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Billion-Dollar Lessons: What You Can Learn from the Most Inexcusable Business Failures of the Last 25 Years | 
 enlarge | Authors: Paul B. Carroll, Chunka Mui
Publisher: Portfolio Hardcover
Category: Book
List Price: $25.95
Buy New: $12.06
You Save: $13.89 (54%)
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Rating:  22 reviews
Sales Rank: 18690
Media: Hardcover
Pages: 310
Number Of Items: 1
Shipping Weight (lbs): 0.9
Dimensions (in): 9.1 x 6.1 x 1.3
ISBN: 1591842190
Dewey Decimal Number: 658.4012
EAN: 9781591842194
ASIN: 1591842190
Publication Date: September 11, 2008
Availability: Usually ships in 1-2 business days
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Product Description
Welcome to Business Failure 101
In the 1960s, IBM CEO Tom Watson called an executive into his office after his venture lost $10 million. Watson asked the man if he knew why he d been called in. The man said he 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 again and again. 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
Between 1981 and 2006, 423 major publicly held U.S. companies with combined assets totaling $1.5 trillion filed for bankruptcy. Hundreds more took huge write-offs, discontinued major operations, or were acquired under duress. Again and again, companies follow the same wrong-headed strategies that brought down businesses in the past. The sub-prime mortgage crisis that cost companies tens of billions of dollars in 2007 and 2008 echoes the ill-conceived strategies that pushed Green Tree Financial and Conseco into bankruptcy years earlier. Tom Watson s executive s $10 million lesson seems cheap by comparison.
Lesson Two: Failure Patterns
Carroll and Mui found that the number one cause of failure was misguided strategy not sloppy execution, poor leadership, or bad luck. These strategic errors fall into seven categories, including:
* Pursuing nonexistent synergies: Quaker Oats purchase of Snapple was supposed to capitalize on distribution synergies but instead led to a $1.7 billion write-off.
* Moving into an adjacent market that isn t really adjacent: Avon decided its culture of caring qualified it to operate retirement homes. Subsequent write-offs totaled $545 million.
* Buying more problems than efficiencies through misguided consolidation: Despite pioneering the discount department store years before Sam Walton came along, Ames Department Stores flubbed consolidation efforts, landing in bankruptcy twice before eventually liquidating.
Lesson Three: Avoid Making the Same Mistakes
But there s light at the end of the tunnel: Billion-Dollar Lessons provides proven methods that managers, boards, and even investors can adopt to avoid making the same mistakes. While there s no way to guarantee success, this book draws on vivid, off-the-beaten-track examples to help you avoid failure by showing you how to thoroughly assess potentially disastrous strategies before they bring your company down.
Required Reading
Think of Billion-Dollar Lessons as the flip side of Good to Great, but just as eye- opening and essential as that business classic. There s enormous value in learning from companies that lost millions (if not billions) in pursuit of strategies that led to spectacular flameouts. Everyone makes mistakes, but why make the same mistakes over and over?
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| Customer Reviews: Read 17 more reviews...
 A Must Read November 17, 2008
KED
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.
 Clear, consise - excellent examples November 15, 2008
Stuart Diamond
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.
Look Into Others' Rear View Mirrors .... And Avoid Crashing November 11, 2008
Gautam Kumar
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.
Billion Dollar Lessons is worth your time October 29, 2008
Keri Pearlson (Austin, TX)
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.
Useful on the job within 20 minutes October 27, 2008
Matt Adlai-Gail (Princeton Jct., NJ)
Within 20 minutes of picking up Billion Dollar Lessons, I had gleaned insights to help me directly and immediately on the job. Specifically, earlier in the week I had been asked by a senior VP to draft a first-round business case for a potential acquisition. Reading one cautionary tale after another - around problems, big problems, companies have had not surfacing and considering all the potential risks of a strategic move - was sobering and enlightening at the same time. I saw things more clearly and the book enabled me to provide a better, more critical analysis of a post-acquisition scenarios. I was also able to call out the key risk factors for the team to work through - all early enough in the process - i.e., before it is too late. This business case I submitted was widely praised.
On this experience alone, I highly recommend Billion Dollar Lessons for anyone making or influencing strategic decisions in organizations anywhere. It's like having a seasoned board member in your back pocket, whispering impartial advice and warnings.
The clear prose, the entertaining and well-researched examples, and the sound, sober guidance make this book a pleasure to read. Comparing the cost of the book and the cost of flawed strategies, the decision to purchase this book is truly a no-brainer.
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