Law Religion Culture Review

Exploring the intersections of law, religion and culture. Copyright by Richard J. Radcliffe. All rights reserved.

Wednesday, December 03, 2008

Book Review: Billion-Dollar Lessons: What You Can Learn from the Most Inexcusable Business Failures of the Last 25 Years.

I'm no fan of horror movies. But from the two or three I've seen, I know how they inevitably end. When you see a clueless person enter a dark house or forest, with eerie music, a bloody end can't be far away.

Although not a horror book, 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 (September 11, 2008 [probably not a coincidental publication date]) parallels the horror genre.

When they begin to discuss a business, you know that business is doomed. Words to the effect of it "filed for bankruptcy..." can't be far away. In fact, this is part of a quote from the book regarding a company that filed for bankruptcy in 1990, recovered and then liquidated about a decade later. A two-fer. One of many with the same ignominious end.

The authors "built a comprehensive database of more than 2,500 [business] failures suffered by publicly traded companies in the United States." Carroll and Mui have catalogued these bankruptcies, write-offs, liquidations and other fiascos.

Sifting through the mountainous cremains of the business deaths in this book leads to a couple of conclusions. First, the book amounts to cautionary tales that should scare off just about any cautious putative entrepreneur. The aphorism, paralysis by analysis, comes to mind. Second, the book evinces a smugness that can perhaps be best illustrated by a Monday-morning quarterback. As has been said, hindsight is 20-20.

To their credit, the authors admit their book may led to risk-averse inaction. "The sheer volume of failures may feel overwhelming and may make you feel as if we're telling you to just sit inside all day, for fear that if you venture anywhere you will get run over by a semi." Yes, that's the impression.

Nevertheless, the authors provide a useful balance to the general cant of prevailing business literature.

They ably describe this tendency: "[W]e are encouraged to take risks in business, because we read about those who made 'bet the company' decisions and reaped fortunes--and don't read about those that never quite made the big time because they made 'bet the company' decisions and lost." Billion-Dollar Lessons fills this gap in the business literature. But one should understand this book as a counterbalance and not as a balanced portrayal.

Their "big idea" is to assemble review teams, which they analogize to the Catholic Church's "Devil's Advocate" that would argue the "no" side of a proposed beatification. They urge businesses to have a group argue "no" to a proposed acquisition or similar business move. No surprise there.

Carroll and Mui, however, unwittingly undermine their overall premise. They inconsistently admonish that the review panel should remember that "doing nothing can be a bad strategy, too." Indeed.

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