Billion Dollar Lessons

June 16, 2008
Carroll (Big Blues
) and Mui (Unleashing the Killer App
) collaborate to perform an autopsy on some of the most spectacular business failures and corporate disasters in recent times, hunting down the fatal strategies responsible. The authors examine more than 750 “inexcusable” corporate collapses, neatly cataloguing them into eight common “failure patterns”: doomed practices, including the “Illusion of Synergies,” as illustrated by the ruinous merger attempts by Sears and Dean Witter; “Faulty Financial Engineering,” as conducted by Tyco and Revco; “Staying the (Misguided) Course Too Long,” a sin committed by Kodak, which missed the boat on digital photography; and “Consolidation Blues,” as depicted by U.S. Airways, which crashed as a consequence of buying up too many companies too quickly. While there are assuredly lessons in defeat and the authors' detailed analysis and bracing honesty is welcome, readers hoping for a more encouraging or inspirational business book might find Carroll and Mui's avalanche of disastrous failures, avoidable bankruptcies and destruction of shareholder value a depressing—if highly instructive—read.

September 1, 2008
With lessons learned from extensive research into 750 major bankruptcies between 1981 and 2006, including Enron, Conseco, Texaco, Kmart, and Refco, authors Carroll and Mui set out to help corporate management avoid failure from bad strategies. Almost one-half of the failures could have been avoided if the companies had been aware of strategy pitfalls or had become cautious in the face of clear warning signs. The authors describe seven basic strategic failures, including estimating synergy from mergers, which proves to be exaggerated; aggressive use of accounting or financing mechanisms; staying the course in spite of a clear business threat; and riding the wrong technology, which fails. We also learn about the psychological implications of management banding together when something is wrong rather than individuals standing up for what is right and the important benefits of introducing a devils advocate into a strategys deliberative process. This well-researched book provides valuable insight for corporate executives and investors.(Reprinted with permission of Booklist, copyright 2008, American Library Association.)