinnana 2000-ndatel (seda eelkõige mõtete vabadust ja lennukust, teadmiste himu rahuldust pakkuva paigana).

Ainuke suurem puudus minu silmis on ehk see, et kohati said Marjustini elu teatud perioodid kajastatud kuidagi justkui kiirustades - oleks tahtnud teada rohkem! Näiteks mis oli ühe Nõukogude Eesti teaduslabori juhataja tavaline tööpäev? Missugused nägid välja 1992.-1994.aastate valitsuse kabinetiistungid? Samas on selge, et nii rikast ja mitmekesist elu elanud inimese biograafiaraamatut kirjutades tuleb paratamatult teha valikuid.

Sunday, December 04, 2016

Review: Raising Cain: Protecting the Emotional Life of Boys

Raising Cain: Protecting the Emotional Life of BoysRaising Cain: Protecting the Emotional Life of Boys by Dan Kindlon
My rating: 5 of 5 stars

“On the one hand, we expect boys to do things they’re developmentally not ready to do, and to be tough ‘little men’ when they’re really just little boys who need goodbye hugs and affection. On the other hand, when they behave in cruel and thoughtless ways, we say, ‘Oh, boys will be boys.’ We let them off the hook over issues of respect and consideration for others.”

I really enjoyed this book. It is written by two psychologists with PhD who practised counselling of troubled boys for many years. It is written well, supported by many examples from authors' practice. What makes this book so trustworthy for me is that I as a former (teenage) boy could recognise past me in many of the chapters and examples of the book.

Wish to appear tough and impress others (other boys, girls, even adults) led me - like many other boys - to some sort of street gang sub-culture in the past. And only eventual realisation of its fakeness as well as good books have derailed me from that path in good time (not some of my former "mates" though - who ended up in jail).

Boys have emotions - just as many and as diverse as girls. The way boys express emotions is different though. Educating boys on possible source of different emotions is as important as educating them on math or writing skills.

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Friday, September 23, 2016

Review: The Lord of the Rings

The Lord of the Rings The Lord of the Rings by J.R.R. Tolkien
My rating: 4 of 5 stars

This is one of the books I wanted to read for a long time. Classics of the genre that influenced several of the PC games I played, films I watched and books I read (when I had more time for such).

Beautiful language, epic story, diverse and rich world of Middle-Earth.

Interestingly, I kept on recalling my lectures on semiotics from the university times - and Vladimir Propp's standard elements of a fairy tale in particular - while reading Tolkien. And indeed - on one hand, it is nothing more than a simple fairy tale, with elements such as the battle of the Good and the Bad, quests, helpers, passes etc. On the other hand, this is probably why it can be called a masterpiece of a genre: Tolkien uses standard elements of a tale in a skillfully systematic and thorough way, enriched by countless colourful details.

And I cannot help noting after having read the book - although it has nothing to do with the book itself - that the film trilogy from 2000s was exceptionally good. I have probably enjoyed the film trilogy even more.

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Sunday, June 26, 2016

Review: The Agile Samurai: How Agile Masters Deliver Great Software

The Agile Samurai: How Agile Masters Deliver Great Software The Agile Samurai: How Agile Masters Deliver Great Software by Jonathan Rasmusson
My rating: 5 of 5 stars

One of the best books on Agile software development that I have read. Its beauty lies in its simplicity: clear, down-to-earth guide through the Agile principles, planning, estimating, analysis, development, communication with clients, and testing. Some overall principles like honest communication with clients as early as possible, just-in-time and just-enough analysis, visualising your project and your pace of development are covered well throughout the book.

The book is also well illustrated: graphs and cartoons are helpful and make the point of the author even clearer.

The general "story wrapper" of the book - that a novice student is learning the Agile principles from a Samurai - was not very insightful, yet not disturbing. It could by and large just be ignored

Friday, April 29, 2016

Review: It's Hidden Face: Everything You Always Wanted to Know about Information Technology. a Look Behind the Scenes

It's Hidden Face: Everything You Always Wanted to Know about Information Technology. a Look Behind the Scenes It's Hidden Face: Everything You Always Wanted to Know about Information Technology. a Look Behind the Scenes by Claude Roeltgen
My rating: 3 of 5 stars

A (former) Chief Information Officer of a bank in Luxembourg provides an interesting view on the role of information technology nowadays. He states (quite correctly) that information technology is still very immature compared to, say, automobile industry. In particular, aspects of reliability and security are way behind what one can find in the other industries. I found author's comparisons to automobile world quite thought-provoking: one quote from the book is that "If the automotive had followed the same development cycle as the computer, a Rolls-Royce would today cost $100, get a million miles per gallon, and explode once a year, killing everyone inside”.

It was also intriguing to read the author's sarcastic thoughts on software development by external vendors (an author is someone who has been ordering it from outsourced companies): for example different sales tricks that software developments contractors consistently use ("This is just a plug-and-play system!").

On the other hand, the author's sarcastic jokes, anecdotes from the past and off-topic chapters tend sometimes to override the serious messages of the book. The English translation of it (the original is in German) is perhaps not the best one either, as it does not always read that fluently.

Overall, an interesting read if one is trying to understand the scope of work of corporate CIOs.
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