Chapter 5

Brian lay his head down on his desk and closed his eyes. 'I'll just rest here for a minute, ' he thought, 'and then I'll finish up and go home.'

Brian had been at work since 7:30 AM, and it was now almost midnight. For some incomprehensible reason, he had promised the reports on these last two companies by the next day, and now he felt obligated to deliver.

Brian was a stock analyst and researcher. It was his job to predict a company's future in terms of revenue growth, data which was then used by others to predict stock prices. Further, Brian specialized in longer-term predictions of over 5 years. It was something he was uncommonly good at it.

Once, as a finance intern in a large manufacturing firm with nothing better to do, Brian started drawing diagrams of his department, connected with arrows and lines to show how everyone worked together, who influenced who, and so on. Eventually he began to connect these diagrams to larger groups in the organization, such as Engineering, Sales, Administration, etc. and then also with outside influences, vendors, customers, and so on.

Soon the diagrams (which now covered the walls of an unused office) caught the interest of the CEO, who took one look and re-assigned Brian to his personal staff. During this time, Brian began to develop a theory on how good organizations operated, the "COI" theory.

"COI" stood for "Customers, Operations, and Innovation", and Brian found that the best organizations had three people who ran the place, each of which filled one of these three roles. In larger companies, these roles would typically be filled by the VP of Marketing, the CEO, and the VP of Engineering. But even in the best smaller companies, there always seemed to be one person who knew the customer the best, someone who focused on strictly operational issues (finance, processes, recruiting, etc), and someone who was constantly innovating on the product. The more clearly defined these roles were in the group and the closer these three people worked together, the better the group functioned and improved over time.

The CEO decided it was time to take action. Using the diagrams, he restructured the entire organization and executed a 15% workforce reduction. Brian was shocked that all his work, which he had done as a kind of "Business Sociologist" could be used for such a brutal end result, but he had to admit that the CEO knew what he was doing. Expenses were reduced, profits shot up, and new products (free of burdensome bureaucratic controls) burst forth. The stock tripled in two years.

Brian's work had been used to create over a billion dollars in market capitalization, and he was still only an intern.

After school, Brian took a job with his father's company, Spencer and Johnson, an old-time investment banking firm initially founded by his grandfather. He was assigned to the worst possible job: stock analyst, and was told to work his way up from the bottom.

Stock analysts are the bottom feeders of American capitalism. Basically their job is to badger company employees to reveal insider secrets and then use the information to write a report.

Now just 24, Brian applied his new diagramming techniques to the companies he was assigned to follow. The reports that followed were detailed, specific, and thoroughly researched with supporting materials. Brian had found his niche. Ten year later and his reputation has a genius within the firm and the industry was unassailable.