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The Ten Commandments for Business Failure

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One of the fantasy dinners I occasionally think about would include several CEOs and one of them would definitely be Donald Keough. I tracked his career at Coca-Cola and then his association with Allen & Company as its chairman of the board. Regrettably, I never had the chance to meet him (much less dine with him) but was not surprised by the intelligence and sensitivity as well as circumspection that are revealed in his book. Keough is principled but he also possesses what Ernest Hemingway once characterized as "a built-in, shock-proof crap detector." He confirms a suspicion I have had for years: there are many different paths to business success but all business failures share common causes. Keough discusses ten of them, identifying each (with tongue somewhat in cheek) as a "commandment." He candidly acknowledges that throughout his career, he has broken (or at least bent) several of them when making a bad or at least ill-advised decision, notably the one he and former Coca-Cola CEO Roberto Goizueta made involving New Coke. He draws heavily upon his years at that company (1981-1993), citing real-world examples of business failure at a wide variety of companies, some of them otherwise quite successful and highly reputable.

No good purpose would be served if I merely listed the ten "commandments." Keough devotes a separate chapter to each and his insights are best revealed in context. However, I will provide a representative selection of brief excerpts to indicate the thrust and flavor of Keough's narrative, adding a comment or two of my own.

Excerpt: "A company doesn't fail to do anything. Individuals do, and when you probe a bit you usually find that failure lies not in a litany of strategic mistakes - though they may all be present in one form or another - but the real fault lies, as Shakespeare noted, in ourselves, the leaders of the business. Businesses are the product and the extension of the personal characteristics of its leaders - the lengthened shadows of the men and women who run them. (Pages 8-9)

Excerpt: "As Peter Drucker pointed out nearly fifty years ago, it is management's major task to prudently risk a company's present assets in order to ensure its future existence. In fact, if a company never has a failure, I submit that their management is probably not discontented enough to justify their salaries. Xerox was not discontented in any way. They were very, very comfortable, and, as I've noted, when you're comfortable, the temptation to quit taking risks is so great, it'd almost irresistible. And failure is almost inevitable."(Page 23)

Excerpt: "Charles Kettering, the great engineering genius who helped steer General Motors during its glory years, said `Don't bring me anything but trouble. Good news weakens me.' It is instructive that during World War II, Winston Churchill created a special office whose sole duty was to bring him bad news. He wanted the unvarnished truth, no matter what it was...Isolation [from painful realities], carried to its most extreme form, tends to breed a sense of almost divine right."(Pages 51 & 57)

Excerpt: "Watch out for bright lights that surround themselves with dim bulbs!" (Page 55)

Excerpt: "The Jesuit priest and distinguished paleontologist Teilhard de Chardin noted that `no evolutionary future awaits man except in association with all other men.' Therefore, it not only behooves us to treat our fellow human beings with compassion and respect, it is essential for our collective survival. Unethical men and women can flourish for periods, sometimes very long periods, but ultimately their lack of morality - and their lack of humility - destroys them. You cannot build a strong and lasting business on a rotten foundation." (Page 77)

Excerpt: "If you want to get nothing done, make sure that administrative concerns take precedence over all others! Love your bureaucracy!...There are layers upon layers of people, yet when a customer calls, nobody's home. They are all in meetings. These meetings generate more paperwork, more e-mails, more calls, more meetings. In fact, most often there are meetings to plan meetings. Meetings are the religious service of a great bureaucracy and the bureaucrats are fervently religious."(Pages 116 & 120)

With regard to this last excerpt, I am again reminded of James O'Toole's observation that many of the barriers to change initiatives are cultural, resulting from what he aptly describes as "the ideology of comfort and the tyranny of custom." Bureaucrats tend to be the most vigorous defenders of the status quo until convinced that any proposed change will not threaten their own subculture. It should also br noted that waste is one of the most important themes in Keough's book, one that is directly relevant to most (if not all) of his commandments. Drill down to determine the root causes of a business failure and you'll probably find extensive waste of resources and opportunities. In 1963, Peter Drucker shared this insight that remains true today: "There is surely nothing quite so useless as doing with great efficiency what should not be done at all."

