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Billion-Dollar Lessons: What You Can Learn from the Most Inexcusable Business Failures of the Last Twenty-five Years [NOOK Book]


”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.”

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Billion-Dollar Lessons: What You Can Learn from the Most Inexcusable Business Failures of the Last Twenty-five Years

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”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 that crash and burn. Now Paul Carroll and Chunka Mui draw on research into more than 750 flameouts to reveal the seven biggest reasons for business failure.
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Editorial Reviews

Publishers Weekly

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. (Sept.)

Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.
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Product Details

  • ISBN-13: 9781440630101
  • Publisher: Penguin Group (USA)
  • Publication date: 9/11/2008
  • Sold by: Penguin Group
  • Format: eBook
  • Pages: 336
  • Sales rank: 729,194
  • File size: 2 MB

Meet the Author

Paul B. Carroll wrote for The Wall Street Journal for seventeen years. The author of Big Blues, he founded Context, the first "new economy" magazine, in 1997. Now a freelance writer, he lives outside Sacramento, California.

Chunka Mui is the coauthor of the major business bestseller Unleashing the Killer App and a fellow at Diamond Management and Technology Consultants. He lectures and consults widely on strategy and innovation, and lives in Chicago, Illinois.
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Table of Contents

Introduction Can Fatal Strategic Flaws Only Be Recognized in Hindsight? 1

Pt. 1 Failure Patterns

1 Illusions of Synergy: Succumbing to the Eighth Deadly Syn(ergy) 15

2 Faulty Financial Engineering: Taking a Shortcut Through the Numbers 37

3 Deflated Rollups: Buying a String of Rock Bands to Form an Orchestra 60

4 Staying the (Misguided) Course: Threat? What Threat? 86

5 Misjudged Adjacencies: The Grass Isn't Always Greener 116

6 Fumbling Technology: Riding the Wrong Technology 141

7 Consolidation Blues: Doubling Down on a Bad Hand 169

Coda 190

Pt. 2 Avoiding the Same Mistakes

8 Why Bad Strategies Happen to Good People: Awareness Is Not Enough 197

9 Why Bad Strategies Happen to Good Companies: Awareness Is Still Not Enough 216

10 The Devil's Advocate: Unleashing the Power of Conflict and Deliberation 231

11 The Safety Net: An Independent Devil's Advocate Review 258

Epilogue: Two Revolutions 273

Acknowledgments 275

Research Notes 277

Notes 292

Recommended Reading 299

Index 303

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Customer Reviews

Average Rating 4
( 6 )
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Sort by: Showing 1 – 9 of 6 Customer Reviews
  • Anonymous

    Posted December 4, 2013


    I rp Flutterspy there

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  • Anonymous

    Posted December 5, 2013


    Wow so you know that im over there

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  • Posted March 30, 2009

    more from this reviewer

    I Also Recommend:

    Highly Informative and Relevant. Two Thumbs-up to Billion Dollar Lessons

    'Billion Dollar Lessons' is a worthwhile read. It's a rare strategy book that illustrates the astounding failures of American corporations, unlike several of its predecessors . By painstakingly drawing upon their consultancy background, both Paul B. Carroll and Chunka Mui have put together, perhaps, one of the best strategy books ever written. Much to my amusement, in spite of being a book on strategy, 'Billion Dollar Lessons' has no high-falutin', incomprehensible timbre of typical strategy mumbo-jumbo. Instead it's an intelligible portrayal of seven sure-as-hell bad strategies that have in the past put the companies on road to perdition.

    Paul Carroll and Chunka Mui outline the following seven strategies in the book which have often put companies in harm's way -

    a) Illusions of Synergy: Paul Carroll and Chunka Mui assert that 'synergy' as a concept appears logical, however, it's the underlying factors that make it a sketchy proposition. Two companies joining forces could face issues that may jeopardise the primary purpose of their marriage.

    b) Faulty Financial Engineering: This one is a usual suspect. Aggressive and creative financial reporting, tendency to incur towering leverage, using acquisitios to fiddle with numbers, chain reactions emanating from positive feedback loops, etc. are some of the major aspects of faulty accounting practices described in the book.

    c) Deflated Rollups: Rollups are consolidated entities that come into picture in extremely fragmented industries. Authors claim that contrary to the objective behind merging, many rollups turn out to mere highwire financial acts and some even end up frauds.

