Editor’s note: This article was first published in March 2014. Kahneman is described in the present tense as one of the world’s most influential thinkers; he died in 2024.
Although the title says that “every business owner and every leader” should read the 3 books we are about to recommend, the truth is that the first one should be read by everyone.
1. Thinking, Fast and Slow, by Daniel Kahneman
Written by one of the world’s most influential thinkers and a Nobel laureate in economics, this book is about how apparently rational people make decisions, decisions that in reality are anything but rational, because we decide with biases while taking hundreds of fallacies for granted. The book explains how we actually think, and by reading it you’ll discover that “you’re dumber than you think” (no offence intended).
Kahneman explains how our brain works through 2 systems of thinking: System 1, which is fast, intuitive and emotional, and System 2, which is slower, apparently more deliberative and supposedly more logical. He shows how your brain makes seemingly reasoned decisions when in fact our thinking is biased, which leads us to make the wrong choices. When should you trust your intuition and when shouldn’t you? When are you thinking things through and when aren’t you? Once you learn about so-called “cognitive biases”, you’ll realise that you probably haven’t been in charge of your decisions in the way you think.
Why should every business owner, leader or investor read it?
Business owners and investors make decisions all the time. Some are based on overconfidence and others on fear. Knowing yourself and knowing what leads you to make those decisions will give you an extra degree of intelligence. And it is certainly required reading for anyone who manages people. Articles where we have discussed some of the book’s lessons:
2. The Art and Science of Negotiation, by Howard Raiffa
As the book’s title suggests, selling is an art that not everyone masters. In the same way, persuading the other person in a negotiation is also a science. Shrewdness, persuasiveness and skill at finding common ground at the negotiating table are abilities we can develop, and this book offers very useful guidelines for reaching agreements in which both the other party and we come out ahead.
Why should every business owner and leader read it?
Every company is in the business of selling, without exception. We are all salespeople, without exception, and of course everyone should know about sales whatever their profession, because selling isn’t just convincing a customer to buy something. Selling is negotiating, and we all negotiate in life, whether we’re buying a car or signing a mortgage.
3. The Art of War, by Sun Tzu
The Art of War is probably the best book on strategy ever written, because military strategy on the battlefield is no different from business strategy. It’s all about conquering markets, taking ground from your opponent and scoring more victories than your rival.
Perhaps one of the best lessons I learned when I read this book is to avoid your opponents’ strengths and focus on their weaknesses. Conversely, when it comes to improving ourselves, the secret is to focus on our strengths, because if we concentrate on trying to fix our weaknesses, we are likely to end up frustrated.
Given who Sun Tzu was, his teachings and lessons are without a doubt invaluable. And this book should certainly be read by every business owner and by anyone who manages people in a company.
As you can see, these are 3 completely different books, but they all share the same goal: achieving personal, professional and business success.
Further reading
- The best books on financial education
- The 2 best books for getting rich are more than 70 years old
- 5 books for learning technical analysis as a beginner
Featured image: vlasta2, bluefootedbooby on flickr.com, CC BY 2.0, via Wikimedia Commons.