Although most of the real-world examples that Keough cites involve major corporations such as Coca-Cola, IBM, Montgomery Ward, Republic Steel, and Xerox, I think that his observations and recommendations are relevant to just about any organization, whatever its size and nature may be. Although he places Commandment One, "Quit Taking Risks," at the top of his list of ten, my own opinion is that the last, "Lose Your Passion for Work - for Life," should be there. Among the most common causes of failure, not only in business but in life, I agree with Friedrich Hegel: "Nothing great in the world has been accomplished without passion." One man's opinion....

Those who share my high regard for this book are urged to check out these books written by other fantasy dinner guests: Benjamin Franklin's Autobiography, Peter Drucker's Adventures of a Bystander and On the Profession of Management, Jack Welch's Winning (with Suzy Welch), and James M. Kilts's Doing What Matters: How to Get Results That Make a Difference - The Revolutionary Old-School Approach (with John F. Manfredi and Robert Lorber). Also Bill George's Authentic Leadership: Rediscovering the Secrets to Creating Lasting Value and his more recent True Blood: Discover Your Authentic Leadership, John C. Whitehead's A Life In Leadership: From D-Day to Ground Zero: An Autobiography, and Sydney Finkelstein's Why Smart Executives Fail: And What You Can Learn from Their Mistakes.

"While no company can ever embrace all of the world and all of mankind, Coca-Cola comes about as close as any."

"The Ten Commandment for Business Failure" by Donald R. Keough, a former president of the Coca-Cola company, is a small book that, if you follow the instructions, will guide you to be a very successful loser. If you do not want to be one, this book is a must read and take those lessons as a cautionary tale.

Coca-Cola is one of the most recognisable brands on the planet but it was still vulnerable to failures. In this book, Keough tells you stories of Coca-Cola, among other companies, on how it became successful and how it failed at times. When you read the words "failure" and "Coca-Cola", I bet the word "New Coke" sprang to your mind. Despite all the stories from any business book or textbook, in this book, you will have a chance to know it from the former president of Coca-Cola himself.

Contents

Commandment One: Quit Taking Risks
"It's reasonable to think that because when you achieve something, even very little, there is the great temptation to quit taking risks." Apart from telling you the reason that quit taking risk is a sure way to failure, Keough wrote briefly about Xerox and how they quited taking risk.

Commandment Two: Be Inflexible
Keough started this chapter with a story of Coca-Cola bottlers in 1940s-1950s and how they almost brought the company down because of the inflexible practice. This chapter also has the examples of IBM and Ford. All in all, "when the conditions around you change, remain inflexible. Keep on keeping on. Stand firm, You will fail.'

Commandment Three: Isolate Yourself
This chapter targets at those who get yourself a great big office in some remote corner of the most remote executive floor and the shut the door. And also put out a sign: "Don't make the boss mad. Bring me no bad news."

Commandment Four: Assume Infallibility
"If something seems to be heading in the wrong direction, cover up, better yet, wait until you have a full-blown crisis, then blame it on some external force - or blame it on somebody else." Keough wrote about a brief ignorance of Coca-Cola that damaged the reputation dearly in Belgium. There was also a story of Coca-Cola in Germany that Keough admitted he was wrong because he somewhat assumed infallibility.

Commandment Five: Play the Game Close to the Foul Line
He wrote about the problem with the Wall Street that made CFO the rock stars of business instead of being the guardians of the transparency and the fiscal integrity of the corporations. "There is no such thing as business ethics. Just ethics. It's not separated from the rest of your life."

Commandment Six: Don't Take Time to Think
Keough wrote that we are in the generation that is obsessed with technology. People said we are in the `information age' but he disputed that we are in the `data age' with all the ICT (Information and Communication Technology). We need to think and Keough tells you the vice of not thinking.

Commandement Seven: Put All Your Faith in Experts and Outside Consultants
This chapter has the popular case study, New Coke, not on how it failed but how it was caused. There is also a nice anecdote on Coca-Cola wine business.

Commandment Eight: Love Your Bureaucracy
"The bureaucrats who control these (bureaucratic) rituals guard them with their lives because any change undermines their own power or authority." He also mentioned that bureaucracy in one of the main reasons talented individuals left the company. There are some short stories of Coca-Cola, Dell, NASA, etc regarding love of bureaucracy.

