All types of organizations, for profit, not-for-profit, lawful, and unlawful, must be relentless in highly competitive, and constantly evolving environments. Every day iconic brands like Sears, Kodak, and Blockbuster vanish. Managers in lawful companies face disruptive technologies, groundbreaking new products, and competition from new entrants. Every organization must manage its way through a rapidly shifting world, or else fail. Yet some organized crime syndicates last decades despite massive law enforcement efforts and rival gangs directed at their daily demise.
The American Mafia, which burgeoned during Prohibition in the 1920s, still operates in the twenty-first century. The Sinaloa Cartel remains the largest smuggler of drugs into the US, despite jailing its leader, El Chapo Guzmán, in a US supermax prison. How do these criminal syndicates survive, and even thrive? They apply fundamental economic principles to devise management practices that channel their heinous members’ self-interest to achieve the syndicates’ objectives.
Relentless uses the most unexpected organizations, crime syndicates, to elucidate essential economic concepts that allow all leaders to build stronger, more robust companies. These concepts align the organization’s business strategy and employee empowerment, incentives, and corporate culture. These principles attract the right people to create resourceful, market-obsessed, and relentless high-performance teams. Understanding the management practices devised by mobsters illustrates the economic concepts that lawful managers also must heed. While lawful managers cannot simply follow the business practices of mobsters, they must apply the same fundamental principles described in Relentless.
Congrats on your new book can you Tell me a little about your book Relentless: The Forensics of Mobsters’ Business Practices.
Jerold and Daniel: Thank you for providing us this opportunity to connect with your extensive network and a community of leaders we deeply admire. Relentless applies the underlying economic principles of corporate governance to mobsters. Corporate governance addresses the conundrum of how to attract, retain, and motivate a workforce comprised of self-interested people to work to achieve the organization’s objectives. Both lawful and unlawful firms face the same corporate governance challenges of motivating self-interested individuals to work to achieve the firm’s objectives. Our book, Relentless, illuminates that mobsters apply the same economic principles as lawful leaders in solving their corporate governance problems. We also teach within the book that management attention given to creating a constructive and healthy culture is an essential ingredient for all leadership teams to get right. Mobsters have a lot to teach lawful leaders as readers will discover.
What is the backstory behind “ Relentless”?
Jerold and Daniel: We grew up riveted by popular crime shows including The Untouchables, The Godfather, Goodfellas, The Wire, and The Sopranos. We were intrigued by the ability of some organized crime syndicates, like the American Mafia, to survive many decades despite enormous law enforcement efforts directed at their eradication. Twenty years after we first met at the University of Rochester’s Simon School of Business, Jerold Zimmerman (teacher) and Daniel Forrester (student) reconnected to address the challenge of how organized crime continues to thrive despite enormous law enforcement resources devoted to their demise. Our professional careers sought to help lawful leaders improve their firms’ corporate governance by better understanding why some legitimate organizations succeed while others fail. What corporate governance practices benefit certain firms or hamper others’ fate? Our collaboration merged our professional interests of corporate governance and our fascination with organized crime.
What experience caused you to see a need for your book?
Jerold and Daniel: During our respective careers, we have seen countless leaders trying to pivot to a new reality when their world suddenly changes. Take Kodak trying to adapt to digital imaging, or JC Penny’s trying to compete in a new retail space, or everyone today trying to adapt and survive in a COVID pandemic. Leaders’ ecosystems evolve, and so too must their strategies. But new and bold strategies often require revised corporate governance to attract, retain, and motivate the workforce to implement the often controversial new strategies. It turns out that organized crime syndicates relentlessly search out and implement new rackets as opportunities present themselves. National Prohibition in the 1920s provided local Mafias the opportunity to ramp up their bootlegging to provide the now banned alcohol, thereby generating enormous cash profits. During World War II basic staples like sugar, meat, and even tires were rationed via rationing coupons. Relentless and resourceful gangsters quickly filled the void with stolen or counterfeit rationing coupons. Their corporate governance systems created high-performance teams of entrepreneurial mobsters who quickly invented new rackets. While lawful leaders cannot simply mimic gangsters’ governance schemes, they can learn the same economic principles mobsters followed that channel employees’ self-interest to pursue new strategies.
Is there one short story from your book you would like to share?
Jerold and Daniel: National Prohibition created a frenzy among the existing five New York City Mafia families to supply booze to speakeasies. Naturally, turf wars broke out among the families comprised of self-interested mobsters trying to seize market share from other families. Families fought bloody wars to become “the boss of all the bosses.” After winning a bloody battle and killing the rival boss of all bosses in 1931, Lucky Luciano, head of the Genovese crime family convinced the other four families to form “The Commission,” a tribunal of all the five bosses. The Commission acted like a supreme court where disputes among families were settled peacefully. The 34 year-old Luciano recognized that internecine wars among families was bad for business and attracted law enforcement. The Commission set rules as to how big each family could be, so as to prevent one family from becoming too powerful. Also, members of one family could not hurt members in other families without the consent of the Commission, and only after all arbitrations had been exhausted. Forming the Commission and empowering it to resolve disputes peacefully is an example of a corporate governance mechanism designed to reign in self interest and channel it to achieve the objectives of the five families – survival and profits. It worked. There have been no cross-family wars among the five families in 90 years. This one short story vividly illustrates how corporate governance can mean the difference, literally, between life and death!
