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Book Review

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Business Wisdom Gained From Major Business Stupidity

September 29th 2008

Book Covers - Billion Dollar Lessons

Billion-Dollar Lessons: What You Can Learn from the Most Inexcusable Business Failures of the Last Twenty-Five Years. Paul B. Carroll, Chunka Mui, Portfolio. 320 pages.

It always cracks me up when I'm reminded that hindsight is not only 20/20 but is often magnified as if viewed through the Hubble Telescope, especially true of tales found in business books. Whenever a spectacular yet disastrous deal is recounted, the warning signs are never subtle, always appearing in big, red, bold capital letters of flashing neon, and accompanied by ear-splitting sirens, wailing horns, and thundering timpani.

It's amazing! How did anyone make such stupid moves? That they were doomed to failure was just so obvious! There was no way they could possibly succeed. The executives who came up with the ideas, NS proposed, funded, supported, managed and perpetuated them were colossal dunderheads who should have known better. Big duh!

It's pretty much the same deal with Billion-Dollar Lessons, the new book by Carroll and Mui. The proprietary document fax service Zapmail by FedEx, Motorola's Iridium project, the funeral-home consolidation strategy of the Loewen Group, Ames Department Stores' acquisition of Zayre's, Kodak's stubborn refusal to get into digital photography, Sears' patchwork-quilt assemblage of disparate business—all of these ill-conceived and poorly executed ventures, and more, are recounted, deconstructed and criticized. And all seem doomed to failure, at least in retrospect.

To be fair, in some cases, business success is like comedy: timing is everything. It's also very similar to real estate: location, location, location. But monumental failures are often accompanied by an extra-large helping of hubris, regardless of these factors. And, these projects were almost always funded with OPM (churlishly pronounced ``opium''), which stands for Other People's Money, according to Carroll and Mui. So there's that, too.

The authors present their information well enough, though the text rambles a bit as they leap back and forth and back again from company to company and meltdown to disaster. Had they stuck with a single firm to illustrate one or two points, or organized their material a bit differently, it might have made a better experience or at least a more coherent and comprehensible one.

Fortunately, after the multiple horror stories, there is a meaty and multifaceted analysis of the decision-making process, which is well worth the price of admission.

Given the benefit of hindsight, the authors might want to take another shot at constructing this book. They might begin with a section, then break off into the study of preventive strategies relative to a single firm's drastic mistakes and how the company could have avoided, neutralized, or fixed each disaster.
It's a pity that the best part of the authors’ work is buried in the back, but maybe that judgment is just another benefit of hindsight. Regardless, Billion Dollar Lessons is a good collection of cautionary tales and a worthwhile repository of wisdom that might help companies avoid the fate of those chronicled within.

Of course, they'll need to read it before the fact!

Richard Pachter is a syndicated reviewer and can be found on at www.richardpachter.com This article is adapted from one originally published in the Miami Herald.

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