The Management Gospel According To The Godfather

Everything I know about management I learned from The Godfather.

At its core, business is quite simple. The goal of any organization is to upset the status quo and then re-establish it on a more favorable basis. Of course, all your competitors are trying to do the same thing.

The world of business is inhabited by just two tribes – Attackers and Defenders. The Defenders own the mountain. They have customers, a product that is valued, financial strength and organizational prowess. They are able to withstand certain amounts of adversity and protect their franchise.

Attackers are young upstarts without any of those strengths, but often with a new method, a new technology, or a new view of the world. Defenders? Think IBM, AT&T, Disney, Goldman Sachs. Think The Corleone Family. Attackers are the new kids on the block. Cisco, Google, E-Trade, Pixar. Think Sollozzo, the drug lord.

The Godfather is a management book. It puts Peter Drucker to shame; it makes Good to Great about as relevant as Mr. Rogers.

The Godfather is not about The Mafia, it’s not about Families; it is not about tradition. It is about how you take a small commodity company, Carlene Olive Oil, and change its business model, change its constituency and make it into a worldwide dominating enterprise. It is about handling Adversity; it is about turning a sleepy little family business into Power. It is about taking tactics and turning them into strategy. Its lessons are for Rupert Murdoch and his quasi-dysfunctional family, or Bernie Madoff or Steve Jobs.

It is about a founder, Vito Corleone, who takes an organization about as far as it can go… to Michael Corleone, who is the first of the next generation – who proves himself at another organization (the Marine Corps) and comes back to reorganize and globalize a family company. But The Godfather is also about hubris, bad management, dysfunctional organizations and failures to read the tea leaves. It is the mother of all case studies. Just as The Corleone family was left vulnerable to the ambushed Don, Apple is vulnerable when Steve Jobs is disabled with illness and the Children’s Crusade management team tries to cope.

It is about a meritocracy – where the best move up, where primogenerity gives way to competence. It is about branding, where enemies are intimated, friends are rewarded and survival is Job One.

It is about talent. How to recognize it. Reward it. Encourage it. It is about recruiting. It is about weeding out talent also. Jack Welch may talk about firing the bottom 10%. The Godfather shows how really to weed out those who aren’t with the program.

The Godfather is about dedication; the placing of the job above all else. It is about Business/Government relations. It is about picking partners, and recognizing when partners do not have the same agenda. It is about negotiation. It is about recognizing both opportunity and risk.

So maybe the Harvard Business School should save their students about $150,000 and two years of their lives. Just give them the book or the movies and go from there.

Howard Anderson is the founder and former president of high-tech market research firm The Yankee Group. He is also a co-founder of Battery Ventures, a venture capital firm in the Boston area, and, most recently, YankeeTek Ventures, a high technology venture capital firm in Cambridge. He currently serves as The William Porter Distinguished Lecturer of Behavioral Policy Science at MIT Sloan.

The above post is a truncated version of a longer presentation Howard is preparing, which will be given on May 21. Get more info here.