What is the biggest takeaway that you hope a reader will learn from “Relentless”?
Jerold and Daniel: All leaders must attract, retain, and motivate its workforce to achieve its mission. Each organization has its own mission and so it must design unique management techniques tailored to its distinctive strategy. These corporate governance practices include employee empowerment, incentives, and seeking to foster a constructive corporate culture. Relentless first expounds the core general economic principles and then uses the least likely leaders, successful mobsters, to illustrate how they applied these economic principles to implement management practices that created enduring crime syndicates. Although criminals and lawful managers deploy very different corporate governance practices, both must follow the same economic principles in designing them. Readers of Relentless will learn these essential economic principles and how to apply them in their idiosyncratic circumstances. Readers will also realize that Mobsters give sustained management attention to shaping and preserving their unique corporate cultures to ensure their resiliency.
What books had the most impact on you and your development?
Jerold: Milton Friedman Free to Choose, Why Government is the Problem, and Capitalism and Freedom
Daniel: The Complete Works of William Shakespeare, the Bible, Between Two Ages (by Van Wishard), Uncommon Friends (Newton), and Managerial Economics & Organizational Architecture (Smith, Brinkley and Zimmerman).
What are you reading right now? Are there any authors (living or dead) that you would name as influences?
Jerold: Kissinger by Isaacson, Guns, Germs, and Steel by Diamond, The Last Kings of Shanghai by Kaufman, and Thinking Fast and Slow by Kahneman.
Daniel: Failure is not an option by Gene Kranz, The Prime Ministers (edited by Iain Dale) a Man on the Moon by Andrew Chaikin.
Give us three “Good to Know” facts about you.
Jerold: In the last 12 months I played 204 rounds of golf (thank you COVID-19 pandemic), I have visited all 7 continents (including Antarctica), and a colleague and I started a new academic field of inquiry, “Positive Accounting Theory” and The Journal of Accounting and Economics
Daniel: I came really close to landing a spot in a Broadway play when I was 11 that would have changed my life. I am working on a new way to teach leaders how to tap into and chart a bold vision for their organizations (stay tuned for that). I also have a knack for meeting and having conversations with rather famous people on the Acela train between New Jersey and Washington D.C. For example, Sarah Jessica Parker likes to talk about NY versus NJ pizza and Henry Kissenger likes to drink chocolate milk when speaking about Richard Nixon’s legacy.
How did your leadership and ethical philosophy develop?
Jerold: My leadership and ethical philosophydeveloped from my exposure to Dean William Meckling and Professor Michael Jensen at the University of Rochester business school in 1974 where he began my academic career. Their curiosity about how to motivate and control self-interested employees to work for the organization’s objectives was infectious. The academic rigor of their own work became the gold standard all the faculty sought to emulate. Meckling’s and Jensen’s impact on my career is incalculable and eventually led to Relentless.
Daniel: My leadership and ethical philosophy developed based on years of Catholic schooling and education. The Ten Commandments and Christ’s teachings have served me well when in doubt about the right pathway to take. I have seen and studied leaders who failed to lead with integrity and others who ooze empathy, integrity and vision. I was lucky to get an upfront experience in the strategic thinking of both General Mattis and General Petraeus when writing my first book, Consider: Harnessing the Power of Reflective Thinking in Your Organization. They taught me what it took rethink war in the middle of war as they rewrote the counter-insurgency guidance. They and leaders like Colonel David Sutherland (US Army retired) have been a source of inspiration and examples of ethical leadership– under the most difficult conditions.
What is next for you?
Jerold: I really do not know until the pandemic ends and I can restart my travels and reassess my priorities.
Daniel: Working on a new business venture that I will begin in 2021 and also working on my first screen play based on extraordinary people who shaped my childhood and world view.
Any additional words?
Jerold and Daniel: Please read Relentless and let us know what you take away and apply to your lawful organization. We wrote it for the “Good Guys.”
Daniel P. Forrester is the author of Relentless: The Forensics of Mobsters’ Business Practices. He is the founder of THRUUE, Inc an expert consultancy that assists leaders in bridging the gap between corporate culture and corporate strategy. He works with CEOs, boards of directors, and C-suite leaders, helping them align around a clear strategy while understanding reputational and cultural risk. Daniel has spent the past twenty-five years successfully building consulting practices in the financial services, telecommunications, and public services sectors, utilizing his entrepreneurial approach to strategy. His previous book, Consider: Harnessing the Power of Reflective Thinking in Your Organization, examines how leaders responded to the explosion of data and hyper-connectivity impacting organizations and the role reflection can play in dramatically changing corporate outcomes. For more information, please visit https://www.danielforrester.com and follow Daniel on Twitter.
Jerold L. Zimmerman, Ph.D., is the author of Relentless: The Forensics of Mobsters’ Business Practices. He is a globally recognized microeconomist and author of seven books and has taught organizational economics, accounting, and finance at the University of Rochester’s Simon Business School for more than forty years. He has consulted with numerous clients, including Fortune 500 companies and management advisory firms, to demonstrate how organizational economics principles can improve a firm’s culture and, eventually, its performance. Zimmerman is also a founding editor of the Journal of Accounting and Economics, one of the most highly referenced peer-reviewed journals in economics, and has served on several public company boards of directors. His fifty published studies and books include textbooks on economics and accounting and a trade book about designing organizations that create value. For more information, please visit https://jeroldzimmerman.com