Editorial Review

The Challenge
Built to Last, the defining management study of the nineties, showed how great companies triumph over time and how long-term sustained performance can be engineered into the DNA of an enterprise from the verybeginning.

But what about the company that is not born with great DNA? How can good companies, mediocre companies, even bad companies achieve enduring greatness?

The Study
For years, this question preyed on the mind of Jim Collins. Are there companies that defy gravity and convert long-term mediocrity or worse into long-term superiority? And if so, what are the universal distinguishing characteristics that cause a company to go from good to great?

The Standards
Using tough benchmarks, Collins and his research team identified a set of elite companies that made the leap to great results and sustained those results for at least fifteen years. How great? After the leap, the good-to-great companies generated cumulative stock returns that beat the general stock market by an average of seven times in fifteen years, better than twice the results delivered by a composite index of the world's greatest companies, including Coca-Cola, Intel, General Electric, and Merck.

The Comparisons
The research team contrasted the good-to-great companies with a carefully selected set of comparison companies that failed to make the leap from good to great. What was different? Why did one set of companies become truly great performers while the other set remained only good?

Over five years, the team analyzed the histories of all twenty-eight companies in the study. After sifting through mountains of data and thousands of pages of interviews, Collins and his crew discovered the key determinants of greatness -- why some companies make the leap and others don't.

The Findings
The findings of the Good to Great study will surprise many readers and shed light on virtually every area of management strategy and practice. The findings include:

Editorial Review

The amazing true story behind the siege of America's favorite beer company

How did InBev, a Belgian company controlled by Brazilians, take over one of America's most beloved brands after barely a whimper of a fight? Timing, and some unexpected help from powerful members of the Busch dynasty, the very family that had run the company for more than a century.

In Dethroning the King, the award-winning financial journalist who led coverage of the takeover for the Financial Times details how the drama that unfolded at Anheuser-Busch in 2008 went largely unreported as the world tumbled into a global economic crisis second only to the Great Depression. Today, as the dust settles, questions are being asked about how the "King of Beers" was so easily captured by a foreign corporation, and whether the company's fall mirrors America's dwindling financial and political dominance.

• Discusses how the takeover of Anheuser-Busch will be seen as a defining moment in U.S. business history
• Reveals the critical missteps taken by the Busch family and the Anheuser-Busch board
• Argues that Anheuser-Busch had a chance to save itself from InBev's clutches, but strong forces behind the scenes forced it to capitulate

From the very heart of America's heartland to the European continent to Brazil, Dethroning the King is the ultimate corporate caper and a fascinating case study that's both wide-reaching and profound. ... Read more

Reviews

Interesting Chronicle of Rise of Anheuser-Busch and its Eventual Takeover
"Dethroning the King" is a thoroughly researched and well-written chronicle of the rise of Anheuser-Busch and its eventual sale to the international brewer, InBev, in the largest-ever cash acquisition.

The first third of the book focuses on the personalities of the three generations of Busch leaders that ruled A-B for the last 80 years. This section is filled with rich anecdotes of inter-family power grabs and contrasting personal and professional management styles. For those not familiar with the Busch dynasty, the stories are fascinating and make for a good read. Following an effective set-up of the main characters, the author profiles what made A-B so successful in its meteoric rise from roughly 20% of the U.S. beer market share in the mid-70s to ultimately capturing 52% by 2002. It was interesting to see how the single-minded focus of A-B's CEO, August Busch III, and the effective advertising campaigns of the 90s helped cause such dramatic results.

Beginning around 2006, however, A-B's management hubris, a massively out-of-market cost structure and extremely insular thinking made the company vulnerable to a foreign takeover attempt. The last one-third of "Dethroning the King" tells a blow-by-blow narrative of how the takeover was planned, financed and executed. The author takes the reader into the Board rooms of both "hunter" and the "hunted" and even manages to save a couple of surprises for the end.

Similar to "The Smartest the Guys in the Room" which told the fall of Enron, in "Dethroning the King" the readers know the end result even before picking up the book yet this does not diminish one's enthusiasm for hearing all of the details of the story. The author's pace is well balanced, and the book is challenging to put down after beginning.

How Was It Possible To Take Over An American Icon?
Author: Julie MacIntosh
Publisher: John Wiley & Sons Inc
ISBN: 978-0-470-59270-0

How was it possible to take over the last major beer maker in the USA in a deal that led to the largest all-cash acquisition in history at a time when major banks and financial institutions were falling like dominoes?

Award-winning financial journalist Julie MacIntosh was assigned by the Financial Times to cover the takeover of Anheuser-Busch by the Brazilian company InBev in the summer of 2008. Drawing on her dozens of interviews with people close to both companies, MacIntosh fleshes out the intimate details that made the takeover possible. With her Dethroning the King: The Hostile Takeover of Anheuser-Busch, an American Icon, MacIntosh has crafted a story that reads like a work of fiction, as we are privy to the shockingly quick capitulation of an American beer legend.

What is noteworthy about the story is that MacIntosh excels at drawing candid portraits of some of the essential characters in the drama, permitting us to witness the dynamics of the takeover, as well as its intricate facets. All of this is made possible with her choice of interesting blunt quotes and opinions that she was able to garner from her interviews. These were executives who were shell-shocked, once InBev made its initial offer to takeover the company at sixty-five dollars a share. What would it be like when they no longer worked for the most famous employer in St. Louis? On the other hand, what would be the worth of their stock and options? What did August A. Busch III and his son August IV think of the offer and what role did each play in the eventual sell-out? The latter was the CEO at the time of the takeover, while the former was a member of the board of directors, who had considerable clout in swaying executives and board members to this thinking. And what about the lowly employee who did not walk away with great buyouts or stock options and who had toiled for the company for the years?

In the end Anheuser-Busch went for seventy dollars a share and if you are asking why InBev wanted to purchase Anheuser-Busch, perhaps it could be best summed up by MacIntosh when she states that August III brilliantly realized that the key to selling his company's beer was advertising and he was involved in the advertising up to his eyeballs. "He knew the criticality of advertising to the brands. Budweiser was created by the advertising. This is what InBev wanted to buy.-all the stress and sweat and tears through which Anheuser-Busch magically turned its middle-of-the road beers into a patriotic movement."

This is also is a story that is filled with what ifs, as well as questionable motives as to what and why the takeover transpired? Moreover, as MacIntosh points out, "Anheuser's hubris and navet� had led to its fall from grace, and it provided an apt comparison to the broader state of America at the time."

On a final note, the book leaves the reader with a sense of empathy for many of Anheuser-Busch's employees who were sent packing without stock options and other goodies that several of the more fortunate executives walked away with.

Norm Goldman, Publisher & Editor of Bookpleasures

Terrific character-driven book with drama and pathos
MacIntosh's book is a fascinating look behind the scenes of a story of an American business tragedy. When InBev started looking around for a target for its efforts at globalization, Annheuser Busch was ripe for the picking. The author details why with a reporter's detailed interviews and a novelist's approach to storytelling! It is a compelling book not to be missed!

Exciting story about both the takeover and the dysfunctional family
Julie MacIntosh's book was an inside view of both the hostile takeover and the dysfunctional Busch family.

The book reads like a novel and after the second chapter, I couldn't put it down.

Her character development and fascinating stories were terrific.

Highly recommended.


Jim F.

Page turner
Dethroning the King is well researched and well written. It is pretty unbelievable that a non-fiction book can be written in such a way that you can't put it down, but MacIntosh has managed to do just that. I enjoyed the depth the book goes into in describing the cast of characters which are, as you may expect, larger than life.

Brilliant, truthful writing that is also incredibly entertaining!
You won't put this book down. It may take several sittings, but this is a story so well told that you can't stop reading! The InBev transaction with AB is a fraction of what this book is really about...the characters are what drive this story. I highly recommend Dethroning the King!

Amazing book! If you like Michael Lewis you'll love Julie Macintosh.
This is an awesome book and should have lots of crossover appeal. It's written in a way that sucks in the diehard business types, but doesn't leave the average person confused. People here in St. Louis are buzzing about the potential that this could become a hit move (like the blind side for lewis). This is a drama full of interesting characters and fascinating stories...future best seller!

Like a mystery book.
Story reads like a good mystery. The ending is known before one starts the book, but I found the book easy to read and hard to put down. One understands the characters and what they were feeling as decisions are being made. Book will be a great case study for business schools. ... Read more

Editorial Review

No owner has changed the landscape of sports more than New York Yankees owner George Steinbrenner. From the moment he bought the team in 1973 for $10 million, Steinbrenner's monomaniacal pursuit was to restore the most fabled franchise in baseball history to its former glory. Today the New York Yankees are worth more than $1 billion and are once again world champions.

Award-winning sportswriter Bill Madden traces Steinbrenner from his early days in Cleveland through his years as a shipping magnate, a Nixon fund-raiser, and a champion horse breeder to the fateful moment when he bought the Yankees, even though his father disparaged George's desire to own a professional sports team as a "hobby." Over the next four decades, Steinbrenner's tumultuous reign included his epic battles with Billy Martin, Reggie Jackson, Dave Winfield, even beloved Yankee captain Derek Jeter. His ruthless and free-spending tactics made him a lightning rod for controversy but they also paid off: Steinbrenner's Yankees have won seven championships and remain the gold standard in all sports. In the last few years, with his health declining, the Boss ceded control of the team to his sons, but not before lording over the team's historic transition from the House That Ruth Built to the House That George Built.

Throughout his three decades of covering the Yankees, Bill Madden has cultivated hundreds of sources at every level in the organization, from the many managers and front-office personnel Steinbrenner has fired to the bat boys who are ever present in the locker room. All of them have colorful stories about the man with whom they have enjoyed a love-hate relationship, but it is the Boss himself whose voice rises above the rest. And when Steinbrenner decided to give his final print interview, he spoke to Madden to set the record straight on his extraordinary life and career.

Reviews

Workman-like piece of sports journalism, June 3, 2010
Reading this book is like driving by a 10 car pile-up: horrifying, but fascinating nonetheless.

George Steinbrenner in his professional life has, on occasion, exhibited rage, narcissism, and greed. He has been accused of being a coward and a bully. He could also be creative, persuasive, sentimental, and spectacularly generous, and is indisputably one of the most financially successful sports businessmen in history. Thus, his biography - told straight up - makes for compelling reading. And this is what is delivered by the author, Bill Madden, an award-winning sportswriter who covered the NY Yankees beat for decades during the George Steinbrenner era.

This book is about what you would expect from a respected, veteran sportwriter, such as Madden: an excellent piece of reportage and sports journalism. Steinbrenner's story is fascinating stuff, even without analysis or embellishment (and, thus, the book's shortcoming). While a fascinating read, there is virtually no analysis of Mr. Steinbrenner's behavior or mental status, nor of his business genius, no explicit analysis of whether the greatness of the Yankees under his ownership occurred because of, or despite him.

Highly recommended.

George, Billie, Reggie -- It's Got It ALL, May 11, 2010
If you're a New York Yankee fans, a NY sports fan, a baseball fan, a sports fan in general, or just want to read the humorous and crazy happenings of the New York Yankees under George M. Steinbrenner, this book is a must read. In fact, when you consider the impact today in sports on ticket prices, free agency and player movements, and cable TV and network contracts, the impact that the Yankees and Steinbrenner have had is not to be underestimated.

Bill Madden is the New York Daily News longtime Yankees beat writer and MLB columnist since the 1970's. Madden was there for the "Bronx Zoo" years of the 1970's when contract jealousies, fights, backstabbing, and personal hatred seemed to go hand-in-hand with the winning of those late-1970's Yankee teams. Madden continues into the 1980's, when despite a World Series appearance in 1981 and the signing of the biggest free agent of the decade (Dave Winfield) and one of the all-time Yankee greats in Don Mattingly, the decade was barren for the team. Not until the 1990's (more below) would things turn around.

Madden gives you all the details: how Steinbrenner and a consortium bought the team for $10 million (with George putting up less than $200,000); the crazy antics involving Steinbrenner, Billy Martin, and Reggie Jackson; the plunge into free-agency with Catfish Hunter and later Don Gullet which revolutionized baseball; the seedy antics involving the undermining of his managers, GM's, and team presidents; the Howie Spira episode which got George suspended by Fay Vincent; and how the expulsion from baseball in the 1990's ironically led to the Yankees rebirth. It's all there and a whole lot more.

It is ironic that Steinbrenner has had such phenomenal success with the Yankees, but mediocre success with his other businesses like shipbuilding and horses. Anyone who remained in George's good graces - client or ballplayer - did well by him. For instance, when the Yankees signed their historic 12-year, $500 million contract with MSG Network, it was considered a disaster for MSG. Midway through the deal, it was such a lucrative goldmine for MSG that the Yankees eventually created their own YES Network whose value today might be worth more than the Yankees and the new stadium combined.

Madden is sympathetic to Steinbrenner and his personal like and respect for the man clearly comes through. That does NOT mean that he is not fair or objective, he certainly is. Steinbrenner's many good deeds toward people, even those who he fired, ripped, or treated badly are well-documented here (and there are probably numerous other cases and charities that Madden did not include).

The gradual dissolution of the Joe Torre-Steinbrenner relationship, after the spectacular dynasty of 1996-2003, is also detailed at length. It's easy to see why the current regime, led by sons Hal and Hank, felt no attachment towards keeping Torre after 2007. Steinbrenner's personal side is also explored, along with the humorous recountings of his "Saturday Night Live" hosting and "Seinfeld" appearances (actually, Larry David since George's actual appearance got left on the cutting floor).

Bottom Line: A great read through 4 decades of Yankee and Steinbrenner history, plenty of baseball talk, lots of additional color and information on incidents you heard about but never knew the full story about, and lots of other funny happenings and discussions and behind-the-scenes player trade proposals and firings and hirings that never happened or did happen or which Steinbrenner wanted to happen or didn't want to happen. It's all there and then some. Yankee fans and Yankee haters will both enjoy it.

An Oxymoron, June 1, 2010
This is a facinating study in of a brilliant business man. His drive to win, in everything, leads him to treat people as chattel in working relationships, yet his compassion drives him to care for these same people in his personal relationships with them. The outward tyranical businessman has a thread altruism that manifests itself in his many charitable enterprises, which are not dealt with in any great detail. I believe the book is too heavily weighted in with negatives, of this force of nature that was George Steinbrenner, as compared to his positive contributions. That said it is a facinating look behind the curtain at baseball. It was a quick read for a Yankee fan.

Outstanding!!, July 2, 2010
My years as a Yankee fan have coincided almost directly with the number of years they've been owned by Steinbrenner - so nothing here was groundbreaking news for me. Nevertheless, Madden simply did a great job of giving readers an inside look of the man - the good, the bad and the ugly. Great read!!

George, Uncensored., June 7, 2010
Bill Madden writes a rollicking and very funny book on the life and times of Yankees owner George M. Steinbrenner. You will laugh and cringe at the same time readin this book, George ruled with an iron fist and it hit everyone.Very entertaining and insightful, also bings back memories and names from the past, some u may have forgotten about. Great book.

Madden Offers a Fair and Balanced Glimpse into the Life of a Friend, June 7, 2010
Just a few generations back, many professional teams were family-run operations that were in business for the long haul. Now there is just one (at least in baseball), and the end of an era is in sight, according to STEINBRENNER: The Last Lion of Baseball, by award-winning sports columnist Bill Madden.

There are many adjectives used to describe George Michael Steinbrenner III, principal owner and chair of the New York Yankees, and most are not complimentary. Since he took over the team in the early 1970s, there has been no shortage of fodder for the local press, including Madden, who has followed the game for the Daily News and New York Post. "Der Boss" (one of Steinbrenner's many nicknames) was famous for a fiery temper; prior to Joe Torre's lengthy stay as skipper, the Bronx Bombers went through 20 managerial changes between 1973 and 1995, including many repeat performances, most notably by the late Billy Martin. And that doesn't even take into account the front office. He would order his underlings to handle a task or acquire a certain player, often disregarding the objections of those far more knowledgeable in such matters, and then explode when things didn't work out the way he desired (and his staff expected). He would fire, then rehire, at the drop of a pin, often excusing the hasty behavior with "I didn't really mean it" or "I'll let it go, this time."

Yankees fans and haters are well aware of Steinbrenner's mercurial nature. His apologists point to his success; his enemies note the distractions and bad feelings among the team's personnel. Forget the infamous quote from Reggie Jackson about being "the straw that stirs the drink": that sobriquet should go to Steinbrenner. In fact, one has to wonder: does such drama like this occur on other teams (the husband-and-wife owners of the Dodgers are going through a nasty divorce, for example), or do we hear more about Steinbrenner's antics because his team plays in the media capital of the world?

Does Steinbrenner's megalomania come from some deep-rooted desire to both win the approval of his father --- a strict, hardworking and successful businessman --- and yet prove himself as his own man? Hard to say, although Madden certainly pushes the reader in that direction, albeit without the psychological profiling. Citing one example after another, he chronicles the Yankees chief as a bully and a liar, who could be incalculably mean and cruel, then turn around and create a foundation to make sure the orphans of New York City police and firefighters could go to college, or drop everything at the news of a friend in trouble. Madden includes the praise as well as the lash, but the former is far-between or generally underreported throughout the years; for all his penchant for being the center of attention, Steinbrenner didn't go after the press to note his good deeds.

Madden --- who was recently named winner of the Baseball Hall of Fame's annual Spink Award for outstanding career accomplishments as a writer --- strives to be even-handed. His role for the New York papers put him in a position to write a first-hand account, but he uses that relationship with a light hand, relying on his skills as a journalist rather than employing his personal observations. While dutifully covering Steinbrenner's rightful banishment from the game in the 1970s because of his illegal campaign contributions to Richard Nixon's presidential campaign, Madden goes to great lengths to show that his subject was unfairly treated by Commissioner Fay Vincent, who kicked him out of the game in 1990 for giving $40,000 to Howard Spira, a hustler and gambler, for his role in digging up dirt on Yankees outfielder Dave Winfield, with whom Steinbrenner was feuding over financial matters. Baseball, it seems, is not a law unto itself, and even Steinbrenner has rights of due process.

Sadly, the last few years have not been kind to the Yankees' leader. Ill health has rendered him a shell of his larger-than-life persona. Madden reports this with a mix of professional objectivity and personal sadness (after all, the two had had a working relationship and had even been fairly close at one point).

Are there elements in here that might embarrass Steinbrenner and his family? Perhaps. But as Madden relates in the introduction, he undertook the project at their suggestion. And judging by all accounts, he seems to have done a fair and balanced job.

The real George behind The Boss, June 2, 2010
I grew up in the Bronx as of course a Yankee fan, unfortunately starting my fandom as a 9 year-old in 1965, which was the beginning of a long decline (do the names Horace Clark, Dooley Womack and Bill Monboquette ring bells?). So George Steinbrenner rescued the franchise from corporate-led (CBS) loser-dome. George's influence on not only Major League Baseball but all of professional sports is undeniable, taking advantage of free agency, cable networks and a win-at-all costs attitude (not that common among owners over the years) and very public face to drive a winning record. In many ways the antidote to what Charlie Feeney became in Oakland. Bill Madden has created a very readable book, sticking to the facts, straight chronology and a terrific set of sources. Madden doesn't try to analyze much, as he is a newpaper reporter at heart, not trying to drive a specific agenda. He reminded me why I despised Steinbrenner for much of his career, and many fans may have forgotten some of his dispicable behavior. Who would want to work for a boss like George? Not many of his many GMs, Managers, old friends or other executives. George displayed almost schizo-behavior, reminding me of my 4th grade teacher who would erupt in anger at a student before flipping 180 degrees and smothering him or her with kisses. George did it with power and money, and Madden clearly shows why George was at times a loyal friend, philanthropist and citizen. "At times" being the key words. There is a great film in here, and I can't wait to see someone other than Larry David playing The Boss!

