Billion Dollar Lessons: What You Can Learn from the Most Inexcusable Business Failures of the Last 25 Ye Ars

by Paul B. Carroll and Chunka Mui

Book Overview

"This book is your chance to learn from others' mistakes."-- Entrepreneur 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." There are thousands of books about successful companies but virtually none about the lessons to be learned from those...

• Format: Paperback
• Language: English
• ISBN: 1591842891
• ISBN13: 9781591842897
• Release Date: August 2009
• Publisher: Portfolio
• Length: 336 Pages
• Weight: 0.65 lbs.
• Dimensions: 0.9" x 5.4" x 8.3"
• Age Range: 18 years and up
• Grade Range: Postsecondary and higher

Customer Reviews

Good to Grate: How good companies let their businesses fall into the sewer.

In Billion Dollar Lessons Chunka Mui and Paul Carroll look at the flip side of Jim Collin's study of successful companies (Good to Great) and how they got there. In this book, Mui and Carroll take a pointed look at corporate failure. They review case studies showing how companies, who were sailing along nicely, blew it by miscalculating a synergy, rollup, adjacency or consolidation move, were foolish or greedy with finances, stayed a misguided course or fumbled with technology The book is replete with excellent well known and lesser-known studies lucidly illustrated and explained by the authors. If you are a fan of business case studies then you will love the first 190 pages of this book. These cases will surprise, and probably terrify, you as they show how so many smart business folks have made so many bad decisions. As the authors point out, these companies and their CEOs were not stupid. Yet, a typical MBA student wouldn't have made many of their mistakes. But complacency, unsound hope and hubris often clouded the judgment of these failed companies and their leaders. Of course, in the light of the recent worldwide financial meltdown and the credit crisis, some of these cases might appear a bit mundane. In that respect, Mui and Carroll have to be kicking themselves that they were so efficient getting this manuscript to their publisher. A couple extra months of research (or procrastination) and they could have included Lehman, WaMu, Fannie, Freddie and others in the book. Nevertheless, the mistakes illustrated are still pretty bad and well worth learning. If you are not a big fan of case studies, then the first 190 pages of this book might be a bit tough to get through. However, the opening sections of each of the first seven chapters posit the lesson very well without the case study. This will allow you to move forward through the lessons at a clip (although you will be losing quite a bit of detail without the studies.) After finishing the first part of the book, you might find yourself thinking that it's easy to criticize or that hindsight is 20/20. So the authors found a bunch of flops and brought them to light, what's the big deal? But this is where the real benefit of their research comes through. In Part 2 the authors elucidate several easy-to-grasp and actionable strategies for becoming aware of and preventing the pitfalls mentioned in the first half of the book. The most important of which is certainly the Devil's Advocate. Though nothing new, the idea of employing a Devil's Advocate in business is uniquely spelled out by Mui and Carroll. They give companies several clear-cut ways to review decisions using the Devil's Advocate and eventually wrap the book with a short "course" on how companies can establish an independent Devil's Advocate review. All in all, the case studies and the author's suggestions in Billion Dollar Lessons are very illuminating. You can't help but read this book and be instilled with a greater sense of caution

Billion Dollar Lessons - one of the most important books ever written on business strategy

This extremely well researched book is a very important addition to the available literate on the subject of business strategy and it is very unlike any other book on the subject. Most books on strategy spend a good deal of time presenting methodologies for strategy development. Carroll and Mui take a very different approach; the book contains no methodology for strategy development, they have left that to others. Carroll and Mui seek to help individuals, groups, and corporations improve their strategies and decisions by learning from the mistakes of others. This book is a must read for practitioners in M & A, investment banking, equity analysis, and corporate leadership. This book will give you a healthy dose of skepticism and questioning, especially when you encounter a business case based upon hard to quantify benefits such as `synergy' and `scale'. It is very apparent that the book was written by management consultants, not academicians. The authors provide great insights with case examples, not theory. Examples discussed in the book cover a host of household names including American Standard, Avon, Chrysler, Fed Ex, Ford, Kodak, Merck, Motorola, Tyco, USAir, Xerox, and many many more. They present the example and tell the reader not only what went wrong by also why it went wrong. The authors examine a litany of business sins such as overpaying for acquisitions, underestimating change management, failing to perform adequate due diligence, lack of contingency planning, creative accounting, and excessive use of debt. The book is even somewhat prescient regarding the current financial system meltdown with warnings on the danger of IBG YBG deal making in the financial services industry (IBG YBG = I'll be gone, you'll be gone). Billion-Dollar Lessons: What You Can Learn from the Most Inexcusable Business Failures of the Last 25 Years