Commandment Nine: Send Mixed Message
"It doesn't matter what you do, you'll be rewarded." is an example of a mixed message that Keough wrote about. Mixed messages create confusion. He wrote about Columbia and how Coca-Cola purchasing it sent a mixed message to everyone.

Commandment Ten: Be Afraid of the Future
The pessimists will not push anything forward be it corporations or a society. This chapter, Keough hit on the faces of those with pessimism.

Commandment Eleven: Lose Your Passion for Work - for Life
This is the bonus chapter and Keough wrote on how it is the most important one.

...

Next, I'll compare this book to an ideal business book or a book that is easy to understand, distinct, practical, reliable, insightful, and provides great reading experience.

Ease of Understanding: 9/10: It is a little book written in a plain language and all the commandments were beautifully in sync. You do not have to fret with statistical data or figures, everything is easy to learn and absorb.

Distinction: 4/10: The major difference between this book and others is that it is written by Donald Keough. All the commandments and stories in this book are not new, just from an opposite perspective.

Practicality: 8/10: It is somewhat confusing to define `practicality' of this book. Following the book will definitely lead you to failure and this book is written in a sarcastic tone. Thus, do the opposite and use the commandments in this book as a caution.

Reliability: 9/10: It is very hard to dispute his commandments. Look at the ten (eleven) commandments and try to tell which one will not lead to business failure. I can't, and I don't think anybody can. Although his experience alone is great enough, Keough put together different and interesting (albeit indifferent) stories of other companies and industries.

Insight: 5/10: This book is small and the stories are short. I wish stories, especially Coca-Cola ones, are longer with more insight and details. However, another thing I love about this book is quotations from various people. They are not numerous but I like every single one.

Reading Experience: 9/10: You will finish the book in no time. It is a pleasure to read. The tone of the book is sarcastic, casual, and joyful. I have never and will never have a chance to talk to Donald Keough but from the experience I have from reading the book, I come to think that the foreword by Warren Buffet might be true that "Don talks such sense and offers such inspiration. Don can tell you to go to hell so wonderfully you'll enjoy the journey."

Overall: 7.3/10: Get this book and you will like it. There are some flaws because it is very short but I truly believe that you can find much use of it. Hang this book it front of you office to remind you what you must not do in your business and you will shut the door to failure. By the way, I rarely pay attention to the praises and foreword but this book probably has one of the best compilations; Bill Gates, Warren Buffet, Jack Welch, and Rupert Murdoch... well... and George W. Bush!

Anyone reading Donald Keough's book would do well to first review books like How to Measure Anything: Finding the Value of "Intangibles" in Business and The Halo Effect: ... and the Eight Other Business Delusions That Deceive Managers just to keep things in perspective. Both of these authors explain why would should temper "expert opinion" even when it's presented as entertainingly as in Keough's book.

As someone who has been reading case studies and "the world as I see it" books by top executives for years, I find that many of the examples Keough lists are very familiar. Of course, the New Coke example has been around since I was in business school but, since he was there, Keough gets a special "insider's" pass and does provide some useful new insight. The other cases are also a little worn, but I don't think I've every been this entertained reading those cases.

The Ten Commandments themselves are also individually familiar. Does an exhortation to keep one's passion and to remember to take risks really ring that profound? No, but, come to think of it, I haven't found them all in one place nor do I think I found them as engaging as you will find in this book.

Keough will also get extra credit for a convincing appeal to authority. Authors which much more mediocre careers have written books with similar observations but Keough comes off as knowing what he is talking about - and still manages some self-deprecating humor.

This was a quick and delightful read and I found myself laughing out loud, pointing out paragraphs in the book to my friends, and email quotes from the book. I plan to anonymously deliver this book to a couple of people who need it most (they may not get the joke, but I will).

The author used this book to partly write his autobiography, albeit, a condensed version, but he also set out to define what it means to be successful by outlining how to fail. It was interesting in the sense that it made you smile a bit, while realizing that some of the things the author is telling you not to do if you want to fail, or vice versa, you actually do throughout a portion of your life. Definitely not a textbook on success, but more a book to read while at the beach, pondering your past, present and future, and relating it to ways to better oneself with the author's advice. I would recommend it as a beginner's guide to business and career, usable as a stepping-stone to bigger and better texts on the subject.