The Definitive Biography, May 22, 2010
This is the book many of us lifelong fans have been eagerly awaiting for quite some time now. With Steinbrenner's health failing relentlessly, I was beginning to despair that it would ever be written. But here it is, and thank goodness it was written by the guy best qualified to write it.

It will undoubtedly go down as the definitive Steinbrenner biography, and deservedly so. It is not a hatchet job, but neither is it a valentine - it is an accurate account (to the extent that that is possible without Steinbrenner's direct cooperation) of the Steinbrenner Era, the greatest and most tumultuous period in Yankee history since Ruth, Gehrig, and the rest of Murderer's Row prowled the Bronx.

Madden is a long-time Yankee beat reporter who knows Steinbrenner better than anybody, and has first-hand knowledge of the entire Era except the early, Gabe Paul days; and he was given exclusive access to first-hand materials from that period by Paul's family. Nobody has a more intimate knowledge of the Steinbrenner Yankees except Steinbrenner himself, and he clearly is no longer capable of writing his own memoir, nor would he be nearly as objective a narrator if he were.

There are surprising stories you wouldn't expect to read about a relentless publicity hound. For example, Steinbrenner quietly financed numerous college educations -- the total number will never be known -- for many people, some complete strangers, out of his own pocket. And unlike earlier books -- particularly the error-riddled Golenbock biography -- Madden gets his facts straight. Plus, the account is as accurate and objective as can possibly be expected from a writer who was right in the middle of many of the wacky high jinks he describes.

It is also the best book yet about the Yankees organization itself, in any era, with the possible exception of "Damned Yankees" (also written by Madden, along with Moss Klein).

Steinbrenner and the Yankees are the Churchill cigars of sports: world famous, impossible to ignore, and either loved or reviled by everybody. Fans and abominators alike will find plenty of anecdotes to bolster their preconceived opinions; but any fan of sports or human nature, regardless of his or her Yankee leanings, will enjoy this book, both as a history lesson and as a rollicking, funny memoir by a really good sportswriter who really was there.

The Steinbrenner Formula for Success, May 21, 2010
George Steinbrenner is an intense man; no doubt. Those eyes; he always looks like he's about to fire somebody, which of course, he's done with great regularity since first taking ownership of the New York Yankees in 1973. One would think that his abrasive management style would produce less than stellar results; a team in turmoil seldom succeeds.

However, this particular team has succeeded like no other sports franchise in history, and they've got the trophies to prove it.

In a most compelling biography, Bill Madden has chronicled the tumultuous reign of King George, from its shaky beginnings to its glorious present. In between, we observe the good, the bad, and the ugly of this fascinating and perplexing personality. Love him or hate him, Steinbrenner and his assorted cast of characters have been quite a show; at times rollicking; at times poignant; but always great theater.

Along the way, Madden has done a superb job of taking the reader along for a most enjoyable and wild ride with baseball's "last lion". Certainly, there will be no one quite like George Steinbrenner again.

great book on the boss, June 6, 2010
as a yankee fan from way back in the day this is the kind of book that debates conversation, laughters, what was that he did are all there. Billy, Reggie, Munson, Winfield, Donny baseball, Jeter, Riveria,Torre, his sons, his power, money,drive, will,etc.. are all well put together and you get an inside and all around look at the Empire that George Steinbrenner built. One of the last Rebels in baseball. think Jerry Jones the Dallas Cowboys owner didn't take a page or two from the Steinbrenner way of operating?

very compelling and well written and a must for any Yankee fan. ... Read more

Editorial Review

Entrepreneurial dreams do come true! Starting with nothing more than a home brewing kit, Sam Calagione founded Dogfish Head Craft Brewery and made it America's fastest growing independent beer. This unconventional business story reveals how Calagione found success by dreaming big, working hard, and thinking differently-and how you can do it too.

"Rarely is a book as good as a beer but this one is. It's written with humor, humility, and passion, essential ingredients for any entrepreneur."
-Bob Guccione Jr. founder of Spin magazine and Gear magazine

"Brewing Up a Business will inspire both entrepreneurs and aspiring small business people to have the confidence in following their dreams."
-Jim Davis Chairman and CEO of New Balance

"Sam Calagione embodies the spirit of a true Delaware entrepreneur. Starting out as the smallest brewery in the nation, Sam's ambition, acute business sense, and vision have allowed Dogfish Head Craft Brewery to successfully enter an extremely competitive market as Dogfish Head continues to leave an indelible mark on the beer industry."
-Ruth Ann Minner Governor of Delaware

"Everything you want to know about succeeding in business you can learn from beer. At least you can if it's the remarkable story of Dogfish Head Craft Brewery. Brewing Up a Business is like a 'how-to' manual for entrepreneurs. With humor, creativity, and wisdom, Sam Calagione has crafted a new kind of business book that's as unique as his great beer!"
-Joe Calloway author of Becoming a Category of One and Indispensable ... Read more

Reviews

To answer your question...

So why buy this book? The reasons are three-fold:

Firstly, if you have any interest in what makes Dogfish Head, Dogfish Head, you're a candidate. This book provides a peak at the mind behind the movement, the creation of the brand, and the hard years that made the company. It will give you a look at what's behind the label, behind the bottle, and into the blood, sweat, and tears. Chances are you already know how unique the beer is, but you may not know why.

Secondly, if you have an interest in starting your own business, of any kind, there is something for you in here. It must be said that, though this book centers on starting a small business, it should be used primarily as a springboard to bigger ideas not as a blueprint. Sam introduces a large number of ideas from which to develop your own strategies and fit your own needs. To his credit, he never explicitly tells you what to do (though occasionally what not to do) which is positive because your business should have your personality in it, not Sam Calagione's. Again to his credit, he provides the reader with his own sources during his years of preparation. Books by other entrepreneurs which will help flesh out any idea. He also gives his OWN credit to the many people that got him and Dogfish Head where they are today. That is not a common theme in the world. Again, this book is not for you if you're looking for advanced strategies or specific business models. But it's a fantastic starting point.

Lastly, this book is wonderful for literature's sake. Even someone with no deep interest in beer or business can appreciate it. I've passed it on to several who have. Sam's superb writing style, along with his stories and anecdotes, serve both to keep the book entertaining and to illustrate and emphasize his points.

Honestly, there is no reason not to own this book. Anyone and everyone can learn something from its pages whether it be a major revelation, or a minor insight. Dogfish Head's motto is "Off-centered ales for off-centered people," but this book hits it dead on.

My husband LOVES this book
My husband has had dreams of starting a brewery, after getting into home brewing. I bought him this book to help him learn more, and he is constantly talking about it. Now he is looking into more details, and maybe one day soon we will be "Brewing up a Business" as well!

An intoxicating look at the startup beer biz.
A great read; full of enlightening small business/marketing info and entertaining anecdotes specific to Sam's life and the brew biz. Reading it makes me want to start a business and drink beer...preferably at the same time!

A non-dry journey - very entertaining
Mr. Calagione is certainly passionate about his business. This book takes the reader on an entertaining journey from the time Mr. Calagione brewed his first beers until the present - operating one of the most successful and innovative craft breweries in the country. Great read for both the aspiring entrepreneur or anybody interested in the brewing business. Highly recommended! ... Read more

Editorial Review

The first authoritative history of hedge funds-from their rebel beginnings to their role in defining the future of finance.

Based on author Sebastian Mallaby's unprecedented access to the industry, including three hundred hours of interviews, More Money Than God tells the inside story of hedge funds, from their origins in the 1960s and 1970s to their role in the financial crisis of 2007- 2009.

Wealthy, powerful, and potentially dangerous, hedge fund moguls have become the It Boys of twenty-first�century capitalism. Ken Griffin of Citadel started out trading convertible bonds from his dorm room at Harvard. Julian Robertson staffed his hedge fund with college athletes half his age, then he flew them to various retreats in the Rockies and raced them up the mountains. Paul Tudor Jones posed for a magazine photograph next to a killer shark and happily declared that a 1929- style crash would be "total rock-and-roll" for him. Michael Steinhardt was capable of reducing underlings to sobs. "All I want to do is kill myself," one said. "Can I watch?" Steinhardt responded.

Finance professors have long argued that beating the market is impossible, and yet drawing on insights from physics, economics, and psychology, these titans have cracked the market's mysteries and gone on to earn fortunes. Their innovation has transformed the world, spawning new markets in exotic financial instruments and rewriting the rules of capitalism.

More than just a history, More Money Than God is a window on tomorrow's financial system. Hedge funds have been left for dead after past financial panics: After the stock market rout of the early 1970s, after the bond market bloodbath of 1994, after the collapse of Long Term Capital Management in 1998, and yet again after the dot-com crash in 2000. Each time, hedge funds have proved to be survivors, and it would be wrong to bet against them now. Banks such as CitiGroup, brokers such as Bear Stearns and Lehman Brothers, home lenders such as Fannie Mae and Freddie Mac, insurers such as AIG, and money market funds run by giants such as Fidelity-all have failed or been bailed out. But the hedge fund industry has survived the test of 2008 far better than its rivals. The future of finance lies in the history of hedge funds. ... Read more

Reviews

Best of the 10 finance books for the layman I've read in the last two years
If you have read "Too big to fail", "House of Cards", "Big Short", "Lords of Finance", "Fool's Gold", etc. you will like this book better. More wisdom based on incredible research and interviews. I was initially resistant to Mallaby's recommendations about financial reform, but he sold me based on reasoning well supported by evidence. The clearest, most readable and reasoned discussions of the efficient-market theory and Soros' reflexivity. If you don't know those terms, read this book anyway. He will at the end and you'll be glad whether you interest is investing or just voting. This is scholarship dressed up as popular non-fiction. On a par with Tom Wolfe and Malcolm Gladwell for brining non-fiction to a wide audience.

Deserve a place in any traders' library
When I read through page#97, my first thought is this book will rank as high as the Remini of a stock operator and two market wizards book. Now I am in page#179 and I still think so. This is one of the best trading books I read in the recent five years.


I was a history and war buff, the one thing I notice is that a thick detail history or biography books often are not as good as books that are writen from a high level but with a lot of details to illutrate the pointd made. This is one of those books. For example, the details regarding 1992 pound sterling is the best one I read so far. It fully make the points regarding Soro's character. Better than any Soros's biography or the books writen by himself.

The traders the author chose cannot be better.

From a trader's prespective, this book will go down in history as top five trading books all time.

I believe this is the 2nd Amazon review I wrote ever. and it deserve the time I spent.

A developer from <[...]>The Options Lab

Revealing study of hedge funds
Sebastian Mallaby, the Paul Volcker Senior Fellow in International Economics at the Council on Foreign Relations and a Washington Post columnist, has written a most illuminating book on hedge funds.

The top three hedge-fund managers in the USA get $1 billion each a year. The money comes from fees (often a fifth of the profits), short selling and leveraging bets with borrowed money. Then they apply the whole package to bonds, futures, swaps and options. Mallaby calls it a `carnival of creativity and greed'

Hedge funds claim that they make the market work. They believe the myths that the markets are always right, that they correct themselves, that the chaos after the credit crunch could only happen once every billion years. They base their models on assumptions of `rational expectations' and `efficient markets'.

But the efficient-market theory crashed with the 1987 crash, the bond market meltdown of 1994, the Long-Term Capital Management bust in 1998 and the crisis that started in 2008. Currency markets, like equity markets, do not tend towards an efficient equilibrium. As Keynes said of those gambling on bubbles, "the market can stay irrational longer than you can stay solvent."

In reality, hedge funds are not about making markets more efficient or prices more accurate. They are all about seizing profits from other people's wealth-creation. They are parasites.

Michael Steinhardt, for example, made his fortune by milking discounts offered by pension funds and mutual funds. His collusion with brokers harmed the funds, which would have got better prices for their stock if insiders hadn't fixed the market. So the losers were millions of ordinary Americans, the winners were the millionaires who invested with Steinhardt.

Britain's membership of the Exchange Rate Mechanism (1990-92) gave speculators an opening. The Major government spent $27 billion of reserves trying to save the overvalued pound. After we left the ERM, the pound fell 14 per cent, losing the taxpayers $3.8 billion. The great philanthropist George Soros got $1 billion, in a `vast transfer of wealth from taxpayers to traders'.

In 1997, the hedge funds caused Asia's financial crisis. Soros' fund sold the overvalued Thai baht short. His fund made $750 million from the forced devaluation; Thailand's output fell by 17 per cent, plunging millions into poverty. Then Soros told South Korea it must `restructure' by making it easier for employers to sack workers.

As Mallaby sums up, "During the crises of 1997, hedge funds had profited by betting against governments that set illogically high prices for their currencies. In the hangover from those crises, hedge funds would profit by betting against governments that set illogically low prices for the broken jewels of their economies."`

Morgan Stanley and Goldman Sachs boasted of their independence from governments, yet when in trouble in 2008 begged for government funds. The International Monetary Fund said the bailouts cost the taxpayer $10 trillion.

Future crises are bound to happen. As Mallaby writes, "When banks can pocket the upside while spreading the cost of their failures, failure is almost certain."

As he notes, "government insurance encourages financiers to take larger risks; and larger risks force governments to increase the insurance. It is a vicious cycle", which, he warns, "will go on until governments are bankrupt."

Surprisingly Enjoyable History of the Evolving Role of Hedge Funds.
The splashy title "More Money Than God" doesn't do Sebastian Mallaby's hedge fund chronicle justice. It sounds like a gossipy tour of New Gilded Age wealth. Hedge fund managers are among the nouveau mega-riche, but that's not what Mallaby's book is about. This is a history of the major developments in hedge funds from Alfred Winslow Jones' pioneering "hedged fund" in 1949 through John Paulson's 2007 coup in shorting sub-prime mortgage securities and beyond. Mallaby defends hedge funds against the rash of criticism that their successes and failures in the past few years has unleashed by chronicling the changing role and increasing power of hedge funds over the past 60 years. He presents both views of hedge funds, with examples: They make markets more efficient and stable and led the flow of capital to the developing world. Their aggression and high leverage can be a destabilizing force, and their history is not free of underhanded tactics.

Mallaby lets the larger-than-life personalities of hedge fund magnates lead us through his history. He chooses hedge fund managers whose innovations influenced the industry: Alfred Winslow Jones' hedged fund that made 5000% in 20 years of the post-war era, Michael Steinhardt's success in the 1960s and 1970s with contrarian ideas, monetary analysis, and block trading, the econometrics of Commodities Corporation, Bruce Kovner's "carry trade", George Soros and Stan Druckenmiller's currency speculation in the 1990s, the superior stock-picking of Julian Hart Robertson's Tiger Fund, Paul Tudor Jones II's market moving, Long-Term Capital Management's lesson in leveraged finance, James Simon's Medallion Fund and David Shaw's fund as different styles of quantitative trading, Ken Griffin's multi-strategy Citidel, Amaranth's 2006 blow-up, August 2007's "quant quake", and more.

Mallaby admires hedge funds, because they find more success than investment banks with less systemic risk and no taxpayer-funded bailouts, but he doesn't avoid legitimate qualms about their role. Mallaby concludes by making a case against regulating funds with fewer than $120 billion in assets. He points out the hedge funds blow up all the time (5,000 failed between 2000 and 2009) but still fare better than investment banks or the S&P, even after correcting for survivorship bias. Mallaby's approach to the good and bad of hedge funds is thoughtful and engaging. I was surprised how much I enjoyed this book. It's a gold mine of information for those who are not sure what a hedge fund is or what they do, and it can serve as a (patchy) introduction to global finance. For those who read the Financial Times every day, "More Money Than God" is a compelling history of the industry and a fun read, even if some of it will be old news.

Easy Read
It can become a guily pleasure reading about Hedge Fund managers success and extrodinary wealth. Mallaby's book does something bold in that is stands up for what is often a villified segment of the investment world. Mallaby humanizes characters like George Soros and Julian Robertson but also gives tremendous insight into their strategies, why those strategies worked, and how they occasionally failed. Whether you work in finance or are just a casual follower of the markets this book has a narrative flair that makes it an easy read but the depth to leave you with some important lessons and views.

Lack of Fear Itself


Inverting Franklin Roosevelt "...investors should fear the lack of fear itself". This is just one insight Sebastian Mallaby gives us in `More Money Than God'. In fact, he gives a nuts and bolts feel for Hedge Funds, their history and the people - the masters of the universe - who operate them. It is a history of leverage, short selling and size characterized by major success and catastrophic failure.

Strangely, it also gives the small investor an insight into the share market. Is the market efficient? Can the market be beaten? If the market is not `efficient', hedge funds (and the small investor) can be successful. But sadly for an ongoing hedge fund, success removes the imperfections that it was profitably exploiting. "Sooner or later, every great investor's edge is destined to unravel" and often "quant brainiacs follow their computers to a well-deserved doom" because "the rocket scientists had blown up their rockets".

Success means a flood of money into the hedge fund. But "an analyst might identify a promising small company and figure that its value could double over three years, but if there were only $20 million worth of shares available to buy, it was hardly worth bothering with." Not so for the small investor, but then again the hedge funds seem to be able to short sell flexibly at will - a facility that should democratically be available to the small investor.

Starting in the 1990's, hedge funds became large enough to move markets of all kinds. They could even overpower governments. This allowed the Tiger Fund in 1998 to approach "Russian friends...to buy the entire stock of nongold precious metals held by the central bank and finance ministry...take the palladium, the rhodium, and the silver. All of it." leaving the logistics problem of getting it into a Swiss bank with Tiger's name on it.

For the small investor there is sound advice:

- it is often dangerous to trade on statistical evidence unless it can be intuitively explained". "Visceral" is the word meaning deep inward feelings rather than just an intellectual focus.

- "The whole point of leverage, the very definition of the term, is that investors feel ripples of the economy in a magnified way."

- We all rationalize success. One position by the Chanos Fund only worked out because the April 1989 Tiananmen Square demonstration broke out. This earned the comment "The way Ah see it, is that it took a revolution of a bihl-lion people for your darn short to work out."

- "Event driven" investing at Farallon Fund specialized in predicting events that cause existing prices to be wrong e.g. takeover announcements, demergers, avoiding bankruptcy, meeting banking covenants, major economic events, hybrid security maturity dates etc.

- `Pattern investing' used by the Medallion fund looking for patterns in the market. This applies research on French/English translation where the computer finds the grammatical rules not the programmer (using the Canadian Hansard which is conveniently in both languages).

- A Tiger Fund manager "should manage the portfolio aggressively, removing good companies to make way for better ones; should avoid risking more than 5 percent of capital on more than one bet; and should keep swinging through bad times until luck returned".

- Remember that "...the market can stay irrational longer than you can stay solvent".

- "If one of these stocks fell ... it was probably being pushed by an institutional block trader that needed to raise cash...the price would soon revert, creating an opportunity to profit." In other words, why is the seller selling?