Other people's lessons, as important as other people's money

I enjoyed reading Billion Dollar Lessons. Many business books read like school texts, but these authors connect with each example and the story to easily teach each lesson. Also, while so many business and leadership books on the market focus on what worked well, these authors bring attention to how those same strategies can backfire. Each of these strategies can play a role in a successful enterprise, but Mr. Carrol and Mr. Mui elucidate nicely how managment can fool itself into believing that any one strategy can serve as the panacea to create business success. I recommend this book.

Billion Dollar Lessons

This is one of the best business books that I have ever read. While I knew parts of many stories in the book, I never realized WHY certain events happened. When I have read about big corporate blunders in the past I always asked "Why did this happen?" The authors answer that question and put the huge blunders into several categories that are easy to understand and relate to. I liked the "Tough Questions" found at the end of each chapter. If business executives pay attention to just those questions, then they won't be involved in one of these huge mistakes. I also want to say that when I sat down to read it, I expected to read for 30 minutes and put it down. This was a page turner and I didn't stop reading until I finished. Great book! Well written! Needed by the Business Community!

Does your company need "failure insurance"?

Two of the business thinkers I admire most are Jim Collins and Jason Jennings. Collins has written two books in which he explains how certain companies are built to last and how other companies have been able to make a "leap" from good to great. Jennings has written several books in which he explains what all high-performance companies share in common, with two of their attributes being that (a) they have a bold, compelling vision but also "nail the fundamentals, and (b) produce more and better with fewer resources and do it faster. There are important lessons to be learned from business success but, as Paul Carroll and Chunka Mui explain in their book, there are valuable lessons to be learned from business failures. For example, rather than because of lack of execution, poor timing, or bad luck, "many of the of the really big failures stemmed from bad strategies. Once launched, the strategies were doomed to fail, and these failures probably could not have been prevented by even spotless execution - unless the implementers were licensed to kill the strategy itself." That said, are doomed strategies avoidable or are fatal flaws only recognizable in hindsight? To answer this question, Carroll and Mui embarked on rigorous research the "billion-dollar lessons" they learned are provided in this volume. Among their most interesting revelations is that failures tended to be associated with one of seven types of strategy. "Failures could certainly happen for other reasons, but if a company followed one of these strategies it is far more likely to fail." Here's where it gets really interesting. For as long as I can remember, all of these strategies have been included among those that organizations are most likely to select: synergy, financial planning, rollups, "staying the course," adjacencies, "riding" technology, and consolidation. Carroll and Mui duly acknowledge the merits of each and the fact that they have served many organizations well. So what's the problem? In many instances, excess is the root cause. For example, overestimating the potential benefits of mergers (e.g. AOL Sears, Time Warner, UnumProvident,), aggressive accounting that crosses the line into illegality (e.g. Conseco, Green Tree Financial, and Spiegel), buying dozens, hundreds, and even thousands of local businesses and combining them in a regional or national "behemoth" (e.g. AutoNation, Tyco, and Waste Management), and ignoring or underestimating a serious threat to "business as usual" and then making insufficient adjustments (e.g. Kodak, Mobile Media Communications, and Pillowtex). Carroll and Mui devote a separate chapter to each of the seven categories of corporate strategy involved in what they assert are avoidable failures. "We aren't saying that these seven strategies are doomed to failure. Far from it. In the right circumstances, all of these strategies can succeed splendidly. All we're saying is that these strategies are danger zones. If you are pursuing one of these