Why Smart Executives Fail: And What You Can Learn from Their Mistakes (Hardcover)

~ (Author) "You've seen them on the covers of Forbes, Fortune, and BusinessWeek..." (more)
Key Phrases: delusional attitudes, corporate mistakes, major business failures, General Magic, Red Sox, Snow Brand (more...)

Editorial Reviews

From Publishers Weekly

Is there a more timely topic for a business book than brilliant executives running their companies into the ground? Dartmouth business professor Finkelstein has been on the case for six years, researching how otherwise intelligent people can manage to botch things up. Here, he dredges up old corporate screwups (like R. J. Reynolds's smokeless cigarettes) and new ones, too (WorldCom and Tyco, among others). There's a certain amount of schadenfreude involved, as the author crisply and incisively picks apart disaster after disaster, but the lessons drawn from this lengthy study are, for the most part, vastly unsurprising. While each company profiled tends to fail in its own way, there are common traits among top execs, such as a propensity to eliminate "anyone who isn't 100 percent behind them" and to "underestimate major obstacles." While Finkelstein suggests avoiding such destructive behaviors, the truth is, sometimes it's human nature to be blind to one's own weaknesses. And that's a mystery no book can fully deconstruct.
Copyright 2003 Reed Business Information, Inc.

Review

" Casting off standard management fare, Finkelstein has raised eyebrows with his unconventional research.... lessons are more profound say students." -- Business Week, June 9, 2003

"...managers might be better advised to contemplate how companies fail...Finkelstein identifies 'seven habits of spectacularly unsuccessful people...'" -- The London Times, June 5, 2003

"Sydney Finkelstein...[conducted]...the largest and most comprehensive study of business failure...The result is a treasure trove of blunders." -- Financial Times, May 12, 2003

"Watch the parade of corporate disasters that passes through...'Truly colossal blunders don't come in isolation, they come in clusters.'" -- The Economist, May 31, 2003

See all Editorial Reviews

Product Details

• Hardcover: 318 pages
• Publisher: Portfolio Hardcover (May 29, 2003)
• Language: English
• ISBN-10: 1591840104
• ISBN-13: 978-1591840107
• Product Dimensions: 9.1 x 6.4 x 1.2 inches
• Shipping Weight: 1.3 pounds
• Average Customer Review: 4.3 out of 5 stars  See all reviews (32 customer reviews)
• Amazon.com Sales Rank: #466,836 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

29 of 32 people found the following review helpful:

5.0 out of 5 stars First Time, Shame on Them...Second Time, Shame on You, July 12, 2003

By	Robert Morris (Dallas, Texas) - See all my reviews (TOP 50 REVIEWER)    (REAL NAME)

Initially, Finkelstein really didn't understand, nor did I before reading his book, how and why can so many business leaders fall so far so fast. "How can so many people be do disastrously wrong? What can possibly account for the scores of business failures we see each year, in different industries, and even in different countries? And how can we prevent this sort of thing from happening again?" Finkelstein devoted more than six years of research to answering questions such as these. "My goal was not only to understand why businesses break down and fail, but to focus on the people behind these failures; not only to understand how to avoid these disasters, but to anticipate the early warning signs of failure. Ultimately, I wanted to move beyond ad hoc explanations of failure on a case-by-case basis and expose the roots of these breakdowns in a definitive way." Whereas Peters and Waterman set out in search of excellence, Finkelstein and his research associates set out in search of failure...and achieved that objective. What they found and what they learned are now offered in this brilliant book.

He organizes his material within three Parts: Great Corporate Mistakes, focusing on four different business challenges: creating successful new ventures, managing mergers and acquisitions, coping with innovation and change, and developing winning strategies in the face of new competitive pressures. In Part II, he identifies the underlying causes of failure evident even across different types of corporate mistakes. In this Part, Finkelstein offers a deeper analysis of the common patterns of behavior that executives in failing companies exhibited. In Part III, Finkelstein shifts his (and his reader's) attention to explicitly developing two critical ideas that have stayed in the background to this point. "First, can we use the findings of our study as an early warning system? Can our results tell us how to predict when troubler is coming? And second, how do successful executives create organizations that can learn from, and better yet avoid disaster? What can we learn fro them?"

Almost everything of any significant value I have learned in my life thus far has been the result of personal experience. And almost everything of value I have learned from that experience involved a failure of some kind. Hence the great importance of this book which examines dozens of "smart executives" who failed. They include Jill Barred at Mattel, Dennis Kozlowski at Tyco, Jean Marie Messier at Vivendi, Robert Pitman at AOL Time Warner, and Wolfgang Schmitt at Rubbermaid. Indeed, the research for this book devoted rigorous attention to senior level executives in 51 different companies of various sizes and nature. Where did even the brightest executives go wrong? What can we learn from their mistakes? How can we avoid repeating those mistakes in the future? In essence, that is what this book is really all about.