- "the biggest danger for buyers of illiquid assets is that in a crisis these assets will collapse the hardest."

- "...the larger an investment fund, the harder it was for a fund manager to generate returns" meaning the small investor has more opportunity.

- And remember, "LTCM calculated that this loss should have occurred less than once in the lifetime of the universe. But it happened anyway." The market does not follow a normal distribution; often it is not random; but then is it often predictable?

Mallaby grapples with the variety of thought behind the success of the hedge funds giving us a workmanlike insight. This attempt to describe how the hedge funds actually operate - as far as he is able (and he tells us when he cannot) - makes this a valuable book indeed.

Wonderful trading insight

If you have read books like "stock Market wizard" and still feel that you don't have good idea how those people made so much money, this book is for you. Initially, I thought this book was just another hedge fund book without much substance. However, the author beautifully explains the trading methodologies of these star traders(and also their misses)- I was blown away. The author's insight into trading, leverage/economic history is remarkable, and by the reference list it is clear that he has put enormous efforts into this book. Compare this book with other hedge funds books and you will soon see the difference. I think this book may soon become a classic. ... Read more

Editorial Review

NATIONAL BESTSELLER

“The Social Network, the much anticipated movie…adapted from Ben Mezrich’s book The Accidental Billionaires.” —The New York Times

Best friends Eduardo Saverin and Mark Zuckerberg had spent many lonely nights looking for a way to stand out among Harvard University’s elite, comptetitive, and accomplished  student body. Then, in 2003, Zuckerberg hacked into Harvard’s computers, crashed  the campus network, almost got himself  expelled, and was inspired to create Facebook, the social networking site that has since revolutionized communication around the world.
 
With Saverin’s funding their tiny start-up went from dorm room to Silicon Valley. But conflicting ideas about Facebook’s future transformed the friends into enemies. Soon, the undergraduate exuberance that marked their collaboration turned into out-and-out warfare as it fell prey to the adult world of venture capitalists, big money, lawyers.

Reviews

Tabloid Quality Dramatic Narrative
I read this book because I wanted to understand the history of Facebook--a program (a site, a lifestyle) that is changing society. The book's cover (a picture of a red, lacy bra and a couple of cocktail glasses) and subtitle (A Tale of Sex, Money, Genius and Betrayal) should have tipped me off that it was not going to be serious history. Mezrich writes the book in the style of dramatic narrative which apparently means "when I don't have facts, I'll just make 'em up and when the story gets slow, I'll fabricate a sex scene." He does provide lots of interesting facts and shares the rather brutal history of Facebook (from Mark Zuckerberg essentially stealing the idea from people who had asked him to create a very similar social media site to the backhanded way that he forced his co-founder out of the company). I suppose it is a tale of money, genius and betrayal, though I don't see how sex really enters into the true tale except as much as it would for any group of college students (except, of course, as a selling feature). So this is Mezrich's take on the story, written in a tabloid fashion where what is true and what could be true blend together. By his own admission, Mezrich did not speak to Zuckerberg at all and relied very heavily on Eduardo Saverin, a valuable though hardly objective source (seeing as he is the very co-founder who was removed from the company). The framework of the facts seems to line up with what I've read elsewhere but the very nature of the book makes it somewhat less than trustworthy. Still, if you want to know how Facebook came to be, how it evolved from a week's worth of work for a college student to a company valued in the billions dollars, this seems to be the only show in town. Even then, read Wikipedia first to see if it offers enough to satisfy your curiosity before plunking down the money for this book. Even at just $16.50 it's hard to believe that it's worth the money.

Great look behind the scenes of a revolution
Here is what you need to know about this book:

1. Is it an enjoyable read? YES. Read the book in about a day and a half and couldn't put it down at the end.

2. Is it an interesting story? YES. For the first time, I really felt that I was there (the "fly on the wall") as a whole idea unfolded from end-to-end, to become something that makes Microsoft and Google quiver in their boots.

3. Is it an interesting plot? YES. Its a real tragedy of friendship, greed, and power. It is a delightfully unexpected path woven together well by Mezrich.

I saw lot of reviews and reports about this story, and read it eyes-opened. Is this verbatim of what actually happened? Of course not, but do you really believe everything that gets written by Jenna Jameson or Marilyn Manson in their "true autobiographies". Is it clear enough that this is the way the main plot played out? -- to me there is little question.

So if you want to enjoy a good read, pick up this book. It you want to stock up on dry factoids, pick up an Encylopedia Brittanica -- I hear they are real cheap nowadays ;) ... Read more

Editorial Review

"A magisterial work...You can't help thinking about the economic crisis we're living through now." --The New York Times Book Review

It is commonly believed that the Great Depression that began in 1929 resulted from a confluence of events beyond any one person's or government's control. In fact, as Liaquat Ahamed reveals, it was the decisions made by a small number of central bankers that were the primary cause of that economic meltdown, the effects of which set the stage for World War II and reverberated for decades. As yet another period of economic turmoil makes headlines today, Lords of Finance is a potent reminder of the enormous impact that the decisions of central bankers can have, their fallibility, and the terrible human consequences that can result when they are wrong.

... Read more

Reviews

The Four Bankers of Apocalypse
Liaquat Ahamed, a former World Bank economist and investment fund manager, began research on this book long before the current financial crisis, having no idea of the relevance it would have upon its publication. It is a history of the financial and economic turmoil that began in 1914 and didn't really end until after World War II. He traces the development of this crisis through the lives and actions of four central bankers: Benjamin Strong of the Federal Reserve of New York, Montagu Norman of the Bank of England, Emile Morceau of the Banque de France, and Hjalmer Schacht of the Reichsbank of Germany. The liquidity crisis of 1914 has suddenly become a subject of interest as it bears relevance to today's problems.

Ahamed's central thesis is that the critical decisions made by these four bankers not only caused the Great Depression but also created the conditions for World War II. The most fateful event of all was the decision to adhere to the gold standard. In retrospect, tying the amount of currency a country has in circulation to the amount of gold it has in its vaults appears arbitrary and nonsensical. However, it seemed like a good idea at the time, it provided a universal standard against which countries could stablize their currencies. Unfortunately it became a straight jacket which gave them little room to maneuver.

When the big four bankers came into power in the mid-1920s, the use of the gold standard actually seemed to be working, currencies were stabalized and capital was once again flowing. The problem however was that there was not enough gold in existence to proide enough capital to finance world trade. According to Ahamed, this was the central flaw in the financial system that led to the Crash of 1929 and the subsequent Great Depression. Of course, the chain of events was more complicated than that and Ahamed recognizes the complexity. Each of the four bankers and their respective countries were pursuing their own agendas as opposed to trying to save the system as a whole, the gold standard was the proverbial straw that broke the camel's back.

Ahamed has written an interesting history of what otherwise would be a fairly dull story. It makes one think about flaws in the system - like sub-prime mortgages, derivatives and the excessive use of credit - and how things could have been different if they had been recognized earlier.

Central Banks in the First 40 years of the 20th Century
First, let me say that this is an extremely well written book. I was expecting to have to plow through the usual dreadful writing that finance and economics seems to generate. To my surprise I found a book that was crisp, clear, and interesting. Fun, in fact. Second, the author covers a period and a topic that is sadly neglected in most histories - the inter-war period, and especially the financial events that played a major role in the rise of Hitler and the origins of the Second World War.

The book is primarily the story of 4 Central Banks - those of the US, England, France, and Germany, and of the heads of those banks. The book actually covers a longer span than the inter-war period, it includes important information about the banks just prior to the First World War, their activities during the war, and extends into the Second World War. The lead-in is especially important, because it explains so much of what happened during the inter-war period.

The events are too complicated to review in detail, but the author explains them well and shows how the personalities of the Bankers as well as the politics of the times influenced events. Let us just say, mistakes were made.

My one quibble with the book is that the author is rather unsparing in his criticism of the bankers. Although this is somewhat justified, I ended up feeling sympathetic to at least the heads of the US Federal Reserve and the Governor of the Bank of England. Their primary fault was an inability to see beyond the conventional economic wisdom of the times. In point of fact, the only person who seemed to get it right during this time was Maynard Keynes. If we are to judge everyone against the standard of the most brilliant mind in their field, very very few of us are going to come out well.

The most important point the book makes is how factors other than purely economic issues play a role in making economic decisions, but how the consequences of those economic decisions then rebound onto the wider political history of the times. While the book deals with a different time and political landscape, the parallels to our own times are VERY frightening. The author does not emphasize the parallels, and the book was actually completed before many parallel events occurred. To my mind that just makes them more compelling.

Four Men Could Have Prevented the Depression: Hopefully, Treasury Secretary Geithner and Adviser Larry Summers Have Read It!
Lords of Finance is a gripping story with forgotten yet worthy characters and villains hidden inside the drama of The Great Crash and Depression. It is a lively and fascinating "event by event" look at the slow motion lead up to The Great Crash, and the four men that could have prevented the Depression.

Each thought they were pursuing a reasonable course (think prisoners dilemma), yet their tragic lack of vision and coordination doomed the world to a long and painful decade of decline.

This book will keep you up at night (probably afraid for what is left of your IRA, portfolio, or home value) reading to find out what has happened to these four men and how they continually missed opportunities.

In the end they were overtaken by their biases, rivalries, vacations and countries they represented: The United States, Britain, France and Germany.

Falling stock prices, falling international trade, falling prices, falling commodities, a rush to hold dollars, declining interest rates but lack of loan availability, decisions to save some politically connected banks but not others, and a lack of consensus on an answer, all make 1929 and 2009 have an eerie similarity?

Substitute a real estate bubble for fixed priced gold, reparations for sub prime, Treasury Secretary Henry Paulson for Treasury Secretary Paul Mellon, and the book reads like an echo of the slow motion days leading up to the Great Crash and the Depression that followed.

Lords of Finance
Liaquat Ahamad does a thorough and engaging job of describing the men and the factors that drove us towards the Great Depression. Its' scary to see that history is repeating itself as we see the collapse of the real estate and stock speculative bubbles.

Its' amazing to me that the factors that caused the Great Depression, from the actions of the Federal Reserve, the control of the banks in restricting the flow of money, and the inability of the President to control the actions of these groups is largely overlooked. The easy way is to blame President Hoover and give FDR credit for ending it, when the truth is far more complex and relevant today as we face a similar crisis

We have given the banks and Wall Street the freedom to take advantage of deregulation, and we are once again in a financial crisis. Only when you understand the past, can you prevent repeating it. Ahamad's book should be required reading for every Congressman and media member in the country. Only then, this crisis can be met head-on.

Massive Speculation leads to a Depression.Hoover got it right
The author of this book has done an excellent job in analyzing what the main cause of the Great Depression was.The crucial pages in the book that provide the answer are pp.295-302.It is here that we find Benjamin Strong,in August of 1927, who knew full well that the United States was in the midst of not one ,but two raging, speculative bubbles,one in stocks and the other in real estate,forced through a one half of one percent rate cut that simply fueled the specultive bubbles even further.We find Herbert Hoover,blamed for the Great Depression in the United States,calling the future outcome one hundred percent correctly when he stated that the speculation of the late 1920's would lead to a Depression unless the banker financed speculative build up was stopped.Hoover's attempt to stop the insane rate cut failed.President Coolidge simply pointed out that there was nothing he could do because the Federal Reserve System was independent of the Federal Government.He stated that he had no authority to attempt to get the FRS to reverse the rate cut ,which they eventually did in February ,1928.
Unfortunately,by that time that action was too little and too late.Only a policy of credit restriction applied against speculators might have mitigated the eventual depression.

I highly recommend the book.It puts to rest once and for all the canard ,repeatedly told by Murray Rothbard and Milton Friedman,that the FRS was part of the Federal Government and was controlled by government bureaucrats who told the bankers what to do.It is just the reverse.The bankers were so powerful that they could tell an American president what to do.It is interesting to realize that the bankers have again brought the United States to the edge of financial catastrophe with their highly speculative loan policies

The Mistakes Men Make
How did the world plunge into the financial crisis of 1929-1933 and are we likely to follow that dismal path today? To probe this question, Liaquat Ahmaed, a professional investment manager, has written an absolutely absorbing economic history. He focuses on the principal players ("The Lords of Finance") in the financial world of the 1920's and 1930's, the central bankers of the United States, Britain, France and Germany. They were regarded at the time as members of the world's most exclusive club. Forgotten men today (and all were men,) Montagu Norman (the U.K.), Benjamin Strong (the U.S.), Hjalmar Schacht (Germany) and Emile Moreau (France) struggled with how to deal with the enormous reparation payments due from Germany under The Versailles Treaty, the likewise huge war debts owned by the victorious powers to the United States, and when to return to the gold standard, which had been abandoned during the war.
These financial titans were "the best and the brightest" of their times and they made error after error in dealing with these problems. As Ahmaed writes, they were a "group of men who understood none of this [the Crash of 1929], whose ideas about the economy were at best outmoded and at worst plain wrong." Germany could never realistically repay its reparations debt. Similarly, Britain and France could never pay back the U.S. for money borrowed during the war. (Of all the allied powers, only Finland finally paid of its World War One debt.) Returning to the gold standard was a huge mistake. Among economists, only Britain's Maynard Keynes realized that the gold standard would hamstring economic growth. (Of course Keynes also realized the futility of reparation payments in his famous book, The Economic Consequences of the Peace.) When the financial crisis struck, none of the central banks adequately played the role of "lender of last resort." While under Roosevelt the Federal Reserve was reformed and the U.S. government took an activist role in the economy, it was a case of too little, too late.
By focusing on the lives of these key bankers, each of who was idiosyncratic, Mr. Ahmaed has produced a fascinating volume, full of interesting personalities (Bernard Barauch, Winston Churchill, Herbert Hoover and Dean Acheson, to name a few). Ahmaed speculates that had Benjamin Strong (head of the New York Fed) not died in 1928, there might have been a figure strong enough to pull together the central bankers for a concerted attack on the financial crisis. (It is also scary to consider that our central bankers today are "the best and the brightest" and may also be making terrible but different mistakes, blinded as they are by the orthodoxy of today's economic thinking.)
Ahmaed writes with grace and style. It is a wonderful achievement for a man who apparently is new to the writing of history. He also explains the mysteries of international finance, gold reserves and currency fluctuations in terms anybody can grasp. For an understanding of the financial climate that led to The Great Depression, and for pure entertainment, The Lords of Finance is highly recommended.

A Masterpiece
Mr. Ahamed has written a wonderful book on both the financiers who dominated money policy in the period between the two world wars and the economic history of that period. Mr. Ahamed writes very clearly and well about both the bankers and the period. His writing is also as vivid and interesting as it is clear. And Mr. Ahamed's writing imparts a extremely vast amount of detail and information on the economics of the 1920s and the Great Depression. He has provided an extensive list of references along with a vast amount of footnotes. Mr. Ahamed's work is history and economic history at its best.

Among the major gems of information provided by Mr. Ahamed is the baneful effect of the gold standard between the world wars. As other economists such as Peter Temin have indicated, each economy began to recover from the Great Depression when the economy left the gold standard almost invariably. Mr. Ahamed demonstrates the absurdity of Montagu Norman's policy of restoring the British pound to its pre World War I value in gold.

Mr. Ahamed also demonstrates how World War I drastically changed economic conditions so that the British led prewar gold standard was an impossibility. He also demonstrates the pernicious and poisonous effect of the reparations imposed on the former Central Powers by the Treaty of Versailles. These reparations gravely hindered international cooperation. And Mr. Ahamed makes evident that the central bankers have a colossal impact on the economy and the lives of individuals all over the world.

This book is a must read for all Americans, particularly those who have studied economics.

Spellbinding tale of world finance leading to the Great Depression
This book tells the story of Western European and American international finance between the First World War War and the Great Depression. Ahamed focuses upon the most important central bankers of Britain, America, France and Germany, as well as on John Maynard Keynes. The book is a collective biography of the five individuals, a history of Western finance in the 1920s and an argument about the causes of the Great Depression.

The book reads well. Ahamed gives detailed stories about very important events, about which I knew very little. He describes the people involved and their motivations. He makes the whole bygone era come alive again.

But it is not just a good read; it is an important, and unjustly neglected, subject. If you ask, what caused the Great Depression, you tend to get dropped immediately into a vast and contentious literature that mostly focuses on economic theory. Economic theory, of almost all perspectives, tends to approach its subject, as if is unrelated to time or to place. We are discussing "the economy", not the particular economy of Germany in the early 1920s or whatever it might be.

This ahistorical approach tends to lump situations together, which do not belong together, and to neglect facts which are of obvious importance, once you think about them. In the case of the Great Depression, there is a critical historical context, which Ahamed stresses. Before World War One, Great Britain was the dominant financial power of the world. It maintained its system through the old-fashioned gold standard. The gold standard created monetary discipline and restraint by tying the amount of currency which any nation could issue to the amount of gold which it had. Those with gold could issue more currency and enjoy a rising standard of living; those without gold had to issue little currency and were forced to work hard to make do with less. The system, in theory, was self-adjusting. As a nation got a lot of gold, its currency increased, which drove up its prices. As its prices went higher, that nation attracted imports but had trouble exporting, which caused it to lose gold.

It all sounded good, and there are those, even today, who wish we would go back onto the gold standard. But, as Ahamed makes clear, the gold standard died in 1914, when the Great War started. The war was so absurdly expensive that it forced every European power off of gold. It also forced every European power to borrow massively, and to print so much currency that there were greater or lesser amounts of inflation all over Europe.

European leaders mostly believed that, once the war was over, they could restore the pre-1914 world. They tried to do so for many years, but they were never successful. The war resulted in a decisive shift in financial and economic power from Britain to America. Britain and France borrowed huge sums from America, to finance the war. They tried to get these debts repaid, by imposing on Germany the obligation to pay equally vast sums in reparations.

In retrospect, it is obvious that the war-torn nations of Europe could neither pay their debts to America nor reparations from Germany to the Western allies. The obvious solution was that America forgive the debts to the Western allies, on condition that they forgive the reparations from Germany.

America did not do that. It insisted on payment by France and Britain, which, in turn, insisted on payment by Germany. All of these nations were gravely weakened by an impossible debt load.

And, on top of that, America had most of the world's gold. This made it impossible for the world to go back on the gold standard, since no one had gold except America. America said that it was going back on the gold standard, except that it did not, at least not in the old way. With so much gold, under the old rules, America should have issued a vast amount of currency, which would have driven up American prices, encouraged imports from Europe and thus allowed Europe to get back on its feet.

Except we didn't follow the old rules. Faced with a vast amount of gold, the Federal Reserve "sterilized" most of it. In other words, we got the gold, but we issued no currency backed by it. Fearing inflation, we simply took the gold and buried it. While we used the old name of the gold standard, the old rules were torn up and replaced with illogic. Europe had little gold, so its currency could not expand. America had lots and lots of gold, but we refused to use either it to expand our currency or to help European recovery.

This made the global system of finance hopelessly unstable. Germany made things worse by running the printing press to solve its problems, and bringing on hyperinflation. Britain made things worse, by going back on the gold standard, at the old rate and acting as if it were still an economic super-power, when it simply did not have the money to sustain the role any more. France was consumed by hatred and fear of Germany, which lead it to play a very irresponsble role in the whole drama. Ultimately, it all blew up, lead to the Second World War, after which the US got it right, with the Marshall Plan and the Bretton Woods agreement.

