The 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; Portfolio.
The big idea: This litany of bankruptcy, humiliation, and obsolescence suggests that corporate debacles are 1 percent perspiration and 99 percent really dumb inspiration. Although executives blame failed strategies on bad luck or poor execution, the authors write, most are doomed by flawed assumptions at the inception: about complexity of integration, achievable economies of scale, purchasing power, and appeal to customers. The lesson? Companies must build rigorous tire kicking into their decision making -- that is, if they ever brave another major decision after reading this book.
The backstory: Mui is co-author of Unleashing the Killer App, among the best books about the business implications of technology. He and Carroll worked together at a consulting firm. If Killer App is Mui's Paradiso -- a celebration of the bold and innovative -- this new book is his Inferno -- an indictment of the bold and chowderheaded.
If you read nothing else: Kodak's (NYSE:EK) smug indifference to the digital revolution (Chapter Four) and Motorola's (NYSE:MOT) froth-mouthed enthusiasm for the Iridium satellite network (Chapter Six) are familiar tales. But they have rarely been told so well or with such elucidation of worst practices. Though companies are often advised to seek growth by entering adjacent markets, Chapter Five presents a great story about why Avon Products (NYSE:AVP) thought it belonged in the medical-equipment business. Chapter 10, about the importance of devil's advocates, is the chief takeaway.
You can skip: Though lessons for the diminutive abound, Chapter Two, on financial engineering, resonates chiefly with public corporations; and Chapters Three and Seven analyze big-business strategies.
Who knew? Mui and Carroll write that, after World War I, more than 75 percent of U.S. Air Mail pilots died in crashes on the job. The mortality rate was eased only when the Postal Service required the managers who ordered the pilots out in bad weather to go along for the ride.