Former Coca-Cola president Don Keough has written a plain-talking book that exudes wisdom for executive reflection. Although the title is The Ten Commandments for Business Failure, there are actually eleven. Rather than try to provide a formula for success that is unlikely to be replicated, Keough uses his many years of experience to call attention to those approaches and tendencies in each of us that when we practice them are likely to lead to failure. While each of these commandments sounds simple, and they can be avoided in the extreme, each of us is likely to follow them to some degree quite often. In addition to his own experience, mostly at Coke, Keough uses recent examples of executives and companies who have followed these commandments and achieved failure. I read this book at the end of the year, and it provided a great chance to reflect on these commandments and examine which of them I may be following to my detriment. I highly recommend this book to any reader who enjoys plain, straightforward approaches, and who are prepared to think about their effectiveness at work.


Rating: Four-star (Highly Recommended)

Unable to develop a set of rules that guarantee success in anything, Keough instead created a guide for becoming a highly successful loser. Key points, illustrated mostly with Keough's experiences within Coca-Cola, include:

1)Quit taking risks.
2)Be inflexible.
3)Isolate yourself.
4)Assume infallibility.
5)Play the game close the the foul line.
6)Don't take time to think.
7)Put all your faith in experts and outside consultants.
8)Love your bureaucracy.
9)Send messages.
10)Be afraid of the future.
11)Lose your passion for work - for life.

I'm thinking Keough's advice is good for politicians as well.

This is a spectacular business book and I can't imagine that you (and everyone else) would wait another day before starting to read it. Donald R. Keough has had long business experience in running companies and investing in others. He has seen the ups and downs and in this delightfully written and concise book he provides ten things you can do to ensure business failure. They are (and even though I provide them here, you will want to read what he has to say about each of them):

1) Quit taking risks
2) Be inflexible
3) Isolate yourself
4) Assume infallibility
5) Play the game close to the foul line
6) Don't take time to think
7) Put all your faith in experts and outside consultants
8) Love your bureaucracy
9) Send mixed messages
10) Be afraid of the future

and a bonus commandment for failure
11) Lose your passion for work and for life

Keough illustrates each of these stories from his own experience, from well known business stories, from history, and using simple reason. He writes well and makes everything he says read naturally and seem so sensible. Because it is. Yet you and I know and have seen people break everyone of these commandments and the failure that inevitably follows. Of course, like the 10 commandments in the Bible, you can't break one. If you break one, you also break others. For example, committing adultery also involves lying, coveting, and usually dishonoring what your parents taught you. Here, infallibility usually includes inflexibility, bureaucracy, and lack of thought. Right? Just because this makes sense, don't assume you won't fall prey to them. These are the kinds of failings that creep up on you and you have to actively look for them forming in your business. If you wait for them to get to full bloom, you are already in big trouble.

Warren Buffett provides a few pages of introduction that also make sense.

Enjoy, learn, and keep this book handy. I keep it within easy reach.

Reviewed by Craig Matteson, Ann Arbor, MI

Unlike Peter and Waterman's "In Search of Excellence" and Collins' "Good to Great", Keough does not tell corner executives how to map out any strategic directions to achieve business success for their firms. Through more than six decades of business experience, he suggests 10 common blunders that corner executives are used to make and such blunders can take their firms to business failure.

According to Keough, corner executives who aspire to fail tend to avoid taking risks and be afraid of staying in terra incognito, Due to their high level inflexibility and self-complacency, they love taking things for granted, never admit mistakes, and send mixed messages to their people beneath him/her. Moreover, they are great fans of bureaucratic fog and always hire external and experts to make every major decision. Without any passion for work and life, they demand for short term results by breaking the line of ethical behavior.

In this book, Keough seldom adopts management theories to sustain his arguments but an array of business anecdotes is demonstrated to comment about such common blunders made by corners executives from giant firms such as Coca-Cola, Xerox, Kmart, IBM, Republic Steel, Montgomery Ward, and Ford. Keough also concludes that such financial scandals as Enron and sub-prime hurricane can be avoided if corner executives do not fall into one or more of the blunder traps.

Warren Buffet has praised Keough as Mr. Coke because he has made a significant contribution to business growth of Coca-Cola Company before his retirement. This book can be a must-read for corner executives who are eager to avoid making such blunders when the going still gets good.