Ahamed tells this whole story very well. Anyone interested in the Great Depression should know this story. The best way to get to know this story is to read this book.

Twentieth Century Nightmare
I bought this book expecting (and dreading) a boring technical tome on banking (a subject that I find intriguing but difficult). To my delight it was not boring. On the contrary it is an exciting and riveting book, from cover to cover. It goes very far to explain the twentieth century. I am afraid that the title will turn people away. It should have a title more like "The Twentieth Century Nightmare." ... Read more

Editorial Review

With new material from the author

"Economic hit men," John Perkins writes," are highly paid professionals who cheat countries around the globe out of trillions of dollars. Their tools include fraudulent financial reports, rigged elections, payoffs, extortion, sex, and murder. They play a game as old as Empire but one that has taken on terrifying dimensions during this time of globalization." John Perkins should know-he was an economic hit man for an international consulting firm that worked to convince developing countries to accept enormous loans and to funnel that money to U.S. corporations. Once these countries were saddled with huge debts, the American government and international aid agencies were able to request their "pound of flesh" in favors, including access to natural resources, military cooperation, and political support. Confessions of an Economic Hit Man is the story of one man's experiences inside the intrigue, greed, corruption and little-known government and corporate activities that America has been involved in since World War II, and which have dire consequences for the future of democracy and the world. ... Read more

Reviews

No proof required
Many of the reviews here refute the truthfulness of this book because Perkins does not provide evidence for every one of his claims. But, this is precisely what makes the book an exciting and fast read. How can Perkins be expected to provide evidence for influencing events in other countries? Where should we expect to find documentation of these nefarious deeds? The inner workings of organizations like MAIN, Halliburtion, and Brown & Root are only ever known when a dissenter arises.

From my perspective, it all seems to add up. I lived in Ecuador in the 80s. I was young (18), and I didn't know much about politics at the time. I personally saw many of the projects that Perkins speaks of in this book. I heard the complaints from my Ecuadorian friends about how the U.S. was bankrupting their economy by "loaning" money for extensive construction projects. I saw the jungle along Rio Napo being deforested by unknown (to me) companies. I spent time in oil towns in the jungle -- like Shell. I saw the dam that Perkins speaks of in his book.

The only way to gather proof about the truthfulness of his claims is to see it first hand. Though I seriously doubt that most of us have the guts to travel to the places where these things happen. Denial, regarding these issues, seems terribly naive.

For History look elsewhere, for a sound, engaging critique read it.
John Perkins was interviewed by Leonard Lopate on WNYC Radio in New York. You can listen to the interview and make your own decision about John's book.

http://www.wnyc.org/shows/lopate/episodes/11082004

Note: Although many other books have been written about how U.S. aid policy has been used as a means of manipulating foreign countries, the fact remains that John Perkin's book is from an insiders perspective. It exposes the truth behind how corporate greed has hijacked U.S. Foreign Policy. You can find many more books on the facts and history but for a sound, engaging critique read it.

The personal illuminates the global
It is often the personal stories that tell the bigger truths. As with Barbara Ehrenreich's intensely personal Nickel and Dimed, Perkins' story illuminates a larger picture in a way that more scholarly treatises cannot match. I value the perspective I get from Noam Chomsky and Chalmers Johnson and many others who have written about our modern empire. None of these works, though, explains it from the ground up. Perkins does that.

In this book, written in spurts since the early 1980s, Perkins really does tell it like it is. This is the book I have been waiting for, the book that fills in the blanks left behind by the writers of global theories, the book that tells us how it really happens. It is one thing to read that the United States engineered ousters of democratically-elected leaders who did not do the bidding of our corporations. It is another to read of the actual steps that led to these actions. As one who likes to be able to visualize all the steps, I found great comfort in reading a well-written personal story that allows me to do this.

In this rightly-named confession, Perkins puts on his hair shirt and chastises himself as he explains how he gave in to temptation again and again over several decades, while he worked to build an American corporation's profits at the expense of third-world countries. He does not describe in detail the benefits he accrued from being Satan's handyman. We do not hear stories of his exploits with women, of his flaunting his power, the meat of a LifeTime movie. These fruits of his labor are glossed over in favor of greater descriptions of the occasional pangs of conscience.

Take it as a given, then, that Perkins was right for the job of economic hit man because he was so easily tempted by material wealth, power, and adulation. There was, in his character, though, a little hint of conscience. He was interested in the world's people, happy to learn other languages and ways of living, open to old as well as new ideas. Thus he was able to make a more honest comparison of the world according to global corporations and the world as seen and lived by indigenous people. And he was able to see that his work only benefitted the few. There was in him, as well, the radical view that a benefit to the few was not much of a benefit.

I can see this story translated successfully to the big screen; either as a documentary or as the story of one man. Two very different films; either would be dramatic and informative. There are scenes in this book that could have come from a Graham Greene novel (and let's not forget that Greene tells the truth through fiction): clandestine meetings, sudden flights to escape uprisings, epiphanies on the beach. By its nature, a memoir of this type cannot fully be documented. To the extent that it could be, it is, with many pages of notes and references. These private memories, though, may never be proven to be either true or false.

It is my greatest wish that Perkins is telling the whole truth all the way through. Even the smallest of fibs could tarnish a work of great importance, given our media's inability to see bigger pictures.

The real message, though, is clearly written and inescapable: this is not the story of "they", a "they" that can simply be removed from power. It is the story of us.

Well Done expose on USA international subterfuge
I was intrigued by this book inasmuch as I worked in the international export field for several major American corporations. I had the benefit of traveling to most of the countries that were discussed in Perkin's book. Also, I was stationed in the Panama Canal Zone with the US Army in the early 1960's. In addition, I was born in Central America, and my father worked for the infamous United Fruit Company. To say the least, I agree with Mr. Perkins in most of his expose. Export products that I shipped overseas were often financed by USAID, WorldBank, or some other international lending agency. And of course, the USA was the prime funder of these organizations. Eventually, I was sent into some of these third world countries, and I was exposed to the working class as well as to the upper crust of these societies. If you had to get to the nitty-gritty of this tale, you would have to think about Darwin's theory of "Survival of the Fittest." Ultimately, the USA will throw its weight around as long as it has the military muscle to do so. Unfortunately, history tells us that all world empires collapse, and the USA will follow that trend lend. There are no exceptions to this as history has recorded thus far. Surely, there must be a better way for capitalism to thrive, and the USA even with good intentions is like an elephant in a china shop. In all my years of growing up in America, I found that most Americans know so very little about their external world outside of their own country. While most Americans think of themselves as the "good guys in the white hat," Perkins book will dispel that notion. And, rightfully so!

American Centurion comes clean; sets example for us all
I got Confessions of an Economic Hit Man yesterday and finished reading it today. It's a vital personal story that illuminates an entire global system. A system based on greed, power, and control. Others before Perkins have warned of this system, but usually not from an insider's perspective. If you're interested in more details David Korten has done the best job documenting how rich powerful corporations with the help of governments get richer at the expense of the poor who get poorer. This isn't a new idea. But in today's world, the major media refuse to report this story. Perkins understands the essence of the problem: empire, oppression, inequality, and greed can seem to bring benefits to some people in the short term ... but in the long term we all loose, even the rich. We are all spiritually harmed by the lies and rationalizations. We are all put at risk when the world becomes more polarized into haves and have-nots. Our humanity is undermined when we benefit from that which hurts others. Undoubtedly most perpetrators have convinced themselves that what they do is OK and even that they'll be able to avoid consequences. Their money and power will insulate them in their exclusive gated communities. John Perkins' real feat in this book is not exposing a corrupt system, but in providing an example of one person who was able to look into his life with a deep honesty and realize it was hurting him as well as prospects for the future of all people. All of us can learn from his awakening. Does driving a big SUV make us more secure? Happier? A better person? A better citizen?

Excellent balance between personal story and history
This book is at once an autobiography, a 20th century history of America and a call to action. These elements are balanced very well with a very readable narrative style.

The history in this book is somewhat controversial. It is the less-shiny aspects of history which may or may not be taught in US schools (I will not make assumptions here), but which is easily accessible if one only looks for it. It is also quite well-documented and supported by evidence. Perkins discusses American corporate and governmental involvement with Saudi Arabia, Indonesia, Nicaragua, Panama, Ecuador and many other nations from a first hand perspective.

What is interesting is that we see this history as the setting for a very personal story, through the eyes of a participant. As the title suggests, it is in fact a confession. Perkins was an important player in some of the darker aspects of subtle non-governmental foreign policy, and he is not an apologist.

He shows a little bit of the psychology of people who commit evil acts on behalf of organizations to which they belong. For example, structures set up to do harm can generally find people with the personality characteristics that can be capitalized upon - greed, ambition, etc. What this means is, rather than simply provoking hate towards individuals who are perpetuating exploitation, Perkins reveals the underlying broader issues, such as the consequences of the misuse of power and profit. I think he very effectively places the specifics of historical facts (as well as his story) in context in a way that historical texts typically do not.

Although it is not a prescriptive book as such, Perkins does offer some ideas and suggestions at the end as to what individuals can do if they believe in trying to ameliorate the situation he has presented.

I found it to be both a compelling page turner and very factual at the same time. Highly recommended for the history buff, social activist, avid biography reader, news junkie, or really anyone who cares about the world we live in.

~a global transformation~
Confessions of An Economic Hit Man is one insiders view of how the global empire has successfully created itself to keep the cycle of U.S. wealth, self serving. John Perkins has found the courage to share this dark past in hopes that it is not too late for us to change our dreams and re-shape with immediacy the future of this planet.

Those who express disdain or lack of evidence of this greedy global game have clearly missed the point.

John Perkins offers the reader an informative and enticing journey through the shifty ways of economic and political manipulation. Caught within the web himself, this book clearly calls attention to our individual responsibilities in our daily actions, no matter what we do or where we live.

What I find so courageous about this book is John Perkins had clearly shape shifted himself away from the greedy world of EHMs into a life of helping indigenous peoples in the world: specifically the Shuar of the Amazon. In unveiling these hidden dark truths, he is now fully owning his past actions. It is with this level of accountability that we are able to create new openings for global transformation. Read his other books. You may understand what he speaks of in a different depth.

This book is about changing our dreams. It is a wake up call to change our intentions. It is deeply concerned for the future. Simply put...it is about caring for the world's children, every one of them, today.

Spell binding and insightful
If you care what happens to our world read this groundbreaking book. John Perkins tells, as only an insider can, the truths about our goverment system. His courage and insight is truely heroic. ... Read more

Editorial Review

Dig deep and you will find the most compelling argument for working together: Happiness.

In business there are always unique individual achievers, but pull down the veil and you'll often find someone alongside them. Michael Eisner does just that in Working Together. Using his own collaboration with Frank Wells at Disney as a launching point for examining other famously successful partnerships, Eisner offers us an intimate and deeply personal look at some of the most rewarding business partnerships, uncovering what makes them tick and offering unconventional wisdom and unexpected insights. In this essential book for businesspeople everywhere, Eisner shines a light on these startlingly long-lasting and enriching partnerships, weaving together ten separate narratives—from investment gurus to entertainment impresarios, from fashion designers to big-box retailers—into a larger story about the true nature of achievement in life and in business.

Ten Stories, Ten Magical Partnerships:

Michael D. Eisner and Frank Wells (Disney)
Warren Buffett and Charlie Munger (Berkshire Hathaway)
Bill and Melinda Gates (The Gates Foundation)
Brian Grazer and Ron Howard (Imagine Entertainment)
Valentino and Giancarlo Giammetti (Valentino)
Ian Schrager and Steve Rubell (Studio 54)
Arthur Blank and Bernie Marcus (The Home Depot)
Susan Feniger and Mary Sue Milliken (restaurateurs)
Joe Torre and Don Zimmer (New York Yankees)
John Angelo and Michael Gordon (finance)

Collectively, the stories you're about to read form a blueprint for building partnerships that matter, that last, and that allow each of us to do our very best work.

Reviews

Good read, December 1, 2010
Picked it for my self and my partner. This book is truly motivating as it highlights the need of good, reliable partners to succeed in today complex business environment.

A Great Read, September 20, 2010
Great questions from Eisner made great answers from extremely interesting partners. A great read!(I even bought the book for my two grown children!)

Eisner's Ego, September 21, 2010
What type of personality writes a book about the business of successful business partnerships and infuses it with their own in a separate chapter and kings himself the top of the heap? What is also amazing about this book is that Eisner declares that his business partnership was due to Frank Wells being a "YES MAN" to Eisner. Furthermore, if Eisner wants to pretend he is an author, and mix himself with great company, then why does Eisner needs the help of a real author to write a book like this? Pompousness, arrogance and selfishness are clearly Eisner's traits as he has turned his life into one that consumes the lives of others while hiding behind the creative work and talents of other people. From Conversations With Michael Eisner on TV and now a book like this, Michael D. Eisner has also proven that he obsessed with generating his own self importance for his nonstop ballooning ego, including by having his friends bestow awards to him, and naming buildings after himself. Gee I wonder how many months before Eisner gets his own created Disney Legend Award.. PS: Hey remember Mike, you didn't create Walt Disney nor was it a business that had no value. ... Read more

Editorial Review

IN LITTLE MORE THAN HALF A DECADE, Facebook has gone from a dorm-room novelty to a company with 500 million users. It is one of the fastest growing companies in history, an essential part of the social life not only of teenagers but hundreds of millions of adults worldwide. As Facebook spreads around the globe, it creates surprising effects—even becoming instrumental in political protests from Colombia to Iran.

Veteran technology reporter David Kirkpatrick had the full cooperation of Facebook’s key executives in researching this fascinating history of the company and its impact on our lives. Kirkpatrick tells us how Facebook was created, why it has flourished, and where it is going next. He chronicles its successes and missteps, and gives readers the most complete assessment anywhere of founder and CEO Mark Zuckerberg, the central figure in the company’s remarkable ascent. This is the Facebook story that can be found nowhere else.

How did a nineteen-year-old Harvard student create a company that has transformed the Internet and how did he grow it to its current enormous size? Kirkpatrick shows how Zuckerberg steadfastly refused to compromise his vision, insistently focusing on growth over profits and preaching that Facebook must dominate (his word) communication on the Internet. In the process, he and a small group of key executives have created a company that has changed social life in the United States and elsewhere, a company that has become a ubiquitous presence in marketing, altering politics, business, and even our sense of our own identity. This is the Facebook Effect. ... Read more

Reviews

Incredibly Insightful Account of the True Facebook Story
I've just finished reading The Facebook Effect, and it was like a movie I didn't want to end. I'm considering reading it again. As a budding internet startup entrepreneur, learning from major successes, such as Facebook, is incredibly valuable. The problem is, where can you learn about the juicy details that essentially positioned a company like Facebook to be so ubiquitous? Details such as:

- how Facebook gained so much traffic early on
- how they scaled the site school by school
- the major decisions Mark and his team grappled with at every stage
- the strategy and thought process that went through Zuckerberg's mind
- how they raised their first dollar of investment
- what sort of information did they pitch their first professional investors
- etc...

It includes everything that an internet startup entrepreneur would want to know, encapsulated in one of the world's most fascinating phenomenon -- The Facebook Effect.

Enjoy.

Engaging read
Kirkpatrick was for years one of Fortune's best writers, and that talent is on full display here. He assesses the often broad and complex situations around facebook deftly, in accessible and subtle ways. But it's when he lets his interview subjects speak in their own words -- from founder to current and past executives to investors -- that the book really shines. It's better than a good book, it's an important book.

Get affected (yes its the right affect; is effect ever a verb?)
It's hard to comprehend an internet user who hasn't heard of Facebook, sure there are many out there who don't feel the need to use the application, and some who stubbornly resist signing up for various reasons (usually privacy fears or strange phobias of their friendships being somehow changed irreparably by the experience) but the chances are that if you've logged onto the World Wide Web you're familiar with the phenomenon known as Facebook.

In this work, Kirkpatrick takes us through a candid journey with Mark Zuckerberg, the brains behind the whole thing. It's a surprising journey in many ways, for one thing - compared to other `phenomenon' entrepreneurial tales, Facebook's is quite short, spanning barely more than half a decade. Despite this, there is more than enough material for a full non-fiction book, (and a feature length film.)

Most of the information for The Facebook Effect is straight from Zuckerberg himself, who like his creation, is open to sharing details of his personal and professional life with anyone who cares to see them. That is except for the specific details of a few lawsuits brought against Zuckerberg for theft of ideas - which unfortunately for us curious readers, were settled with confidentiality agreements meaning we'll likely never know the exact details of what went down behind closed doors.

The Facebook Effect, is really a story of delirious success, both financial and world changing. Even for those not so keen on geekery and computers, the political wrangling of the company supplies plenty of drama. For those heavily into Facebook, or at least who have been keeping up with the web app's changes over the past few years, you'll enjoy reading about the developments you've already experienced from the side of the developers - in particular I loved the irony when the `newsfeed' was added it allowed users easy access to groups they might want to join, which promptly lead to mass numbers joining anti-newsfeed groups.

Love it or leave it, Facebook has done what Zuckerberg intended it to - it has changed the way we conduct our social relationships - and thus changed society itself. Employees, employers and public figures are re-evaluating how they manage their very public profiles on Facebook, with some pundits predicting that rather than people tending towards circumspect and professional Facebook profiles, society will just come to accept that Facebook will reveal certain aspects of our lives that we don't necessarily want public, and not judge too harshly. Even if you don't have a profile yourself, there is no way you can prevent others from posting photos of you, or revealing personal information about yourself (although one might question why said acquaintance is doing so) so perhaps a society that doesn't judge our drunken photos too harshly is more preferable to trying desperately to keep such things from the internet.

My only real criticism of this book is it left me wishing that I had a college friend on the verge of creating a billion dollar company who just needed a small amount of investment to get started - and that I got to be one of those lucky fools who gave thousands only to have the investment return in the millions...

Fantastic
The book is an amazing read. If you know anything about Facebook and are curious about how technology is evolving the world, you won't be able to put it down. It includes the backstory and all the drama of how Facebook grew from nothing to the newest world changing company of Silicon Valley. It has all the incredible details that you will never see anywhere else. and you feel like you are there and rooting for the heros.

Fast and interesting read
After seeing "The Social Network" I wanted to learn more about the story of Facebook. This book is an amazing commentary on the quirky nature of Mark Zuckerburg, the inter-workings of venture capitalism, and the tech behind the site itself. Sometimes non-fiction books can get dry and boring, but this book kept me intrigued.

Intelligent, Insightful and Enjoyable
I originally purchased this book because I thought it was required reading for someone like me who works in Silicon Valley. However, after a few chapters, I realized this could be one of the top ten business books of the decade and...it was fun to read.
Here is why I found it so enlightening:

-The book was filled with anecdotal stories of incredible financial and business growth challenges, potential technology disasters and public opinion/communication crises--that for the most, were handled swiftly and successfully. Valuable lessons learned were scattered throughout the book, cover to cover. The author made you feel like you were part of the team taking the company through its first five years of phenomenal growth.