Long ago, someone made a clever observation that Russian historians always predict the past with absolute accuracy. I recall that comment by way of suggesting that Finkelstein indulges in no gloating whatsoever. There is no indication of any hubris in him even as he examines several victims of that classical affliction. He well realizes -- and with evident dismay -- that the mistakes of any presumably capable executive can sometimes have serious, if not catastrophic implications for hundreds and even thousands of others. He lists and then evaluates seven theories which are frequently offered to explain executive failure. (For example, "The Executives were stupid.") Next, he explains that before the research began, there were no "crystal-clear hypotheses" with regard to patterns of failure. Then on to a series of mini case studies which reveal both the executive mistakes and what lessons could be learned from them. Of special interest to me is the set of early warning signs which the research uncovered. They may not prevent others from making mistakes but recognition of them in a timely manner can indeed reduce the potential damage. Also of special interest are the ways Finkelstein formulated by which to diagnose business mistakes as they are happening.

It may not have been Finkelstein's initial purpose but in fact what he found during his search for an explanation of executive failure is a wealth of information which can help smart executives to succeed. Obviously, there is so much more involved than merely inverting a serious of mistakes (e.g. cooking the books) and then assuming that (Eureka!) a recipe for certain success has emerged. This is a remarkably thoughtful and sensitive book about human failure. How valuable it proves to be is for each reader to determine. If appropriate, when reviewing other business books, I intend to include this book among those recommended for further reading.

I presume to suggest that this book would be an excellent choice to serve as the basis of an off-site meeting of senior level executives. Reading of it in advance would of course be required. I further suggest that the agenda follow the book's structure: Rigorously examine areas in which, over the previous 12-18 months, the organization has either failed or encounted less than the success it desired; next, with equal rigor and (yes) candor, determine the reasons for unsatisfactory performance; finally, determine with meticulous precision the lessons learned and then formulate a game plan to make whatever changes are necessary throughout the organization's operations, with special focus on leadership and management.

Of course, I hope this book helps many smart executives to avoid making the mistakes Finkelstein examines. My greater hope (and presumably his is as well) is that countless others who are not directly involved in the decision-making process will be spared the financial and emotional damage which has been inflicted upon their counterparts at companies such as Enron, Tyco, and WorldCom.

John Donne was right. "No man is an island." That is especially true of senior-level executives.

17 of 19 people found the following review helpful:

5.0 out of 5 stars Meaningful and Entertaining, June 12, 2003

By	Barnaby Dorfman (Seattle, WA USA) - See all my reviews

Someone said, and I believe, that "Success is the result of a series of failures from which one has learned." This book is filled with important and interesting failures that you can learn from. Most business books focus on and celebrate successes in the business world, but here the author has focused on some of the largest blunders in recent history (e.g. Enron, Iridium), as well as lesser known mistakes. What makes it so valuable is that Finkelstein has taken a systematic approach to analyzing these missteps to find patterns that will be recognizable to anyone who has worked in a business. Beyond that, the book offers excellent insight on ways to get back on track and avoid a fate similar to the companies studied.

As for the enjoyable part, the book is told through a series of anecdotes and in-depth retellings of mostly familiar blunders. Reinforced with insider interviews and extensive research of the contemporary media coverage, these stories come alive making it very readable. This combination of message and method make "Why Smart Executives Fail" an extremely valuable and somewhat unique resource.

12 of 13 people found the following review helpful:

5.0 out of 5 stars Couldn't Put It Down, August 20, 2003

By A Customer

As a MBA and manager, I've been reading business books for years, and we all know what that can be like. Weak research, spotty stories, stilted prose. When I picked up Why Smart Executives Fail (don't judge a book by its cover, but this cover is great), it seemed like I was entering a different genre.

The writing is highly entertaining, the stories are fascinating, and the author's (Finkelstein is a b-school prof from Dartmouth) insights are nuanced and carefully drawn. It's hard to imagine a business book being a page-turner, but this one is as close as I've ever seen. All the front page stories are here - Enron, Tyco, ImClone, Adelphia, WorldCom, but there is also a host of companies whose crimes were more strategic in nature - Motorola in the cell phone business, J&J in the stent business, Rubbermaid, LA Gear, and even the Boston Red Sox.

The stories of what went wrong and why are sprinkled with quotes from interviews the author conducted with CEOs, other managers, competitors, and customers, which I found gave me a much better understanding of the key lessons than any previous press accounts I had read. Topping it all off is the author's storytelling skills, which keep you almost entranced. This is one business book that you will want to read cover to cover.