Business Books
By Andrea Sachs
Billion Dollar Lessons: What You Can Learn from The Most Inexcusable Business Failures of the Last 25 Years By Paul B. Carroll and Chunka Mui Portfolio; 310 pages
Nice timing. With Wall Street in tatters, this lesson in Business Failures 101 should have a built-in readership. The authors don't overintellectualize failure; they are strictly from the school of Those Who Cannot Remember the Past Are Condemned to Repeat It. They make a persuasive case that it is only by studying the (costly) mistakes that other businesses have made that executives and investors can steer clear of disaster.
The authors' extensive research takes in the 750 most significant business failures of the past 25 years. (Failure is defined as "writing off major investments, shuttering unprofitable lines of business, or filing for bankruptcy.") The main reason for these flops, they found, was usually a bad strategy: "Once launched, the strategies were doomed to fail, and these failures probably could not have been prevented by even spotless execution."
The authors give seven (of course!) common failure patterns, and they are not shy about listing the corporate Hall of Shame. The misbegotten strategies include Staying the (Misguided) Course (Kodak); Misjudged Adjacencies (Oglebay Norton); and Fumbling Technology (Iridium). But most relevant to the current Wall Street subprime crisis is the Green Tree Financial Corp. debacle. The firm made trailer-home ownership more accessible to low- and middle-income consumers. At its pinnacle, the company financed more than 40% of trailer homes, many with mortgages for people with bad credit. In 1998, Green Tree was bought by Conseco for a hefty $7.6 billion; by 2002, Conseco had declared bankruptcy. "Green Tree was a house of cards, built on financial engineering that could not withstand the test of time," write the authors. It was the third largest bankruptcy in U.S. history at the time--one that now looks puny by comparison with today's debacles.
Carroll and Mui believe CEOs should create a corporate atmosphere that encourages challenge and discourages yes-men. It may even pay to designate a person to play devil's advocate--an official skeptic. The authors believe strongly that inside doubts deserve to be aired before outside financial disaster strikes. They should be getting busy now with a revision to include the epic failures currently taking place in the financial system.
The Myth of Multitasking (How 'Doing It All' Gets Nothing Done) By Dave Crenshaw Jossey-Bass; 138 pages
Are you a master of juggling e-mail, voice mail, cell-phone calls and the like? No, you're not, says this slim fable-cum-manifesto against multitasking. The author, a business coach, gently ridicules the idea that anyone can concentrate on two things at the same time. What we're really doing, he says, is "switchtasking"--switching back and forth quickly and inefficiently from one task to the next. And when we give people our segmented attention and piecemeal time, says Crenshaw, "we end up damaging relationships." So put down that damn BlackBerry, as it were.
Talent Is Overrated: What Really Separates World-Class Performers From Everybody Else By Geoff Colvin Portfolio; 228 pages
How do you get to Carnegie Hall? goes the old joke: Practice, practice, practice. The author, a FORTUNE editor and columnist, is not a big believer in innate talent. "Great performance is in our hands far more than most of us ever suspected," he writes in this provocative book. But ordinary practice isn't enough for extraordinary results. Colvin is a believer in "deliberate practice," highly mentally demanding activity designed to improve performance, which should be repeated a lot--with feedback. Oh, yeah, says Colvin, "It isn't much fun." But it delivers.