-Mark Zuckerberg. You will learn about one of the most visionary CEOs of our time by the way he handled the above mentioned situations, his passion for transparency, philosophy on the "gift economy" and vision of global communication and via a number of direct quotes that the author chose to include (and noted below):

"The best thing we can do is to move smoothly with the world around us, and to have constant competition, not build walls."(commenting on the possible integration of Facebook across the Web)

"We're a vehicle that gives people the power to share information, so we are driving that trend. We also have to live by it." (commenting on user backlash and potential government intervention)

-Finally leveraging social media as a global communications platform; the book contains a bevy of inspirational examples of the potential for positive change--a glimpse into the future, that we should all be aware of.

Excellent
Easily one of the best books I have read this year. A page turner that will give you a more positive view of Zuckerberg versus what the movie portrays of him. Read the book and you will enjoy the movie even more.

A Must Have to Really Understand Facebook.
"Every person under 40 knows Facebook and every person has heard of it. The Facebook Effect is for those of us who have barely heard of it and it takes the Facebook story from the 19 year olds in a Harvard dormitory room to Facebook's social website and business media number one role in the universe. Is a Twitter book next?"

Great Reading
This is a very good book on how facebook was created and became the giant it is today. It is a fast ready and enjoyable. I would recommend it to anyone who's interested in learning the history of facebook! ... Read more

Editorial Review

If talent is the leading indicator of whether a business is up or down, a success or a failure (and it is) . . . do you know how to accurately judge raw human talent? Understand a person's unique combination of traits? Develop that talent? Convert what supposedly are "soft" subjective judgments about people into objective criteria that are as specific, verifiable, and concrete as the contents of a financial statement?
     The talent masters do. They put people before numbers for the simple reason that it is talent that delivers the numbers. Success comes from those who are able to extract meaning from events and the forces affecting a business, and are able to look at the world and assess the risks to take and the risks to avoid.
     The Talent Masters itself stems from a unique combination of talent: During a forty-year career at General Electric, Bill Conaty worked closely with CEOs Jack Welch and Jeff Immelt to build that company's worldrenowned talent machine. Ram Charan is the legendary advisor to companies around the world. Together they use their unparalleled experience and insight to write the definitive book on talent—a breakthrough in how to take a business to the next level:

• Secrets of the masters. The specifics on how companies regarded as world-class—GE, P&G, Hindustan Unilever (and others)—base their stellar performance decade after decade on their systems for finding and nurturing leadership talent.
• Intimate and systemic. Why deep knowledge and intimacy with your talent and a systemic rhythm of reviews are the foundation for creating a steady, selfrenewing stream of leaders for all levels of an organization—from first-line supervisors to the CEO.
• The competency that lasts. Financial results, market share, brand, and legacy products all have a half-life that seems to grow shorter by the year. Talent is the only competency that endures.
• What to do Monday morning. The Talent Masters tool kit provides the specific guidelines for assessing and improving your company’s talent mastery capabilities. ... Read more

Reviews

Observing Talent, Making Judgments About It...And Figuring Out How to Unleash It!, November 14, 2010
Business has gotten a whole lot tougher in the past decade with globalization, regulation, geopolitics, and, most recently, the failure of the global financial system. Sustainability and survival of an organization depend more than ever on the recruitment, development, and retention of its human capital.

In my work, medical device start-ups, it has been well understood for years that there are three keys to success - management, management, and management. Leadership talent has been and will continue to be the differentiator in maximizing the commercial success of an unproven technology and the creation of value.

In "Talent Masters: Why Smart Leaders Put People Before Numbers," authors Ram Charan and Bill Connaty show how a few large and mostly mature companies - some with experience over many years and some newcomers - have "embedded in their culture the habits of observing talent, making judgments about it, and figuring out how to UNLEASH IT." Companies highlighted include General Electric, Proctor & Gamble, Hindustin, Goodyear, UniCredit, the Texas Pacific Group. They fully appreciate that talent is required for value creation and good numbers.

These companies "analyze talent, understand it, shape it, and build in through a combination of disciplined routines and processes, and something even rarer and harder to observe from outside: a collective expertise, honed with continuous improvement in recognizing and developing talent. These companies have disproved the myth that the judgment of human potential is a "soft" art."

Charan and Conaty have organized the book into three sections:

* First, an insider's look into GE's much admired talent management system and why it works. The authors each have 40+ years of experience with GE - Charan as an outside consultant, and Conaty as an executive insider.
* Second, a look into a wide range of approaches by Talent Masters from a number of other companies.
* The third and last section show the application of talent master by companies who have entered the "talent growth" game recently.

A weakness I have observed here in Silicon Valley with many medtech executives is a reluctance to "stretch" talent. This goes against my training at American Hospital Supply Corporation (now Baxter) where "talent" was stretched over and over again. (I served as a Director of International with 11 operations at the age of 28, and as a Division President at age 32). AHSC, a pioneering talent master, left a legacy by producing many of the health care executives that led the industry over the past thirty years.

Charan and Conaty note that Talent Masters place "stretch" bets for three good reasons.
1. People facing stretch situations are not likely to be overconfident and are eager to learn more from others.
2. Stretching people helps to retain talented people who are itching to advance and may look to greener pastures if they do not get a chance.
3. Successful stretches attract better candidates in the future because ambitious and capable people will know that they won't have to wait for slots to open.

"Talent Masters" turns managerial succession upside down - "Rather than finding people to fill positions, this approach puts the emphasis on opening paths for leaders to grow their talents and become ever more capable."

"Talent Masters" is a good "how to" book for those company executives who are seriously focused on increasing the bandwidth of their "talent pool," want to retain the high potentials they have, and want to recruit top talent in an ever competitive environment.

Talent: At the Heart of Future Success, November 11, 2010
Having read Noel Tichy's take on this subject based on his unique experience at GE, I was eager to read this book. And, I confess to being a big fan of Ram Charan as I am of Tichy. I wasn't disappointed as the authors share not only ways some successful companies identify talent but also the processes they use for growing that talent.

I have always believed that the first responsibility of presidents or CEOs of for-profit and non-profit organizations is to develop future leaders from within yet too few companies know how to do it well in my judgment. This book will help younger and older managers and executives improve how they do it. I only wish the authors had shared the secrets from additional organizations that are also committed to leadership development.

I have the privilege of working with some of the country's top business leaders--presidents, CEOs, CFOs and other senior executives. Some of them head or have headed large firms yet others have led smaller firms. In every case, though, they are constantly looking for ways to reach out to their managers and staffs to enable them to prosper in their careers. I think of Amgen, Steelcase, Chelsea Milling (Jiffy Mix!), San Francisco Giants Baseball Club, Southwest Airlines, the University of Michigan, Abbott Laboratories, Limoneira, Sage Publications and others.

Hats off to Bill Conaty and Ram Charan for their enormous contribution to this vital arena where much more learning is required if America is to regain its leadership position in the business world. This is a superb book, one to read and then use again and again.

Ritch K. Eich, Ph.D.
President
Eich Associated

Insightful and Practical, November 19, 2010
The Talent Masters provides an excellent insiders view into how the best companies manage talent. What's illuminating is just how ingrained and deliberate the principles and practices of managing talent are in the featured companies (GE, P&G, Novartis ) Nothing is left to chance. Everyone talks about how GE manages talent so it's interesting to hear just how straightforward some of the processes are, albeit underpinned by disciplined execution and absolute leadership commitment. It seems that so many companies today are getting caught up and perhaps distracted by technology. They put their talent management processes online to increase efficiency but often fall short on effectiveness. This book focuses squarely on effectiveness. It's a must read for any HR/Talent Management professionals and is equally valuable to line leaders and executives seeking to think more strategically about the age old challenge of ensuring that they have the right people in the right roles at the right time to execute business strategy and deliver results. The Talent Mastery tool kit at the end of the book provides practical tools that can be adopted and put to use in any company.

Garrett Sheridan,
Managing Partner
Axiom Consulting Partners

How to develop "robust talent pipelines and same-day succession plans", November 19, 2010

I agree with Bill Conaty and Ram Charan that Steve Jobs is the archetypical "talent master." Few others possess his combination of intelligence, temperament, energy, and determination (indeed tenacity) when the objective is to sustain generation of what Jobs characterizes as "insanely great ideas," then dominate markets with the products those ideas suggest.

However, all of us can be "more like Steve" if we are willing to become more astute in terms of (a) identifying a person's talent more precisely than can most other people by observing and listening; (b) strengthen our abilities through constant and intense practice; (c) make better judgments by mastering what Roger Martin characterizes as "integrative thinking" (i.e. "the predisposition and the capacity to hold two [or more] diametrically opposed ideas" in his head and then "without panicking or simply settling for one alternative or the other" to "produce a synthesis that is superior to either opposing idea"; and master, also, their people skills when involved in various social processes and interactions.

Whereas Steve Jobs is the archetypical "talent master," General Electric is the archetypical "talent master" organization. "When a valued leader does leave the fold - even one who may seem indispensable at the moment - the people in charge know what to do. They understand the business, know the candidates' strengths and development needs [not weaknesses], and are well prepared to fill the slot with the right match quickly - even in a matter of hours. The goal is clear: no pause, no time for people to commiserate, no laxity in decision making, and no opportunity for the competition to poach talent."

Conaty and Charan offer a case in point. "When Larry Johnston resigned [to become CEO of Albertson's], GE set itself a new record for speed, naming his successor and three others down the line in half a day and announcing the changes before the day was over. That performance has been the model to shoot for ever since. GE does not allow a top leadership vacuum to exist, even for a day." The institutional response to Johnston's unexpected resignation was possible only because GE had (and continues to have) "robust talent pipelines and same-day succession plans" in place and operational. The rapid response also demonstrates "the strength and power of the GE system of talent mastery, one centered on the Session C system.

Robust talent pipelines, C Sessions, and same-day succession plans are worthless without people who know how to make the most effective use of them. The development of talent therefore requires the mastery of skills needed to sustain that development. The ever-practical Conaty and Charan identify five specific organizational "How-Tos":

1. Get all senior leaders centrally engaged in talent recognition and selection
2. Hire for demonstrated leadership, not just for credentials
3. Learn as much as possible about values and behavior before hiring
4. Be humble enough to hire "outsiders" but ensure cultural assimilation
5. Be totally honest about who has greatest leadership potential

They also identify five specific "How-Tos" for the individual:

1. Make talent development an obsession
2. Drill down deep to the specifics of each person's talents and potentiality
3. Give frequent, honest, and specific feedback
4. Make talent development a core competency with accountability
5. Provide intellectual challenges and opportunities fir additional growth

I presume to suggest that an extended metaphor, "gardening," is instructive in this context: establish a culture of rich "soil" that has sufficient sunlight and moisture; plant the best "seeds" and then nourish them; prune, relocate, or remove one or more, if necessary; and meanwhile protect the garden as "plant" growth continues.

Talent is a resource, an asset, not a title or position. Most knowledge transfers in any workplace occur informally during interactions between and among those involved. To varying degree, each person should be both a "teacher" and a "student." That is why this book can be immensely valuable to those who have supervisory responsibilities as well as to those entrusted to their care. ... Read more

Editorial Review

Reviews

The Visable Hand
A solidly written biography of one known by most of us only as the Scottish author of an unread great book. Professor Phillipson's fine effort should lead many to go back and read "The Wealth of Nations."

Adam Smith's thoughts still have direct relevance to today's bucketful of economic problems--and resulting strident political debates--over government's proper role in terms of expenditures, debt, taxation, and business regulations.

While this book concentrates on the scholarship of Adam Smith, the author also intelligently traces the era within which Smith lived and his private life that included such striking people as David Hume, James Boswell, and Voltaire.

In this current age of instant and empty celebrities, Smith still stands, after about 250 years, as a man worth knowing.

"The Elusive Invisible Hand Comes Alive Again".
This is a great, thoughtful & engaging biography on the elusive Scottish academic & philosopher, Adam Smith, titled "Adam Smith : An Enlightened Life" by professor Nicholas Phillipson. Adam Smith is well known for his description of the market's/capitalism's "invisible hand" that guides the economy, keeping 'everything' under control. But there is more to this elusive philosophical man than meets the eye : he was a private man, a hypochondriac who lived with his widowed mother most of his life. His popular lectures at the University of Glasgow turned Adam Smith into an 'institutional figure of note'. He wrote two great influencial books, "The Wealth Of The Nations" which took him 10 years to write on colonial America & the philosophical, "The Theory Of Moral Sentiments". By drawing from his published works & lecture notes, his thinking on social theory & ethics influenced his theory of economics & human behaviour.

Adam Smith instructed his executors to destroy all his lecture notes, but seven upublished philosophical essays & 193 letters survived to give us a glimpse of this elusive Scottish academic & philosopher, making the market's "invisible hand" come alive again, even if it's only at an intellectual level. This is a highly recommended reading on the 18th century's influential philosopher & academic that is Adam Smith.

An Important Contribution to Our Understanding of Smith
I have read five book-length biographies of Adam Smith and concluded that the one by Ian Simpson Ross was definitive. I purchased the latest by Nicholas Phillipson because of his reputation rather than an expectation to learn much that is new. Reading it has proven that labeling a work as definitive does not mean it is the final word on the subject. Quite the contrary, Phillipson's work is aptly titled: Adam Smith: An Enlightened Life, as it traces the development of Smith's thought in the milieu of the Scottish Enlightenment and British geopolitics during the second half of the eighteenth century. What was especially enjoyable was to learn more about the great debt Smith owed Hume as an intellect in shaping his works and as a friend. Phillipson expresses puzzlement about why Smith may not have held up his end of the friendship. After reading E. C. Mossner's The Life of David Hume and the Smith biographies, it seems clear Smith was too prudent to do so. If given a change, this reviewer would rather have kept the company of Hume than Smith.
Yale has done justice to this wonderful work. The production is a delight to see and to hold. It provides the best answer to e-books because we buyers will surely enjoying pulling it from our shelves, looking at the illustrations, and reading it again.

The Owl of Minerva
I thought this book would have a million reviews, but since not let me give it another fiver. I was just astonished at how Smith's grand worldview is in fact a projection of his own provincial, very historically constrained culture. The author, while emphasising this fact, is oddly (seemingly, reading between the lines)still inclined to view it as somehow objectively correct as a model of human behavior. Phillipson's mastery of the Scottish Enlightenment is absolutely complete, what a great tour. This is a must read for anyone interested in the humanities.

The owl of wisdom flies at night. After it's over, then we understand. About capitalism, that's the feeling I get from this book. ... Read more

Editorial Review

NATIONAL BESTSELLER
WINNER OF THE NATIONAL BOOK AWARD

In this groundbreaking biography, T.J. Stiles tells the dramatic story of Cornelius “Commodore” Vanderbilt, the combative man and American icon who, through his genius and force of will, did more than perhaps any other individual to create modern capitalism. Meticulously researched and elegantly written, The First Tycoon describes an improbable life, from Vanderbilt’s humble birth during the presidency of George Washington to his death as one of the richest men in American history. In between we see how the Commodore helped to launch the transportation revolution, propel the Gold Rush, reshape Manhattan, and invent the modern corporation. Epic in its scope and success, the life of Vanderbilt is also the story of the rise of America itself. ... Read more

Reviews

A marvelous biography of a quiet and mysterious man of immense power and stupendous wealth
"The First Tycoon: The Epic Life of Cornelius Vanderbilt" is an impressive and fascinating biography, wonderfully evocative of the quiet man with enormous power, influence and wealth. At the time of his death he owned five percent of America's wealth.

Even though he was known as the king of the railroad, he was much more than that: he was the king of the steamboats and ships, and the king of industries and corporations as well. He built the original Grand Central Terminal in New York, and also the mighty New York Central Railroad system connecting New York with Chicago.

This tycoon also had his share of pains, disappointments, sadness, and regrets that life offers all mortals. His son Cornelius Jeremiah's addiction to gambling and also the affliction of epilepsy greatly distressed him.

Written in simple and lucid prose, the book is gripping and entertaining to the very end: "Vanderbilt was an empire builder, the first great corporate tycoon in American history. Even before the United States became a truly industrial country, he learned to use the tools of corporate capitalism to amass wealth and power on a scale previously unknown, creating enterprises of unprecedented size."

Mr. T. J. Stiles has written a marvelous biography of Cornelius Vanderbilt. Reading this book was a joy.

Stiles Vanderbilt Biography is Good Beyond Words
I don't often write "reviews" because I would prefer to spend the time reading. But Stiles new book demands high praise and unreserved recommendation to any readers who enjoy good history, colorful life stories and well written and compelling narrative. The Vanderbilt story, his times, and Stiles fine writing make this long history pulse with the "can't put it down" quality of a great mystery. This truly is a must-read, and a joy from cover to cover. At the end I only wanted more!

Exceptional at any price
A superlative and memorable biography, easily winning comparison with the works of David McCullough, William Manchester, and Robert Caro. While I joined with those who protested the original Kindle pricing of this book, and am gratified to see the reduction in price, I'll also say that the book is well worth whatever price you pay. It's without doubt a remarkable accomplishment and a rich display of Mr. Stiles' considerable talents.

Fascinating Book
This is a fascinating look at one of the great men of capitalism and the dynamics of the 19th century. Amazing how much is relevant to the situation we are in today.

Ignore the "one star" reviews of those who were complaining about the Kindle product (probably all the same person). Very sad when the review process is hijacked by cheaters.

This book deserves better
Full disclosure: I have the book but haven't finished it yet. I'm enjoying it so far, much as I enjoyed the last book by T.J. Stiles, on Jesse James. Both books are highly readable, and provide a vivid, illuminating portrait of their respective subjects, as well as the society that made them (and which they came to shape).

What compelled me to post a review this early in the process, is the flood of negative ratings - most (if not all) of which are about the e-book's pricing, not the book itself. Those criticisms, however understandable, have little to do with the substance of the book. This book and its author deserve better than that.

A Truly Epic Life
I thoroughly enjoyed reading this biography of Cornelius Vanderbilt. Not only is this his life story but also the story of New York's rise to prominence as the financial center of the United States and the development of transportation that made America such a mobile society. You will also read through the initial stages of a maturing nation during the financial panics and civil war of the 19th century.

Vanderbilt had an enormous influence on each of these as he built one of the first true corporations. The biographer gives a balanced presentation of Vanderbilt as one who not only brought about changes through his unbending competitive nature but also how that nature effected the people and society around him. It is striking to learn how one man's decisions during that time could influence so many for good or bad, and Vanderbilt would do whatever it took to protect his business interests. He did not seem to go to the unethical or illegal lengths that other business leaders did, but he did make decisions that could inconvenience or even harm others. He was a man who marched steadily forward, valuing loyalty and personal integrity. But he was impersonal and grappled with family issues, especially with his sons.

Some of the other interesting parts of Vanderbilt's life were his involvement in Nicaragua and having to raise a small army to face William Walker's filibustering in that country, the internal battles to maintain control of his companies, the determination to consolidate the railroads and the rescue of the nation's economy on more than one occasion. Vanderbilt truly led an epic life during a most transformational period of history. I recommend this biography to anyone interested in Cornelius Vanderbilt because it will give you so much more in understanding how this country developed during his lifetime. It is worth the time and investment. ... Read more

Editorial Review

Jim Collins Answers the Social Sector with a Monograph toAccompany Good to Great.30-50% of those who bought Good to Greatwork in the Social Sector.

