Billion Dollar Lessons: What You Can Learn from the Most Inexcusable Business Failures of the...

Billion Dollar Lessons: What You Can Learn from the Most Inexcusable Business Failures of the Last ... | Paul B. Carroll, Chunka Mui | Clear, consise - excellent examples

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Billion Dollar Les...

	Billion Dollar Lessons: What You Can Learn from the Most Inexcusable Business Failures of the Last ... Paul B. Carroll, Chunka Mui Brilliance Audio on CD Unabridged, 2008 average customer review:based on 23 reviews view larger image
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highly recommended

In the 1960s, IBM CEO Tom Watson called an executive into his office after his venture lost $10 million. The man assumed he was being fired. Watson told him, ?Fired? Hell, I spent $10 million educating you. I just want to be sure you learned the right lessons.? In Billion Dollar Lessons, Paul Carroll and Chunka Mui draw on research into more than 750 business failures to reveal the misguided tactics that mire companies over and over. There are thousands of books about successful companies but virtually none about the lessons to be learned from those that crash and burn.

Lesson One: The cold hard facts are that between 1981 and 2006, 423 major companies with combined assets totaling $1.5 trillion filed for bankruptcy.

Lesson Two: The number one cause of failure was misguided strategy ? not sloppy execution, poor leadership, or bad luck. These strategic errors include pursuing nonexistent synergies; moving into an ?adjacent? market that isn?t really adjacent and
buying more problems than efficiencies through misguided consolidation.

Billion Dollar Lessons provides proven methods that managers, boards, and even investors can adopt to avoid making the same mistakes. It draws on vivid examples to help you thoroughly assess potentially disastrous strategies before they bring your company down. Think of Billion Dollar Lessons as the flip side of Good to Great, but just as eye opening and essential as that business classic. Billion Dollar Lessons will keep you from going from good to gone.

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Billion Dollar Lessons is worth your time

Nothing teaches us faster than that embarrassing moment. The feeling that we did something we shouldn't have congers up an emotional reaction we dread. Paul Carroll and Chunka Mui have written the next big business book you should read. Billion Dollar Lessons is their summary of dozens of big business failures and the lessons learned. In a very readable, conversational tone, the authors help us understand, and hopefully learn, some important history lessons. It's full of interesting stories and patterns the authors observed in reviewing so many cases. The hope comes in when we hope future leaders have learned these lessons too.

Carroll and Mui have drawn lessons from some of the largest, and dare I say, most embarrassing, business failures. That is one of the reasons this book is so worth reading. There are a number of books that highlight a success and try to explain, in hindsight, how brilliant the leaders were because they made decisions that resulted in the success. So often I'm left with the question of whether the leader was so smart, or just so lucky to be in that place at that time. The leaders in Billion Dollar Lessons were no less brilliant. They made decisions along the way that were logical and even rational given the situation they perceived. The flaw was that they didn't see the whole situation. More often than not, their downfall was caused because they used bad judgment. They didn't seek the bigger picture, nor did they learn from history, when those that came before them made similar mistakes.

The authors' lessons are insightful and useful. Each chapter covers a different lesson and is full of examples of failures. Often the stories are about companies in the same industry. Sometimes it's a leader who should have known better. The stories are interesting and very readable. The authors have provided just the right amount of context so that the reader understands why things developed as they did. The end of the chapter is where the real insight comes. That's where Carroll and Mui provide their recommendations based on the lesson.

I recommend this book to any manager who wants to learn from the past. Students of history will really enjoy the detailed description of many of these situations. Leaders of tomorrow will have the chance to learn from the past. If everyone read this book, maybe we could avoid repeating these mistakes. Then again, maybe we just have to make them ourselves. For some, that emotional jolt is the only way the lesson is learned.

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Clear, consise - excellent examples

This is how a business book should be written - well organized, stating the theory, providing relevant examples and a summary at the end of each chapter. I have begun distributing the book to my clients who are actively involved with or contemplating a merger - a must for anyone in that situation.

A Must Read

While reading through this book you find that you ask yourself "how is it possible that someone didn't stop or see these problems along the way?" Billion Dollar Lessons provides dozens of examples of strategies gone wrong and if you think that they would be deeply complex issues to cause such high dollar mistakes you are in for a shocker.

This book should be read by business students, entry level employees, experienced professionals, senior leaders and executives. It provides a clear examples of how easy it is to overlook problems as well as what can be done to prevent them in the future.