Warren Buffett said he admires Don Keough and recommended reading anything he writes. When this book was published, I followed his advice and read it. I was not disappointed. This was a quick read that left me wanting more material from Don Keough.

The title was provacative, so I looked at the front cover. Bill Gates and Jack Welch endorsed it and Warren Buffett wrote the Foreward. Thinking it would be hard to beat that threesome, I turned to the Foreward.
Waren Buffett himself writes that "when you are around Don, you are learning something all the time. He's an incredible business leader."
He also writes of a meeting of the very top leaders every few years, where each time Don Keough is asked to be the kynote speaker. Buffett writes that Bill Gates "just loves listening to him because Don talks such sense and offers such inspiration. Don can tell you to go to hell so wonderfully you'll enjoy the journey."

Thus, I bought the book hoping for three things: useful lessons on leadership and overall success, the opportunity to learn in general, and an enjoyable read.

Other reviews in Amazon regarding this book point to the many useful lessons for leaders, and how the book is so much better than others at illustrating these lessons with real-life cases. So many books by very senior executives are exercises in ego, or self-justification. In this book, Keough often shows where he went wrong -- but the point is that he readily recognized and admitted it, took the blame himself, and moved rapidly to the needed solution.
My favorite book on Leadership by someone outside of business, Leading Minds, by the renowned psychologist and education expert Howard Gardner, concludes after exhaustive research that exemplary leaders tell "stories of common aspiration."
Reading this book, one sees how Keough was such a great leader at Coca-Cola for decades -- he is a master storyteller, but it is not about him, it is about a team aspring and pulling together. Indeed, his legendary teamwork with two other humble but globally-renowned leaders, first roberto Goizueta and then Herbert Allen, show that he does put team before self. It would be such a privilege to be a fly on the wall when Keough and his great friend of almost 50 years, Buffett, swap stories - through parables they can make the important and the complex both clear and witty.

Regarding the opportunity to learn in general, this book is an easy read but it contains some profound and far from obvious nuggets. I guess it is because Keough studied humanities in college, which he attended on the GI bill after his service in World War II. He majored in philosophy, which he admits many in business scoff at as "useless knowledge."
This book reveals that Keough learned his lessons well, as philosophy and humanities in general can sharpen one's thinking and communicating skills. what could be more essential to a leader's success?

Reviewers often say this, without meaning it, but in this case Keough's depth and wit ensure that the quotations he provides are themselves worth the price of the book. Perhaps my favorite feature of the book is the comfortable way that Don Keough slips in philosophy, and his obvious love of and knowledge of literature. This book is one of the few written by someone so distinguished that is truly WRITTEN by the cited author. Keough writes with such an energy and personal quality that you know it is all from his fertile mind.
My third hurdle for a great investment of money, but more important in our harried world, time, concerns the enjoyment of reading.
This book is a noteworthy pleasure. So many books on leadership are trite or wooden. so many books by great leaders help you see why they did not become either writers or philosophers. In contrast, this book is one which you will not want to place down, even for dinner. Warren Buffett makes it clear that Don Keough is arguably the greatest keynote speaker in business, but sometimes witty and inspiring speakers cannot bring that off on the written page. Without the benefits of body language, facial expression, tone of voice, physical proximity, etc. it is much harder to be witty in a book.
Keough pulls it off, magnificently.
Finally, it is enjoyable to see the commandments in the negative, vs. the affirmative form. However, it is much more than enjoyble. This unique idea of Keough's makes the reader think more deeply about the commandment. For example, if someone says "take prudent risks", you my say "OK" and forget it. If someone illustrates, with witty applications and cases he has been an ultimate insider in, how NOT taking risks can lead you to fail, it helps lock it in your memory. The very act of thinking how and why not to do something, forces you to think more deeply than you would have about what to do, how to do it, and most important why to do it.
I would likely have read a list of ten things to do and said "Nice, I'll try to remember." Keough found a secret formula that makes me think about and actually remember the steps that can lead to success, by showing the failure caused by the alternative.
The bottom line is that this book is a great investment. I'd recommend it: for you, your employees, clients, or just people on your holiday list who you want to assure that you think have a love of learning and a good clean sense of humor.