• This monograph is a response to questions raised by readers in thesocial sector. It is not a new book.
• Jim Collins wants to avoid any confusion about the monograph being abook by limiting its distribution to online retailers.
• Based on interviews and workshops with over 100 social sector leaders.
• The difference between successful organizations is not between thebusiness and the social sector, the difference is between goodorganizations and great ones. ... Read more

  Reviews

  Collins does it again, December 3, 2005
  As a non-profit leader, I've been waiting for this monograph to be published for several months, and Collins did not disappoint.
  
  In a lucid style that only Collins can deliver, he masterfully explains the subtle (but seismic) concepts of good to great for the social sector. Similar to his previous books, he effectively uses a broad array of real-life examples (e.g. the NYPD, a church, the Girl Scouts, the Cleveland Orchestra, a high school science dept), helpful graphics, and a very readable, conversational tone. Even though the monograph is only 31 pages, Collins contributes his clear thinking on numerous issues that will be very familiar to social sector leaders: how to measure success in non-$ metrics, how to recruit and motivate a passionate (and poorly-paid or unpaid) staff, how to think differently about "restricted funds," and how to transcend systemic / external / industry-wide problems. I particularly enjoyed his discussion on "legistative" leadership (versus "executive" leadership in the business world). Collins predicts a dramatic reversal - that one day non-profit leaders, who have mastered legistative leadership, will be wooed away to lead for-profit businesses.
  
  This monograph does stand on its own. However, I think you would have to be fairly familiar with the concepts in Good to Great to fully appreciate its value.
  
  If you are still not convinced, you can also go to his website, jimcollins.com, to read 3-4 pages of snip-its from the monograph.
  
  Regardless, I would recommend this to every social sector leader.

  Five Challenges for Non-Profits to Achieve Greatness, August 12, 2006
  I have direct experience in the social sector with over twenty-five years as an advisor or board member of several, varied non-profits. "Good to Great and the Social Sectors" resonated with me as it fills a very deep void in social sector leadership guidance.
  
  Recently, one executive newcomer to a non-profit called to tell me she was being told to back off by other executives. She was being perceived as "too businesslike"; she did not understand the non-profit world. I asked her to have these people define "businesslike." She learned that "businesslike" meant expecting people to complete assignments on time and be accountable!!
  
  This attitude, which permeates many non-profits, is one of several targets in "Good to Great and the Social Sectors." In fact, due to the diffuse power structure that exists for most social sector organizations, non-profits need even greater discipline - disciplined planning, disciplined people, disciplined governance, disciplined allocation of resources.
  And the culture of discipline is not a principle of business; it is a principle of greatness.
  
  Non-business leaders in the social sector must operate differently as they do not have the concentrated power of a business CEO. They have a thousand points of no. It is Collins' observation that they require two skill sets - leadership skills and legislative skills - to be successful. And, he believes you will find more true leadership in the social sector as a result.
  
  The book is organized around five issues that need to be addressed for greatness. These are:
  Issue One - How do you define great without business metrics?
  Issue Two - What is "Level 5 Leadership" in the social sector?
  Issue Three - How can you get the right people on the bus?
  Issue Four - How do you apply the Hedgehog Concept (attaining piercing clarity about how to produce the best long-term results) without a profit motive?
  Issue Five - How do you use brand to build momentum?
  
  Great societies have both great business sectors and great social sectors. With this in mind, Collins was motivated to write this book. He realized that it was not simply good enough for him to focus on a great business sector but also on a great social sector. He has done us a service. We will gain as a society if all who work with or for non-profits read and apply the lessons of this excellent monograph.
  

  extremely helpful, March 22, 2006
  Many of us who work in the social sector-in my case the United Methodist Church-were encouraged and inspired by Jim Collins book Good to Great. We worked to adapt the methodology to our work, but some parts didn't fit. Collins realized from the feedback his work was getting that a large number of his readers needed more specific research into their context. This monograph is a first installment in addressing our need.
  
  The underlying principle of the book is that we don't need to impose the language of business on the social sector, but develop a language of greatness. He does this by focusing on five issues that surfaced during the Good to Great research and tweaking them for a different mission and context. They are:
  
  1. Defining Great-How do we calibrate success without business metrics?
  2. Level 5 Leadership-Getting things done within a diffuse power structure
  3. First Who-Getting the right people on the bus within social sector constraints
  4. The Hedgehog Concept-Rethinking the economic engine without a profit motive
  5. Turning the Flywheel-Building momentum by building the brand.
  
  The monograph is a first look at applying these five good to great concepts to the social sector. I found it to be exciting, invigorating and one of the best things I've read in a long time. I think this is essential for non-profit leaders-especially church leaders-who want to build great organizations and build accountability within the constraints of structures that we can't change.

  A Critical Resource, May 3, 2006
  I was so encouraged to see this new monograph. I work in a nonprofit and have struggled in applying some of the concepts from the Good to Great book to the nonprofit context. But this simple addition provides clarity and focus.
  
  I really appreciated the balanced view that Jim took regarding how "busines-like" a nonprofit should be. It is so freeing to not have to be like a business but instead shoot for being a disciplined organization. I go back to his comment "Disciplined People - Disciplined Thought - Disciplined Action" constantly and am working to make that a reality in our organization.
  
  Jim Collins impressed me for another reason as well. Instead of coming out with another edition of the book to add this chapter - which would have been much more lucrative - he decided to be a generous mind and share this in the form of a much less expensive monograph. What a help to nonprofits!
  
  A must read if you work with or for nonprofits.

  A helpful addition to "Good to Great", February 23, 2007
  Having read (and enthusiastically enjoyed) Jim Collins' "Good to Great" several months ago and working on a church staff, I was pleased to discover that he wrote this monograph to draw together the conclusions of that wonderful business book and the non-business world. I found this addition to be most helpful.
  
  As with all of Collins' writing, this monograph is extremely accessible. He writes at a very intellectual level without getting overly technical. He presents the basic premise that not everything in "Good to Great" is broadly applicable outside the business world.
  
  For instance, the difference between the executive authority that business leaders have is starkly contrasted with the legislative authority that leaders have in the social sector. Because I work almost exclusively with volunteers within the church, this distinction is important and obvious to me.
  
  He also mentions that issues related to resources are more complicated than the relatively simplistic economic factors that exist in business. Instead, social organizations need to consider all of the available resources, which includes people and time in addition to money.
  
  Despite these and other distinctions that Collins draws between the business world and the social sector, it is interesting to note that the overall principles of "Good to Great" remain valid. For instance, the concept of Level 5 leadership remains prescriptive for high-performing leaders outside of business.
  
  His concluding thoughts are very insightful and instructive. In short, he suggests that the transition from good to great happens in business and outside of business. For my context, though the church may bring to bear particular difficulties and constraints, so does each and every institution. The principles of greatness are common across all organizations, even if they might look slightly different. In his words, "greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice, and discipline." There is valuable wisdom in those words for those of us who work outside the business community. My one and only complaint about this resource is its price for a mere 30 pages. Nonetheless, just as I recommended the book, I would encourage anyone interested in being part of a great institution, regardless of the setting, to read this monograph.

  Good, but not great., March 9, 2006
  I think that this monograph is useful material for public sector, non-profit, or secular organizations. It presents some useful points that extend the Good to Great concepts to organizations that are not profit-driven.
  
  My largest complaint is that the current price is not consistent with the amount of material. Good to Great is an excellent value, while this additional monograph is roughly a single additional chapter at over half the price.

  Excellent companion addressing not-for-profits' unique needs, May 23, 2008
  Jim Collins is the author of "Good to Great," an influential business and leadership book. In the time since the publication of the book, Collins realized that there exist points of disconnect within the book for leaders of not-for-profit agencies (e.g. churches, local charitable organizations, groups that exist for specific causes like disease eradication or the advancement of art). In an effort to apply the concepts of "Good to Great" to the unique needs of social service organizations, this monograph was produced.
  
  This monograph can best be thought of as an appendix or additional chapter for "Good to Great." Indeed, the reader will be lost unless first reading the work upon which this monograph is based. In it, five points/modifications/explanations are provided that address what Collins perceives to be the five biggest "trouble areas" when applying "Good to Great" to not-for-profit agencies.
  
  First, not-for-profits struggle with the definition of "great." In the definition supplied by Collins in "Good to Great," "great" is partly defined in terms of profit margin. Since not-for-profit agencies, by definition, do not seek profits, a modification must be made. Collins suggests using anecdotal evidence and rubrics instead of budgetary numbers to determine if the organization's goals are being met.
  
  Second, power and authority in social sector organizations are not centralized, but contain nearly limitless checks ("a thousand points of no"). Collins advocates a leadership style that emphasizes the good of the organizations. If the organizational leader can effectively communicate (legitimately, not falsely) that his main concern is the health of the organization and realization of the cause, he buys himself a lot of leeway in decision making.
  
  Third, volunteer-based organizations feel great pressure to simply put warm bodies in positions of authority instead of selectively choosing only the best candidates. Collins argues that the pressures of a volunteer-based culture should only make the leader more determined to practice selectivity. Setting high standards, focusing on creating "pockets of excellence" within organizations, and emphasizing the moral importance of the organization can help to attract high-quality employees and volunteers.
  
  Fourth, the concept of profit margin creeps in again. It is important to recognize that organizations--business as well as social-sector--need money to operate. Even though not-for-profit agencies are not about the money, their "hedgehog concept" should certainly include consideration of their economic engine. That is, their social cause should take into consideration the question, "will people actually buy into our cause and support it with donations of volunteer hours, monetary donations, and in-kind support?"
  
  Finally, the organization must not neglect promoting itself as a "brand." Although the natural inclination of social sector institutions is to keep the focus on the cause, they must also make sure people understand that the organization is meeting the cause effectively...indeed, they are "the best" at what they do. A reputation for excellence tends to attract loyalty and donations. Consider Harvard University, which attracts millions of dollars it doesn't necessarily need because people believe that a Harvard education is "the best" in the world.
  
  In all, as a pastor in a not-for-profit church, this book addressed all the concerns I had in applying Collins' "Good to Great" concepts in my situation. Truth be told, it even addressed problems I had not yet identified. I highly recommend this brief monograph to compliment "Good to Great."

  So much promise . . . . falls short in the execution!, November 22, 2007
  This book (actually I listened to the CD version) would have been a useful chapter or two published as part of the original "Good To Great" book. Unfortunately, I didn't think that it stood up well on its own. I was hoping for some sort of "aha" moment, but this 'monograph' failed to deliver. Maybe Jim Collins and his team were not able to do the same in-depth research on non-profits as was done on the Corporations for "Good To Great".
  Hmmm . . . I was disappointed and thought I overpaid for the relative value I got out of 'Social Sectors'.

  No Beef in This Sandwich, February 28, 2008
  The high praise by many of the reviewers of this book makes me feel that Jim Collins had his whole staff send in reviews. He defines no terms including non-business entities, business thinking, and social sector; states there are valid ways to assess greatness without metrics but gives no examples or gives examples that ARE metrics; claims the use of business language is naive and then analyzes "non-businesses" (whatever they are, he never says) using the language of business (budgets, financial statements, annual reports, executive compensation, etc); talks about motivation as though he just discovered that money isn't all there is (think Maslow's hierarchy of needs); and talks about building momentum as though he never heard of successful companies whose success destroyed them because they FAILED to follow the rules of business (growing too fast, or expanding into activities too far removed from the core activity, for example). I have not read any of Mr. Collins' other works but this one is just befuddled. The only concrete statement he makes towards greatness is "hire the best people." Duh. Other than that, I did not find anything that made sense in this work. It is filled with the illusion of ideas, that when looked at closely evaporate.

  A Very Good Contribution, March 21, 2006
  Jim Collins makes a very good contribution to the conversation about whether social sector organizations should become more like businesses. He points out that many--most?--businesses are at best good (not great) and the goal of social sector organizations should be to become great organizations--a concept that cuts across the social and business sectors.
  
  One weakness of this monograph is that at least one of the five factors Collins identifies as the basis for great organizations--the hedgehog concept--does not, in its totality, slip neatly and fit well in the social sector. This, however, is a minor weakness compared to the overall contribution Collins is making to helping strengthen organizations in the social sector. ... Read more

Editorial Review

Fast food has hastened the malling of our landscape, widened the chasm between rich and poor, fueled an epidemic of obesity, and propelled American cultural imperialism abroad. That's a lengthy list of charges, but Eric Schlosser makes them stick with an artful mix of first-rate reportage, wry wit, and careful reasoning.

Schlosser's myth-shattering survey stretches from California's subdivisions, where the business was born, to the industrial corridor along the New Jersey Turnpike, where many of fast food's flavors are concocted. Along the way, he unearths a trove of fascinating, unsettling truths -- from the unholy alliance between fast food and Hollywood to the seismic changes the industry has wrought in food production, popular culture, and even real estate.

Reviews

I finally learned what I had been eating (and why), January 3, 2001
I picked up this book the moment I saw it mostly because I've always known that fast food is "bad for you" - but I've been both afraid to know why and curious at the same time. After all, I've been hearing the other side of the argument my whole life. I've been pummeled by fast food ads - and eaten plenty of fast food - for a ridiculously long time. Why do I want to stay ignorant about it?

In his introduction to "Fast Food Nation", Schlosser says that he's interested in fast food "both as commodity and metaphor", and indeed, this well-written tome is as much an examination on the titular product as an able primer on the encroachment of large corporations into the lives of working Americans.

Those of you expecting an update on John Robbins' "Diet For A New America" will be disappointed. Schlosser has not crafted a scientific slam against fast food joints, but rather a thorough examination of their motives and histories, with a strong emphasis on the people - from both sides of the coin. The time he devotes to the personal stories of those whose lives have been forever changed by fast food - from the rags-to-riches tale of Carl Karcher to the tragic story of a big-hearted rancher named Hank - are largely what keeps "Fast Food Nation" both emotionally provoking and tangible throughout.

If this book were merely a saber-toothed diatribe against fast food corporations, it couldn't allow itself such concessions and would probably come across as socialist tubthumping to all but the converted. Instead, lengthy establishing essays on the history, ideologies, and present state of the communities and corporations discussed are a welcome introduction (and counterpoint to) the individual stories of struggle, greed, and survival.

While he makes no secret where his sympathies lie, Schlosser often reminded me more of Wendell Berry than John Robbins, as he bravely attempts to "tell it like it is" from more of a "pro-human" as opposed to an "anti-corporate" perspective. In doing so, the dehumanizing aspects of all global corporations (and the effects of NAFTA and the Telecommunications Act of '96) are supplied a provoking reference point.

By my standards, "Fast Food Nation" is a fine debut accomplishment for the author and a welcome book for our increasingly homogenized (and de-regulated) times. The story of fast food, a quotidian experience for many, has never seemed quite so impressive, scary, and profound. My education began here.

McInteresting Look at Fast Food, May 5, 2002
I read this book knowing I was not going to learn any new and cheery anecdotes about how Ronald McDonald got his start..... instead I read this to solidify the notion that fast food was not a healthy choice. And boy, did this book give you reasons it is not, and I'm not just talking nutritional value here.

I found this book fascinating for the detail was great, well researched, and given to the reader straight. It was an eye opening book. Who knew that due to the meat industry being run just by a few corporations, essentially we are eating the same meat from the same feedlots and slaughter houses whether we buy it at a fast food chain or the local supermarket, and perhaps even the nicer restaurants. I also found some of the content appalling. Cattle are fed cats, dogs, other cows, even old newspaper! If this doesn't outrage you enough, just wait to you get to how these same meat conglomerates treat the low paid, low skilled employees of the slaughterhouses.

This book is insightful and unbelievable, and will make you question how the fast food giants sleep at night.

You can still have it your way, January 3, 2001
A fascinating, important book for everyone. Fast Food Nation doesn't take easy shots at the fast food and beef industry, it shows the whole story, shifting back and forth betweeen intimate details of real people (a meat packing plant worker, a franchise owner, several cattle ranchers), and the larger, global markets created by the fast food restaurants. The book achieves a kind of epic flow to it, full of interesting and infuriating information. Splendid reading.

The Hidden Costs of Mass Consumption of Fast Food, April 10, 2001
If you ever eat in fast food restaurants, you should read this book. It will fill your mind with issues that probably had not occurred to you before.

The fast food industry today is the service equivalent of the harshest environments of industrial America. The industry's size creates behemoths among its suppliers who can be even more aggressive in cost-cutting than are the employers of your neighboring teenagers. This book recounts the many dangers and hidden costs this industry imposes on everyone in our society, and suggests some ways to improve. The best defense, however, is a discerning consumer. Read this book to help become one.

Mr. Schlosser begins with the founding of the modern fast food companies, and traces them all back to Richard and Maurice McDonald's first hamburger parlor on E Street in San Bernardino, California. Carl Karcher (Carl's Jr.), Glenn Bell (Taco Bell), and the founder of Dunkin' Donuts all visited there and designed their stores to take advantage of those ideas about achieving higher throughput and consistency. Naturally, Ray Kroc later came along to refine the practices into the foundations of the modern McDonald's.

With success came market power, and abuses of that power. The book looks at several ills that have resulted. For example, the cost of meat needs to be as low as possible. This has led to dangerous conditions where many people are injured in the slaughter houses. His story of Kenny Dobbins at Montfort will chill you forever. The industry has also succeeded in getting inspection standards reduced so more harmful bacteria are making their way into your meal, and more people are getting sick. The old and the young are most likely to be harmed by the rapid growth of E. coli 0157:H7. This hit home with me, having just suffered a bout of food poisoning after a fast food meal last week. The Federal Government buys meat for school children with lower quality standards for bacterial contamination than even the fast food people apply. Pressure from slaughter houses on ranchers has driven many out of the business. The human price can be high, as one story recounts here.

The food is harmful in other ways. It is full of sugar and fat (that's what makes it taste good). The growth in obesity (what some people call an epidemic in America) closely tracks the expansion of fast food meals (25% of the population will eat at least one weekly). And the trend is getting worse, now that you can have unlimited refills of sugared soft drinks.

Children are especially vulnerable, because advertising is so persuasive to them. As a result, they go to eat the meals in search of toys and games, and other novelties.

Teenagers are often employed in fast food parlors in violation of the child labor laws, costing them sleep, exposing them to late night dangers, and leaving them too tired to focus on school. Those who deliver the food often create accidents and are at risk to be robbed.

The physical appearance and culture of towns is brought to the lowest common denominator by the drive to produce these meals fast and cheaply.

If the local management isn't very good, goofing off employees have been known to put noxious substances into the food. Franchisees often work long hours, costing them a normal life. Carl Karcher reported that he was still heavily in debt after 50 years in the industry. The main sign of progress he told the author was that the road outside used to be dirt, and was now paved.

These ills are being transported around the world now, as fast food is globalized.

Mr. Schlosser has several suggestions for improvement including tougher regulation of food, working conditions, and of advertising to children (he wants it banned). I thought his most realistic suggestion was that the fast food companies themselves lead the way by raising standards. McDonald's has done this in the past (to its credit), and could certainly do so again. After the facts in this book are more widely know, it is highly likely that there will be an interest in eating food from restaurants that provide these meals in more socially productive and humane ways. I know that I would shift my purchasing to reflect such improved standards.

To me, the interesting part of this story is that the problems exposed here are not hidden. This book could have been written at any time in the last 40 years. Why do we turn a blind eye to the problems that fast food creates?

