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Billion Dollar Lessons

What You Can Learn from the Most Inexcusable Business Failures of the Last 25 Years

Paul B. Carroll and Chunka Mui

Portfolio, 2009

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Prolific business writers Paul B. Carroll and Chunka Mui believe you can learn from enormous corporate failures. They examined the failures of thousands of publicly traded companies in the United States and looked for commonalities. They learned that smart people – even the most successful business leaders –sometimes make dumb mistakes. Whether you’re a leader, employee or investor, Carroll and Mui offer tools to help you make better strategic decisions.

Summary

The leaders of many expensive, but avoidable, business failures tend to have followed one of seven strategies.

More than 400 American companies with combined assets of $1.5 trillion declared bankruptcy from the early 1970s to the end of the first decade of the 21st century. Nearly half of these failures could have been avoided if company leaders had understood certain risks. Most avoidable failures followed at least one of these seven strategies:

1. Synergy – Companies overestimated the benefits of a merger.

Executives often fail to see synergy revenues because they don’t perform the detailed work required to detect them. Small mistakes in synergy estimates can cost a lot of money: Only 30% of mergers generate numbers that come close to an acquirer’s predicted revenue synergies. Many companies don’t reach their synergy goals because they don’t fully research whether their theoretical results are possible.Synergies fail because only strategists care about the synergy, not customers, companies overpay for acquisitions, and organizations may not be a...

About the Authors

Paul B. Carroll and Chunka Mui also co-wrote The New Killer Apps: How Large Companies Can Out-Innovate Start-Ups and Driverless Cars: Trillions Are Up For Grabs.

Billion Dollar Lessons

What You Can Learn from the Most Inexcusable Business Failures of the Last 25 Years

Read or listen offline

Editorial Rating

Qualities

Recommendation

Summary

The leaders of many expensive, but avoidable, business failures tend to have followed one of seven strategies.

1. Synergy – Companies overestimated the benefits of a merger.

About the Authors

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