Hidden Value: How Great Companies Achieve Extraordinary Results with Ordinary People

This book tells the story of eight extremely successful companies that manage to bring out the best in their people. The stories are detailed descriptions of the company's backgrounds, strategies, systems and management practices. The stories are also larded with quotes from the company's CEO's, HR managers and employees. Following this approach the authors provide the readers the opportunity to form their own hypotheses about the companies' successes. But the authors also present their interpretations of the case studies.What these studies show is how these high performing companies have achieved their success by aligning their values, strategies and people. This is something which is easy to understand but hard to do. It requires consistent articulation and implementation of the values and vision and a relentless attention to detail in ensuring that all policies and practices support the company's values. In order to be able to show this kind of consistency a real belief and commitment are needed and a willingness to persevere.This book shows how high performing companies consciously turn a lot of the conventional management wisdom upside down. For instance:1. Contrary to what many people now think, recruiting, selecting and retaining unique talent is NOT the prime source of competitive advantage. Although these activities are important, the examples of these extraordinary companies show that it is much more important to build a culture and work system that enables all people to use their talents and develop their talents. A byproduct of this will be that your company will also be better at attracting and retaining people.2. Values first instead of strategies. The conventional view puts competitive strategy on top and derives from that what structure is needed, what competencies and behaviors are needed and so on. The companies described here work differently. Although they do have competitive strategies these are secondary to their set of guiding values and to the alignment of these values with their management practices. In other words: they have a values-based view of strategy.3. Respectful and trusting way of dealing with people. Many companies monitor, check and try to control employee behavior. The hidden value companies work differently. In the spirit of Douglas McGregor's book The Human Side of Enterprise, they seem to understand that if you begin by designing systems to protect against the small unmotivated minority, you end up alienating the motivated majority. So they put their people first by treating them respectfully, involving them and trusting them.Lessons like the ones presented in this book can be found in several other books by for instance Jeffrey Pfeffer himself, David Maister and Jim Collins. What makes this book different and interesting to me is the presentation in the form of detailed case descriptions.

I am really enjoying this book, and gaining great insight and ideas on what to implement within my own future business. It really does pay to provide creative incentives for employees, in my opinion. A recommended read for anyone starting their own business.

In Strategy Safari, Professor Mintzberg and his coauthors describe that most people approach strategy from one of 10 different perspectives, mostly ignoring the others. That book argues that we would be better served to integrate these 10 perspectives into a combined one. In Hidden Value, Professors OReilly and Pfeffer succeed in combining four of those perspectives in a valuable synthesis. The four that are combined here are values, which people to attract and retain, determining which core competencies to build, and the role of senior management in strategy development and implementation.At a time when there are many excellent books out on how to find and retain top talent, this book aims to do something different. "Hiring and retaining talent is great. Building a company that creates and uses talent is even better." So after you have read all about Topgrading and other useful methods, read this book next.The book is unusual (especially for one from Stanford professors published by Harvard Business School Press) in that it uses a structure designed to allow you to learn more than frequently occurs with straight exposition (thesis, followed by examples to support the thesis, and then a conclusion).To do this, the authors found 8 companies that exhibited people-centered values in different industries to succeed in different ways. You are invited to peruse detailed case histories to get a sense of how these companies work. Following the eight is an example of a company with many similar approaches that was not doing as well, Cypress Semiconductor. You are invited to think through what's different. Later on, you also do mini-studies of People Express and Levi Strauss to see where they vary from the model that you have developed from the cases.But if you do want to know what the authors think about the cases, their conclusions are summarized at the end of every chapter. Chapter 10 also looks at the overall model they discern.They see a process whereby each of the successes starts out with a focus on people that is primarily employee centered. This focus often comes from the founder or the current CEO. The company then looks for people who share that focus. At some point, common values begin to emerge among the leadership and the rest of the company. The company continues to focus on coalescing around those values by hiring people with those values, and teaching the values to new employees. Values are reinforced everyday through communications, information flows, training, and rewards and recognition. This creates an environment of mutual trust and respect. Then the company looks at the core competencies that make sense in light of the people, values, and market opportunities and develop those core competencies The company then looks for new strategies that build on the core competencies. Senior management follows at this point in leading from and to reinforce the values.The payoffs in the case histories relate to superior performance in key valued-added areas (which differ by case), reduced turnover of people which decreases cost of employment and improves performance further, trust and information flows that encourage useful experimentation, and consistency of focus which allows improvement to be greater and on-going.The point of the book is that the "what" to do is pretty simple, but few people have the commitment and patience to handle the "how" to do it.

Extraordinary content, for me was discovering why the company I work succed or not.I recomend it for every manager.

Charles O'Reilly puts out an interesting idea of how to get the most out of people with various management strategies. I worked in a human resources department for a little while and his ideas were among the more useful that I applied. The book is very well written and does a good job of holding your interest. Highly recommend.

Only on Chapter 5. Reading about the excellent practices of these companies makes me want to strive for the best for my employees, also!

I fully agree with the premise of the authors, namely that focusing on employee satisfaction is key to achieving business success. The problem is that you could easily bankrupt a business before it got started if you implemented all of the insanely expensive employee centered policies in this book. Knowing where to draw the line is crucial to survival.Like so many business books, "Hidden Value" is second hand wisdom, a description by (tenured) academics describing how entrepreneurs ran successful businesses. This is fine for academic pursuits. But if you are putting your life savings (and most likely a few other things you would rather not lose) at risk in a business, "Hidden Value" is far from the last word on the subject.