After you finish this interesting and thorough book, I suggest that you consider where else problems exist that we do not pay attention to. For example, where does the sewage from your town go? What are the implications of how it is disposed of? Where does your trash go? What problems does that create? What are the pollution effects of your new SUV? How much more likely is your family to be injured or killed because it could roll over?

Consider all the costs of the products and services you consume, not just the ones you pay for directly to the person who sells to you.

Extremely Important and Powerful Book, April 8, 2001
Fast Food Nation deserves the widest possible audience. It should be assigned reading in every high school in the country. Parents of young children should also be encouraged to read it. Fast food chains, with their bright primary colors and happy faces, need to keep the truth about their products and practices well hidden. Otherwise their customers might think twice about coming back. Schlosser not only tells us what's in the food and how it gets produced, but he examines the depressingly one-sided business arrangements that run the gamut in this industry, from the way the chains control their own low-paid, low-skilled, no-benefit-receiving workers, to the downward pressures they exert on meat, potato and chicken producers, who work in dangerous, low-paid, unpleasant jobs with little control over their lives and livelihoods. This is a great book in the tradition of muckraking journalism. If readers take it seriously, hopefully, like Upton Sinclair's 1905 book "The Jungle," it will lead to major reforms.

The dark side, indeed, March 7, 2002
Muckraker or hero? Schlosser has been called both by reviewers of this book. Personally, I think Schlosser has written a book that long-needed writing and confirms the truths we already knew but didn't want to admit: our comfort is killing us. This book isn't *just* about fast food and the perils of The Golden Starches: it is an indictment of our entire "gimme now, gimme cheap, gimme easy" culture. No one is exculpated: we are all in some fashion part and party of the McDonaldization of America.

Schlosser looks unblinkingly at the meat packing industry; the impact of the fast food industry on our environment, economy and social custom; our gradual and apparently inexorable return to the "Robber Baron" days. Much of what he writes is uncomfortable to read. I know I revisited just about every Big Mac I've ever eaten while reading this book. Having done so, I can tell you that I will never eat another Big Mac, Whopper, Biggie Fry, Chicken Bucket or Taco Grande again. Ever. Neither will my kid, until he can buy his own Super Size Bucket o' Crud with his own money and by his own choice. I hope he makes better choices than that.

As disturbing as the meat packing and food handling details are, the bit that resonates the most with me is the imperialist attitude of these corporate giants towards their workers. I was astonished to learn that these companies get tax breaks in the hundreds of millions of dollars under the aegis of "job training" when their goal is to have full automation in their kitchens. The only "job training" done in most of these places consists of knowing what button to push when a buzzer rings. Even basic literacy isn't a requirement for one of these jobs.

Fabricated food is supplanting whole food in our nation's diet. The values embodied by fabricated food -- easy access, inexpensive, plentiful, homogenized -- are evident in every strip mall on every roadside nationwide. Is this what we really want? Is this what we truly value? What are the long term consequences? In short, what do we trade off in exchange for easier, cheaper, more? If we are more readily identified globally by Ronald McDonald and Mickey Mouse than by our ostensible values of freedom, democracy and individual liberty, what becomes of our credibility?

Hats off to Schlosser for his book. If only it could be required reading for school kids and parents. If only the United States would start treating obesity with the same seriousness it does tobacco addiction, there might be hope for change. Ultimately, though, it comes down to you and me. What are we going to do about it?

Much to ponder here., July 19, 2002
With a fast food restaurant on just about every corner in any town with a population over 5,000 (barely an exaggeration), this is a book that was long overdue. With newspaper articles and television news stories about obesity, child obesity, and hypertension becoming almost a weekly occurrence, some in-depth reporting regarding much of the source of these problems was greatly needed. But who does Schlosser roast and who does he leave alone?

The early chapters are mainly devoted to the history of the fast food restaurant and the men who created and later "perfected" the industry. The "founding fathers" as Schlosser calls them are not looked on with contempt by the author. Rather, I sensed admiration for the McDonald brothers who began using "speedee service" at the first McDonald's restaurant in San Bernadino, California in the early 1950's. The same holds true for other early fast food entrepreneurs including Carl Karchner (Carl's Jr. and Hardee's), J.R. Simplot (the Idaho french fry king) and even Ray Kroc who made McDonald's the behemoth that it is today.

One enlightening section focuses on the flavor industry. Didn't know there was one? Neither did I. According to Schlosser, there are a myriad of plants in the New Jersey area who do nothing but concoct flavors for the vast majority of processed foods and drinks that we drop down our throats. Frequently in the past I had wondered what "natural flavor" on the side of food labels meant. Now I know and I feel somewhat cheated.

The fast food industry as a whole does take a hit from the author for low wages, and poor safety training. The point is made that the industry actually wants a revolving door for teens to go continually through. Teens are willing to accept lower wages when living at home because to them, it's pretty much all disposable income. They also don't expect health insurance or other benefits. Schlosser also puts to bed the myth that "worker training" funds are beneficial to the workers themselves. Too often the money allocated for fast food businesses to train employees is money simply pocketed by the franchise or by corporate. The workers aren't employed for very long and a study was undertaken that determined that the vast majority of the workers hired with the funds would have been hired any way.

Most of the author's contempt is reserved for the meat-packing industry and the federal government which, he says, fails to pass laws that would better regulate packing and slaughterhouses. Basically, the industry is fraught with environmental and food safety violations. In addition to that they are constantly on the prowl for illegal aliens who will work dangerous jobs for little money, but is considered a pay raise by the worker (five bucks an hour for cutting meat? great!) Due to a lack of proper regulations, e-coli is a major problem, as the author aptly demonstrates.

I can't say that I agreed with every thing the author has to say about the fast food industry, but I certainly agreed with the bulk of it. For example, he would like a ban on all advertising by fast food establishments during children's televison programming. That may sound admirable, but at the same time seems a slippery slope that I'm not sure we want to undertake. What would be considered children's programming? Would McDonald's be considered unacceptable but Cracker Barrel deemed okay? I do, however, agree with him that the federal government should enact whatever laws necessary to ensure that meat is handled, stored, shipped, prepared, etc. properly. Protecting the public from food-borne illness is not and should not be a political issue. It's just common sense and the right thing to do.

One will definitely learn a lot here. One doesn't have to agree with everything said to appreciate gaining new knowledge on an important topic. Schlosser even admits to eating fast food himself, although he says he now has given up ground beef. Moderation is key here I think. Perhaps this book would serve best those who have a tendency to make fast food their meal at every meal (believe me, there are some doing just that).

Before your next meal, read this book, December 29, 2000
Every American, and increasingly everyone in the world, should have available to them the information presented in this excellent book about the methods of the fast-food industry. This is not a vegan or vegetarian slam against beef and poultry producers. Instead, it is a look at how the large fast-food industry has transformed our nation, and is transforming the world, as we enter a new century. Readers will love Schlosser's easy writing style, even as they grapple with what his information tells us about the food world around us. This is an especially important book for every parent. Even if parents do not take their children to the restaurants mentioned, they will surely find the information about what is happening in schools and on TV important to the life of their family.

THERE'S *WHAT* IN THE MEAT?! TELL ME YOU'RE KIDDING, RIGHT?, April 5, 2001
Reading this exhaustively-researched book is an experience that is enjoyable, disgusting and infuriating all at once. Some of the stuff described in Schlosser's book seems to be so farfetched (can corporations really be that nasty?) that you'll initially dismiss it as being highly improbable. However, one glance at the unbelievably lengthy reference and note appendix and you realize with great sadness that none of it is fiction. To this extent, Schlosser stuffs an incredible amount of information in this book and, throughout, his writing style is easy and flowing. If only the shocking information he gives us was as smooth and easy to digest.

An earlier reviewer dismissed him as being avidly anti-Republican. All of Schlosser's comments are factual (refer again to the note section in which you will find ample documentation). Though the subject matter would lend itself to such abuse, Schlosser doesn't push his personal opinion on the reader: he's there to give us the facts and allows us to make the decisions.

You've probably read in other reviews some hints of the horrors described in the book: worker abuse, dangerous working conditions, tainted food supply, etc. The chapters on the meatpacking industry and the slaughterhouses are truly frightening. And these corporations' ability to evade the law and to control governmental agencies are even worse! Poop-filled meat and school lunches tainted with e.coli are only the beginning...

This book will make you think twice about what you put into your body. Was it written to scare you off fast food? Not specifically, but its main purpose is to have you THINK. And this it does with excellence. A must-read for everyone.

Excellent Coverage of the Fast Food industry, May 14, 2001
Schlosser writes a gripping account of the societal effects of the plethora of fast food restaurants. While not vegetarian's book, a health book, or even an animals' rights book, it is rather a grim look at the impact on the nation by fast food chains.

The start of the book covers the beginnings of McDonalds, Carl's Jr, Wendy's. and other now-famous chains. Reading the capitalistic accounts of the owners is truly remarkable in understanding how these people got where they are today. However, there is a dark side to their success, one that Schlosser reveals to the reader and reveals the true nature of the business: profits.

Schlosser covers the non-unionized workers that run the stores. They are at risk to robberies and are underpaid and have no real benefits. They are also given no real job skills, yet the restaurants receive tax breaks for the high rate of turnover on their employees. Schlosser then takes the reader through tours of various slaughterhouses. He has personally interviewed workers who are forced to do rush jobs butchering animals and who have high rates of on the job injuries that are quietly swept under the carpet. Most of the workers in charge of the nation's meat supply are uneducated illegal aliens. Most of the food found in fast food restaurants has been overly processed and may contain fecal matter or other contaminants, according to Schlosser. The overworked and understaffed USDA is often at the mercy of the meat plants. Despite repeat violations, even the USDA continues to purchase meat for school lunches from cited meat plants.

There are many throwbacks in this book from Upton Sinclair's, The Jungle (the book is dedicated to "Red"). From reading the book, one would guess we are only a little better than where we were in 1906. The book doesn't advocate vegetarianism, but does equate the working conditions for the delivery of the cheap burger to those of the sweat shop workers. I found the book extremely compelling and factual, one that made huge amounts of sense to me as I see trend of homogenizing America, and the world. ... Read more

Editorial Review

Decline can be avoided.

Decline can be detected.

Decline can be reversed.

Amidst the desolate landscape of fallen great companies, Jim Collins began to wonder: How do the mighty fall? Can decline be detected early and avoided? How far can a company fall before the path toward doom becomes inevitable and unshakable? How can companies reverse course?

In How the Mighty Fall, Collins confronts these questions, offering leaders the well-founded hope that they can learn how to stave off decline and, if they find themselves falling, reverse their course. Collins' research project--more than four years in duration--uncovered five step-wise stages of decline:

Stage 1: Hubris Born of Success

Stage 2: Undisciplined Pursuit of More

Stage 3: Denial of Risk and Peril

Stage 4: Grasping for Salvation

Stage 5: Capitulation to Irrelevance or Death

By understanding these stages of decline, leaders can substantially reduce their chances of falling all the way to the bottom.

Great companies can stumble, badly, and recover.

Every institution, no matter how great, is vulnerable to decline. There is no law of nature that the most powerful will inevitably remain at the top. Anyone can fall and most eventually do. But, as Collins' research emphasizes, some companies do indeed recover--in some cases, coming back even stronger--even after having crashed into the depths of Stage 4.

Decline, it turns out, is largely self-inflicted, and the path to recovery lies largely within our own hands. We are not imprisoned by our circumstances, our history, or even our staggering defeats along the way. As long as we never get entirely knocked out of the game, hope always remains. The mighty can fall, but they can often rise again. ... Read more

Reviews

Neither good nor great, May 28, 2009
Let me preface this review by saying that I am a fan of Collins' earlier work. Built to Last was a great book, and Good to Great was very good. How the Mighty Fall, however, is neither. The issue of corporate failure is critical, particularly in the current downturn. Unfortunately, the core of Collins' analysis in this book is flawed.

How the Mighty Fall addresses two related questions: Why do good companies fail? and how does management respond once a company gets into trouble? Collins introduces a five stage model to answer these questions, where steps one and two address the roots of corporate failure and steps three through five managements' response.

Collins' analysis of management response to decline--denial of risk, grasping for salvation, and capitulation to irrelevance or death--accurately describe how leaders respond to deterioration in their business. This analysis here is solid, the writing clear, and the tempo brisk. Collins does a particularly good job of describing dysfunctional leadership behaviors of companies is in decline.

Collins' analysis of why companies get into trouble in the first place is much less compelling. Companies fail, according to Collins, when success breeds managerial hubris, which leads to overreach and ultimately failure. Like many of Collins' findings, this makes intuitive sense. Unfortunately in this case, his core argument runs counter to research on hundreds of companies, conducted over decades by dozens of scholars. There are two major flaws in Collins argument.

First, he claims that companies get into trouble because they overreach and expand beyond their core. This is consistent with data showing that diversified companies trade at a discount to focused rivals. Recent research published in the Journal of Financial Economics and the Journal of Finance has established that the companies often diversify to escape decline in their core business. Overreach is a symptom--not a cause--of decline and thus cannot explain its roots.

Second, Collins ignores a rich body of research that finds decline sets in not because companies stray from their core, but because they stick too close to it. Clay Christensen's research on disruptive technology, for example, demonstrates that companies stumble when they stay too close to their established customers and fail to serve emerging segments. The competency trap literature finds that companies get locked in by what they do well and struggle to adapt when circumstances change. Hubris and overreach, of course, play a role in corporate decline, but a well-established body of research suggests that they are rarely the root causes.

How did Collins, who does many things right in his research, get his core finding so wrong in this case? As always he tackles a big and important question, and his pairing of comparable companies is a sensible research design. His failure to read or acknowledge a rich body of previous research that bears directly on his research question, in this case, has led him to rather facile observations. In research, as in business, a lack of humility in recognizing the contributions of others can lead to overreach.

Honest Follow-up On Greatness, May 29, 2009
One thing that strikes me about Jim Collins' work is that he is passionate about what he does. He and his researchers dig down deep into companies and examine them from different perspectives over a period of time. As he says, "We do not decide which companies we 'want' to study... we lay out the criteria for the study-set selection before we see the data and systematically eliminate companies from consideration based on whether they meet the criteria." This has given him great insight into what success is, not just for corporations, but for any institution.

What comes through in his recent book, along with passionate study, is honesty. Collins previously chose Fannie Mae as a "Good to Great" institution. Recently, they have demonstrated anything but greatness in facing economic and marketplace changes. There are other companies he chose, like Circuit City, that have gone the same path. Collins discusses why these enterprises were chosen in his previous book and why they fell on hard times after once being great. Because a great company stumbles into mediocrity does not mean the criteria is flawed or the framework wrong. Rather, as the study shows, somewhere along the way these companies strayed away from what once made them great. "How the Mighty Fall" uses the same criteria from "Good to Great," only in reverse, to show how and why once great enterprises have fallen. Collins does this with the same attention to detail and passion as in his previous works.

There are a couple of parts that I found most interesting from the book. First is the chapter entitled "The Undisciplined Pursuit of More." The examples of Ames and Rubbermaid, along with the other ideas presented in this chapter, really hit home in light of recent developments in our financial markets. The second part is appendix 6 where he gives brief case studies on IBM, Nucor and Nordstrom using the "Good to Great" framework to demonstrate how they went from struggling companies back to greatness. I recommend this book to anyone who is interested in an honest assessment of either business success or success principles in general.

How the Mighty Fall, June 4, 2009
I am a huge Jim Collins fan. I really believe that Good to Great helped my company in many different ways. This book had some great information in it, but it could have been done in an article in a magazine. There is just not enough substance to fill an entire book. What is there is really important, but not much of it. In fact it seems like half of the book is appendix. I guess after Good to Great I expected more.

"Fire, Ready, Aim" Management Described, July 13, 2009
"Come, let us build ourselves a city, and a tower whose top is in the heavens; let us make a name for ourselves, lest we be scattered abroad over the face of the whole earth." -- Genesis 11:4

How the Mighty Fall takes a methodology similar to Built to Last and Good to Great and searches for differences among paired companies (Loser--Winner; A&P--Kroger; Addressograph--Pitney Bowes; Ames--Wal-Mart; Bank of America--Wells Fargo; Circuit City--Best Buy; Hewlett Packard--IBM; Merck--Johnson & Johnson; Motorola--Texas Instruments; Rubbermaid--None qualified; Scott Paper--Kimberly-Clark; and Zenith--Motorola) As you can see, it all makes for strange bedfellows (Motorola is on both sides of the divide and Rubbermaid doesn't have a winning comparison partner). As before, the analysis relies on public information from that period (such as annual reports, business journalism articles, and analyst reports).

From these data, Jim Collins discerns the following taxonomy of stages:

1. Hubris (excess pride) due to prior success
2. Undisciplined pursuit of more
3. Denial of risk and peril
4. Grasping for salvation
5. Capitulation to irrelevance or death

Reaching any one of these stages doesn't mean that stage 5 is inevitable in Collins' view.

The result is more like a monograph than a full business book with limited examples and observations. Many readers will find themselves hungering for more.

I was grateful to Mr. Collins for the excellent way that he defined and described his cases. As a result, I was able to look into what he was measuring to see what else might be there.

I had the good fortune to work with most of these companies as a consultant either just before or during the measurement period. As a result, I was able to think about what people inside the company had told me at the time about what they were doing and why they were doing it as well as what I observed about how they went about doing their work.

From those additional perspectives, I thought there were some other lessons:

1. Capable continual business model innovators (Kroger, Pitney Bowes, Wal-Mart, Wells Fargo, Best Buy, IBM, TI, and J & J) outperform those who mostly try to make old business models more efficient and effective.

2. Companies are more likely to try to do too much and swerve off in weird directions because the CEO feels insecure (Addressograph, Ames, Bank of America, Merck, Motorola, Scott, and Zenith) compared to a predecessor and the predecessor's track record (or a competitor CEO and that CEO's track record) rather than because of excess pride.

3. Denial of risk and peril arrives long before the company's performance peaks (Addressograph, Ames, Bank of America, Circuit City, Motorola, Scott, and Zenith). It just shows up as a problem later after a change in the environment causes the company to be exposed to worse results because of risk than before.

4. Ignorance about how to do big acquisitions successfully is rampant in large organizations (Ames, Hewlett Packard, Merck, and Motorola). Do a difficult large acquisition without understanding how to succeed, and you will probably fall flat on your face. Your stock will fall flatter than a pancake.

5. Pursuit of seemingly higher-growth markets is an irresistible lure for the portfolio-strategy-focused CEO (these names shall remain unidentified, but they know who they are) regardless of the real opportunity (think of the AOL-Time Warner merger).

This subject, I think, would be much better studied as a methodology by long-term tracking studies that include annual interviews and visits with a large number of competitors, customers, suppliers, and employees among the comparison companies. Perhaps someone from academia will move beyond the desire to write a quick case and do this kind of fundamental research to help answer the question: "How can we know when we are headed for a fall?"

Not bad, but so very thin (120 pages) and hurried, begs the question - WHY?, August 8, 2009
Not too bad a book. But... has a sort of hurried feel to it. Too thin, and the style is too reminiscent of "Good To Great", but without the details of the former. Almost like a movie trailer trying to pass as the movie itself. 120 pages of content, and 100+ pages of appendices and notes and index. Come on... this is just not done, Mr Collins, and certainly not expected from someone like you.