    d) Staying the misguided course: A detailed case-study of Kodak and its failure to meet the rising digital threat form the crux of this Billion Dollar chapter.Lesson is clear - being emotionally attached to a business can blindfold a CEO against unbiased perspectives.

    e) Misadjudged Adjacencies:Paul Carroll and Chunka Mui challenge the notion of adjacencies. They proclaim that success by adjacencies is aberrational and thus, can't be branded as a template for success.

    f) Fumbling Technology: Authors warn that when it comes to pursuing strategy with technology as the centerpiece, business leaders should ensure they are chasing technology to where it is going not where it is. They corroborate the theory with the case-study of Motorola's billion dollar blooper called Iridium.

    g) Consolidation Blues: Authors explain that in its move to consolidate, a company may end up acquiring 'diseconomies of scale' than the intended 'economies of scale'. Problem is that while making acquisitions, companies take a snapshot of a business and assume that the business will perform roughly at the same level for years. However, contrary to this, systems that worked for a company of certain size may break down when scale is increased.

    Part Two of this book provides business leaders with enough concrete to bulwark themselves against bankruptcies, write-offs and derelictions. Authors go a step ahead and advocate the appointment of a dissentor whose only role should be to challenge the notions of management. I am not sure whether appointing a devil's advocate could forewarn the management against the potential pitfalls, nevertheless, it's a sound, practical advice.

    Billion Dollar Lessons, in my view, is one of the best strategy books ever written. Personally, I would rate this book 4 on a scale of 5. Requi

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  • Anonymous

    Posted October 1, 2008

    Good stories and lessons about bad business

    Let's face it - there are business failures, and then there are BUSINESS FAILURES. Paul Carroll and Chunka Mui have written a well-researched and, dare I say it for a business book, entertaining account of some of the biggest business failures in business history. 'Billion Dollar Lessons' provides chilling lessons for those of us looking for how NOT to grow our businesses. Carroll, a former writer for the Wall Street Journal, and Mui, a fellow at Diamond Management and Technology Consultants, dive deep into some of the biggest business failures of the last 50 years. This is no small feat, because there are a number of failures from which to choose. According to the book's research, 250 companies have taken asset write-offs of over $350 billion 'yes, billion is with a 'b'' over the last 25 years. 'Billion Dollar Lessons' demonstrates several themes that drive many of the largest business failures documented in the book, including the following. * Poor understanding of adjacent markets - Avon believed that since it had a 'culture of caring', it could expand from its traditional market of cosmetics into operating nursing homes. * Failure to adequately plan for major changes to the business model - Kodak was fully aware of digital imaging's threat to its business in 1981, yet it could not change its mindset away from reliance on traditional film processing. * Not forecasting the problems that can come from consolidation efforts - Carroll and Mui show how many businesses justify rollup strategies with grand forecasts of synergies from cross-selling or back-office integration. However, these businesses do not plan for the problems that arise with integrating different businesses. My favorite parts of the book are when Carroll and Mui provide personal stories related to these lessons. For example, one Federal Express employee expressed discomfort with FedEx's Zapmail business, which was a precursor to the ever-present public fax machine system. The employee voiced his disapproval, only to learn that he disagreed with two vice-presidents who vowed to 'squash' him. The employee soon left FedEx. There are other stories like this that will make you wonder how some of these decisions ever saw the light of day. Carroll and Mui spend the final third of the book discussing how businesses can avoid these types of major mistakes. The ideas, such as an internal devil's advocate, work very well with larger companies where group think and bureaucracy can run rampant. Individual entrepreneurs and very small businesses may need external resources such as an advisory board or a trusted friend to offer challenges and disagreements to consider, but the general concepts of the book can be applied for all small businesses or entrepreneurs. I enjoyed this book. Yes, there were times where it had a 'train wreck' quality to it, because I could not turn away from how awful some of these decisions were. I did enjoy the suggestions Carroll and Mui offer to reduce the odds of making poor decisions. My one area of potential improvement would have been to offer even more suggestions for small businesses on how to implement some of the lessons. However, the overall stories and concepts are very good and should give any business owner cause to reflect on how they can reduce the probability of making very poor business decisions. Dallon Christensen President/Founder Beacon Business Consulting

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