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Look Into Others' Rear View Mirrors .... And Avoid Crashing

First, the bottom line - I think this book is definitely worth it. Businesses and business literature don't analyze failures often enough, so it is a welcome shift in perspective. Coming out amid the ongoing financial crisis that has destroyed many firms and crippled the whole financial system, hopefully this book will start a shift in attitude in the business world so non-conforming discussions truly become acceptable.

For my detailed review, let me first describe the criteria that I apply to business books in order to separate the valuable ones from the many many "also rans". To be valuable over time - as opposed to seeming important or attractive at their launch, then fading away - a business book needs to do well against the following criteria (in my view):

1. Is it credible? (Does it have a solid foundation in data and research?)

2. Will it stand the test of time? (Will the conclusions remain valid beyond the current boom/bust cycle?)

3. Is it broadly applicable? (Is it relevant and valid across industries and geographies?)

4. Is it crisp? (Are the recommendations clear, concise and actionable?)

5. Is it memorable? (Will it be remembered and leveraged when readers are making their next big decision months or years after reading it?)

In terms of the first criterion, "Billion-Dollar Lessons" comes out shining. The authors and their research team have performed a structured and comprehensive analysis of numerous business failures over the last few decades. The data set seems to be large and representative and the analysis rigorous. The authors have also cited from numerous other books and articles - perhaps too numerous.

The soundness of the underlying research also helps the book in terms of the second and third criteria (test of time and broad applicability). The book is not about a specific industry or specific strategy or specific panacea for everything (e.g., the dot-com phenomenon), and hence should remain valid over time. Linking the failures to underlying human traits and social factors also shows that the conclusions are not applicable just to the company or industry being analyzed, but to human commercial enterprise in general, and therefore should again stand the test of time.

The fourth criteria - around the quality of recommendations - is a crucial one. To use an overused phrase, this is the "so what" of the book. I especially liked the "Tough Questions", and to some extent, the "Red Flags" embedded in each chapter. Chapters 8 and 9 (Why bad strategies happen to good people or good companies) are pretty interesting. That said, the lessons, the recommendations could have been crisper. The ideas are all there, but I guess a concise roadmap to bring it all together would be helpful.

The fifth criteria is akin to the "brand recall" metric. Will the ideas in this book or at least its central thrust remain with us after we put the book back on a shelf? I think it depends on two factors - (a) whether the book stirred the thought process of the reader while s/he was reading the book - thereby making a lasting impression on her/his mind, and (b) whether the reader is able to immediately apply some of the learnings in their business or life, even if it happens to be on a smaller scale. These two factors improve the degree of engagement between the reader and the book and hence ensure long-term probability of being recalled and being leveraged. For me personally, factor (a) was definitely there, but (b) could have been better. Again, a concise roadmap would have helped.

In summary, based on these criteria, I think the book is definitely valuable.

Before I close, let me list some other "nice to haves" that I'd have preferred to also see in the book (maybe in the next edition?):

1. Graphical representation of the entire sample universe, perhaps showing a scatter plot or a bubble chart of these failures, their sizes and their drivers/categories,

2. Some examples of success for each of the seven patterns and contrasted them with the failure examples to tease out even more what makes the difference between successes and failures,

3. More international/global examples would make a good addition, given that business today is truly global, as proven by the ongoing crisis, and

4. Finally, an assessment of Enron - perhaps the most dramatic corporate failure of recent times. While financial engineering caused the final blow to their existence, I suspect they were afflicted by a few more of the seven failure patterns the authors talk about.

Happy reading, everyone! It's not always possible to look in to other people's rear view mirrors, so do use this opportunity.

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Thought provoking analysis of failures (with benefit of hindsight)

This is a remarkably informative and entertaining analysis of some famous (and some not so familiar) failures. The authors' vast research has been abstracted into seven fairly distinct themes which are then illustrated with detailed examples. Of course, it is benefiting tremendously from hindsight and perhaps there is an element of confirmatory or availability biases (the authors themselves warn of this danger in a different context in Part 2 of the book). Nevertheless, the compendium of examples and some succinct observations are well-worth the time (and money) for the book. The Part 1 of the book dealing with the seven themes of failures is far more informative than the second part. The second part attempts to provide ideas on how not to repeat these failures. I found this part to be very "consultant speak" - not a negative in itself; but there was an opportunity missed for using 'positive examples' that would have reinforced their statements. The book then delves into some behavioral biases (a topic very well covered in behavioral finance, for example, but never really highlighted in the book ) to provide some insight on biases that can hinder decision making. For a book that essentially draws from failures, it is surprising that there weren't many (if at all, any) examples that could have been used to expound on their statements/strategies for avoiding the mistakes they so carefully abstracted. Overall, an excellent and informative read.

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reviews: page 1, 2, 3, 4, 5

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