There is a great opportunity for making this book truly great when Collins quotes Tolstoy's novel Anna Karenina.
__"All happy families are alike; each unhappy family is unhappy in its own way." ... I've concluded that there are more ways to fall than to become great. [page 19]

But that's pretty much the start and end of any attempt to move the book from mediocrity to good, let alone great.

According to Collins, companies that fail tend to follow five stages of decline. Companies can fall one or more levels and still recover, but many keep sliding from one level to another, their descent punctuated only by frantic efforts at reorganization, rapid-fire change in leadership, random changes in the business model, brutal layoffs, and more.

The five stages are:
Stage 1 - Hubris Born of Success.
Stage 2 - Undisciplined Pursuit of More.
Stage 3 - Denial of Risk and Peril.
Stage 4 - Grasping for Salvation.
Stage 5 - Capitulation to Irrelevance or Death.

Companies can seem to be in rise even as they go through stages 1, 2, and 3. Decline visible to world, seems to occur only at stage 4, at which point most companies will inevitably slide down further and further. The book's first half is all about these five stages.That is all of 124 pages or so. Yes. 124 pages of large type on paper size that is smaller than most paperbacks. The next 90 pages are notes and appendices for each section. 29 pages of notes, the rest are appendices. So, if you skip the references and notes and all, as most people do, you could be done reading the book before you are halfway on a flight from Seattle to San Jose.

__"Packard's Law states that no company can consistently grow revenues faster than its ability to get enough of the right people to implement that growth and still become a great company. ... (We named this law after David Packard, cofounder of HP, inspired by his insight that a great company is more likely to die of indigestion from too much opportunity than stavation from too little.) "[page 55]

This book needed to have covered new ground, or in a different way, or should have insights that would have been illuminating. It is none. Some of the material, especially on people and bureaucracies, is indeed timeless, and useful, but he has covered that to some extent in Good to Great: Why Some Companies Make the Leap... and Others Don't. If you have not read that book, then this book is useful enough. When comparing or contrasting two firms that went to a particular stage, and one recovered and the other did not, you don't really get any insight. The example of TI and Motorola is one. Or that of IBM and HP. HP seemed to have gone down the tube under the leadership of Carly Fiorina, but has been on the mend with its new CEO, Mark Hurd. Was the acquisition of Compaq all that big a failure as is made out to be? What was it that HP did to come back from the brink? TI does not seem to be doing too well these days. The leadership is the same. What changed?

Collins does seem to recognize the impreciseness of such studies though.
__"If we could conduct double-blind, prospective, randomized, placebo-controlled trials, we would be able to create a predictive model of corporate performance. But such experiments simply do not exist in the real world of management, and therefore it's impossible to claim cause and effect with 100-percent certainty." [page 17]

Collins has written a lot about the importance of people in organizations. And this book is no different. People can and do make or break companies.
__"You break Packard's Law and begin to fill key seats with the wrong people; to compensate for the wrong people's inadequacies, you institute bureaucratic procedures; this, in turn, drives away the right people (because they chafe under the bureaucracy or cannot tolerate working with less competent people or both); this then invites more bureaucracy to compensate for having more of the wrong people, which then drives away more of the right people; and a culture of bureaucratic mediocrity gradually replaces a culture of disciplined excellence. When bureaucratic rules erode an ethic of freedom and responsibility within a framework of core values and demanding standards, you've become infected with the disease of mediocrity." [page 56]

Perhaps the answer to the question as to why this book has such a hurried feel, and why it feels so 'lightweight', even for a pulp-management title, lies on page 118, where Collins writes:

"While working on How the Might Fall, my colleague Morten Hansen and I have been simultaneously working on a six-year research project to study companies that grew from vulnerability to greatness..." [page 118]

An unwitting self-example for how "mighty fall", June 10, 2009
In a very pithy book, Collins tries to expand on his earlier books Good to Great: Why Some Companies Make the Leap... and Others Don't and Built to Last: Successful Habits of Visionary Companies (the second one being my favorite) by focusing this time on how once-great companies fail. As academically interesting as the premise sounds, the execution, unfortunately left a lot to be desired. The end product - what could have been an appendix in the second book (Built to Last) ended up as this book. That is despite the research backing the "book" - more than half the book is appendices and notes (the book is oddly organized in that, there are no chapter numbers, making it difficult to locate the notes using the subscripts alone).

To his credit, Collins emphasizes early on that his method cannot help in developing predictive models, but potentially can provide enough understanding to develop early warning systems (this was one of my main complaints of his earlier book). The explanation of the use of evidence collected chronologically so as to limit hind-sight bias is also interesting. While none can argue that the abstracted stages of failure aren't reasonable, establishing casuality is still an issue, and for the dedicated Collins reader - it is hard to justify investing in this book if you've the earlier ones. There is "new" spin or material, but certainly not worth investing as a separate book.

A focused, clear and actionable look at the cycle of corporate demise, May 28, 2009
Jim Collins has already written some of the seminal works on business strategy and management with Built to Last and Good to Great. While those books are great, How the Mighty Fall a short eclipses them in my opinion, its stated as a focused side project and it stays just that focused at about the right length and tone.

My recommendation is simple: get this book, read it, reflect on it and see where you stand. This is an example of what a five-star business book should be.

Why? Well the answer is simple, its well researched, clearly written, devoid of significant pontification and provides advice that everyone can use. While these factors were present in Collins other works, they were not so to this degree.

Here is what I mean.

Good to Great provides the characteristics of great companies in terms of some simple to remember characteristics, for example, level 5 leadership. These characteristics in good to great described what executives aspired to become. That aspiration is born out of executive desire to be successful. That led to many people seeing themselves as having these characteristics when clearly they did not. When Good to Great came out I cannot tell you how many executives I met with you said that they were or aspired to be level 5 leaders when the best they could manage was 1 and 3/4s. We all want to see ourselves as successful and that undermined the applicability of the Good to Great ideas.

Not this book. How they Mighty Fall clearly describe five stages of enterprise failure and distress. Because no one wants to be them, the guidance these stages provide create an environment for real discussion about the company rather than self-reflective revisionism on how we are great. That clarity, which supports the Good to Great principle of "Confront the Brutal Facts," is what sets this book apart. It should a design principle for Collins current project on managing in turbulence.

The five stages all describe the antithesis of the Good to Great concepts, which is ok, but the book is more than just inverting good to great - it looks beyond that.

Stage 1: Hubris born of success - describing the cultural tipping point when hard work and focus to earn the business turns into a sense of entitlement to future success. This is the death of Level 5 Leadership.

Stage 2: Undisciplined pursuit of more - building from stage one is people chasing goals that take them away from their core, their competitive advantage all in the name of growth, or the grand strategy. This leads to thinking what before you think about who and abandoning the hedgehog concept in favor the rabbit's pursuit of quick gains.

Stage 3: Denial of risk and peril - now that you are chasing things that are not part of your core, you fail to see the problems or blame the problems on the outside world. In this stage you are blind to the brutal facts.

Stage 4: Grasping for salvation - often in the form of the silver bullet, visionary leader all of which keep your attention away from the core (Flywheel) and lead you into further decline. I lose a culture of discipline, abandong the flywheel and chase things outside the core.

Stage 5: Capitulation to irrelevance or death - the final demise when people throw in the towel and the cause is lost. This is the terminus of the lifecycle and the one place you cannot recover from.

Rather than re-write the book here are what I see as strengths and challenges

Strengths

Well researched and more importantly Collins makes key elements of the research process, scoring models and approaches visible to the reader. This is a piece of work that says see what I did so you can have confidence in the results - a true example of a well-done book.

Case studies that go beyond those done in Good to Great and Built to Last. This broadens the range of examples, a good thing. But there are still a number of repeats here.

Clear writing, the book is focused neat and trim. Sure its short, the book is physically small and the core text is only 123 pages, but each page is loaded with content. I read the book on two 90-minute airplane flights and will come back to it time after time.

Clearly structured and summarized information, which makes the book very usable. This is seen in the way Collins uses tables - sparingly but when needed and other summarization techniques.

Challenges

Descriptive without being prescriptive, which is a strength, but people looking for recipes to avoid failure - ala silver bullets - will not find them and for good reason - chasing them is a characteristic of stage 4. But some people will see this as a weakness. People who reflect on the book's principles will come up with more than enough things to take action.

Repeats some of the prior books concepts and precepts. This makes it seem a little repetitive in places and can lead the reader to think that this book is just the photographic/cognitive negative of Good to Great.

Takes the easy road in a couple of places use well-worn examples - IBM, the Challenger, among others where deeper or new analysis would be helpful.

Overall the best book so far for 2009 - it is well worth the read, the time and spreading the news.

Not Great, not Built to Last, July 7, 2009
No doubt that Jim Collins is a master of his domain. Good to Great and Built to Last will forever be some of the best books on business and industry ever written. Unfortunately, this one won't join those ranks.

How the Mighty Fall a decent read. It follows the same style that Collins used in his other books. However, it fails to go deep like the others did. Your first sign of this is the small number of pages in this book. Only 150-ish pages before 100-ish pages of appendices. This is a book that can be read in an afternoon.

He picked great companies to profile and contrast, he points out interesting things, but he just doesn't take it home. I believe that the book was rushed to print to hit the market during one of the greatest economic stumbling blocks in American history. Had he not rushed to finish the book I think we would have seen some incredibly interesting, in depth analysis.

If you are a Collins fan, read this book but with low expectations. If you are new to his work, understand that he can do so much more than what he has here.

Resembles the 2003 book "Why Smart Executives Fail", July 13, 2010
Both the 2004 Sydney Finkelstein book "Why Smart Executives Fail" and the 2009 Jim Collins book "How the Mighty Fall" carry a similar message, and even share several of the case studies.

The Finkelstein book's chapters on "Seven Habits of Spectacularly Unsuccessful People" and the concluding "How Smart Executives Learn" are real gems. The 2007 Douglas Hubbard book "How to Measure Anything" supplements the "How Smart Executives Learn" chapter by suggesting ways that top executives can be trained to more accurately assess risk.
Jim Collin's table of "Leadership Team Dynamics: On the Way Down versus On the Way Up" is also particularly good.
My conclusion would be that the (longer) Finkelstein book seems to include many more practical guidelines as to ways of fixing what is broken, rather than merely concentrating on how to detect what is broken. But Collins points out that "Any exceptional enterprise depends first and foremost on having self-managed and self-motivated people .. who accept responsibility, (then) you don't need to have a lot of senseless rules and mindless bureaucracy". And his Appendix 5 on What makes for the "Right People" is also a gem.

Although the books don't phrase it this way, maybe the easiest criteria for predicting success or failure is worldview -- "zero sum gain, divide and conquer, winner takes all" versus "Openness and Diversity", "Great Leader says" vs. "Teamwork and Diversity". "Zero sum gain" means that if the directors want more money, they need to screw their employees and their customers. Think about it. Such a "zero sum gain, winner takes all" mentality is not sustainable. There's a limit to how far you can screw your employees and your customers. The opposite of the "zero sum gain" model is the "goodwill" model -- i.e. "a good team with diverse talents can be worth far more than the sum of its parts. This is the same model as the surgical team model in Frederick Brook's "Mythical Man Month".
Two of Japan's most famous turnarounds are Nissan and Sony -- and both picked non-Japanese as their CEOs. The Nissan site showcases the need for diversity -- and explains why it makes good business sense. Sony also promotes diversity.

The D. Sull review claims that "Collins introduces a five stage model to answer these questions, where steps one and two address the roots of corporate failure and steps three through five managements' response". But these five stages are "Five Stages of Decline" rather than stages one and two being "Root causes of corporate failure" and stages three through five being "Management's response".

The D. Sull review also claims that "There are two major flaws in Collins' argument:" First, he says that Collins "claims that companies get into trouble because they overreach and expand beyond their core". Second, he says that Collins "ignores a rich body of research that finds decline sets in not because companies stray from their core, but because they stick too close to it". But -- as other people have pointed out -- Collins' key point is that companies start to lose control when they no longer have the management talent to continue to be excellent in what they do. This may be because they try to grow too fast, or because they make "undisciplined leaps into areas where they cannot (realistically) be great".

Can I interest you in an Impala?, May 2, 2010
When General Motors was on the cusp of failure late last year, it was my belief that we should go ahead and let the company fail. The risk-reward function of business, the philosophical underpinning of why people go into business, was at stake here. If we bailed out the company, we were merely rewarding the countless number of decisions that were made over the past 100 years by company executives and their union partners. The decision to price themselves out of the marketplace, the decision to continue building cars that people didn't want or that the marketplace couldn't support, and the inability to read the future and make adjustments were made by countless executives over the years, but with little consequences. Failure to grow and expand and make a profit one year was rewarded by outlandish executive pay and bonuses only a couple of years later when things seemed to have turned around. But, digging deeper, one may have found the five stages of failure that Jim Collins outlines in his latest book, How the Mighty Fall and Why Some Companies Never Give In (Harper Collins, 182 pages). Collins is well-known for his national bestsellers Good to Great and Built to Last and is known for backing up his books with a vast array of research and sound numbers. Collins can be found working at his management laboratory in Boulder, Colo. and holds degrees in business administration and mathematical sciences from Stanford University and honorary doctoral degrees from the University of Colorado and the Peter F. Drucker Graduate School of Management at Claremont Graduate University.

Very quickly, Collins jumps to a five-stage process of failure among the great companies and provides plenty of analysis and examples. Everyone from Motorola to Newell to Zenith is looked at, and we get a clue into why some of them failed while others succeeded, despite some pretty daunting odds.

The federal government came to the rescue of GM, along with a host of other financial institutions. We will argue for a generation of the value and worthiness of that rescue and whether it should have happened. Collins doesn't get into the proposition of whether failure of the biggest companies is a good idea or not; he does, however, deconstruct past failures and give us the warning posts to look for.

Collins' style is methodical and easy to read. I read this book in a weekend, and he laid it out very clearly. So, what are the five stages and what do they look like?

Stage 1: Hubris Born of Success. Great enterprises can be insulated by success. They succeed in spite of themselves, and they become arrogant with the idea that they cannot fail. Those looking at them from the outside see a company that has the "golden touch." Luck, chance and big gambles are part of this stage. Some companies stay with one great idea and never evolve.

They relish their Stage 1 successes and try to live off that greatness. Collins says these companies must take the company off autopilot and "exit definitively or renew obsessively, but do not ever neglect a primary flywheel." This means you have to be careful to recognize what got you to the dance. Once on the dance floor, it is ok to try new moves, but always remember that fundamental step you learned that first day of dance class. That step, that move, was how you got on the dance floor in the first place.

Stage 2: Undisciplined Pursuit of More. Hubris from stage 1 leads right into stage 2 - undisciplined pursuit of more and more. This is the opposite of complacency. The attitude is that we can do anything, and nothing can stop us, so let's pursue projects and ideas that we really have no business going after.

Companies can continue to grow without understanding the "why" of their growth - pursuit of more. That is the American birthright and, in fact, some would argue, institutionalized in the Constitution. Collins argues that companies that pursue for the sake of pursuing don't necessarily survive. It is one thing to set goals that one is going to grow and achieve, but then, that is merely activity. What is the quality of that growth, and is it sustainable? I have seen it myself working in municipalities and other organizations. Communities grow for the mere sake of growing. They continue to build without regard to whether the growth is sustainable and if the community can survive. Why? Because of the effects of Stage 1. "We are the best! No one can stop us because we are who we are."

Pursuit of growth isn't necessarily bad, according to Collins, but the "undisciplined" pursuit of growth can lead to major issues for longevity. Collins invokes Packard's Law, which states, "No company can consistently grow revenues faster than its ability to get enough of the right people to implement that growth and still become a great company." The law, named after David Packard, one of the founders of Hewlett-Packard, provides the ultimate guide in growth. Are the right people in the right seats? One person who advises me regarding our own organization asks the question this way, "Is everyone on the team an `A Player'?" If there are "B Players", you need to move them up to an A. If they are a "C Player," they need to think about leaving...and soon.

Stage 3: Denial of Risk and Peril. Although data is clear, it is explained ambiguously at best. Information is explained away as "cyclical," "temporary" or "not that bad." Bad news is spun to look at the positive. It seems no one wants to be responsible anymore. Constant denial launches companies into projects and programs that steer them headlong into Stage 4.

How many financial services companies and banks fell into this trap over the past several years? Buoyed by hubris (Stage 1) and undisciplined pursuit of more (Stage 2), big companies, the ones too big to fail, repeatedly ignored the signs of impending doom and failure. We have lived this during the recession of the past year, and it has not only hurt the companies, banks and financial institutions that practiced these poor habits, they took the entire economy down with them.

Stage 4: Grasping for Salvation. All the denial that occurred in Stage 3 has now manifested itself in Stage 4 where the weaknesses and failures of the company are visible to all. "Saviors" come into play here; someone who will come in and appear to save the day with a bold new strategy, product or concept, but ultimately fails. Initial results are positive, but don't really take.

Remember the stories about "Chainsaw Al" who was to come and save the day at Sunbeam? Well, after a few blustery years, his personality was overcome by reality. The company was doomed to fail even with the savior having just walked through the door. You see this in politics and public life, as well. It reminds me of the sheriff in Arizona who requires his inmates to wear pink jumpsuits and does all types of unconventional things in the pursuit of his job. Is it to make headlines? Or does it really mean something that will be sustainable and worthwhile in the end? Those who will deny what is really coming through the door, are there for short-term successes and not long-term sustainability.

Stage 5: Capitulation to Irrelevance or Death. All the fancy efforts tried in previous stages, particularly Stage 4, are tried again and, after a while, people are either demoralized or the saviors of the companies sell out and head for the door. The company either becomes insignificant or dies a spectacular death publicly.

You can't get out of Stage 5, but you can come crawling back from the depths of Stage 4. Some have done it. IBM is an example. Will car companies like GM and Chrysler do it?

I have to admit, I have never read Collins' other books, but I am familiar with his concepts and ideas. What I do know about his work is that it is well-researched and well-documented. This book ends after 123 pages, and pages 128 through 182 are appendices and notes to the text. Over 80 pages of strong documentation and examples of research are supporting his ideas.

In the end, Collins argues that we all need setbacks, but the great companies who are not practicing or manifesting the five stages of failure can deal with these setbacks and bounce back. We all know people who have had significant setbacks and come back to be as successful as before or more successful than ever. I'm sure many are waiting to see if Tiger Woods can become that person who came from total and colossal failure in his personal life (assuming all the tabloid articles are true), and be, once again, at the top of the golf world.

Collins himself outlines the abject failures of what most would consider one of the most successful people of the 20th century, Winston Churchill. His decisions and failures leading up to World War II were well-chronicled and he was at once vilified and disdained as one who could not lead. Yet, in the throes of crises he stood up against the Nazis and unified a country. Churchill's core legacy was to never give in, and he never did. He never gave in; he just changed tactics. That, according to Collins, is the key to survival and success. Failure is only in the eye of the beholder.

Now, what will it take to get you into that Impala today? ... Read more

Editorial Review

Reviews

A sweet story that won't make you nuts..., November 25, 2010
As a lover of chocolate, I was instantly drawn into this book. This is the story of an English family (the Cadbury's) who strove to reconcile their religion with their growing business. Although Quakerism is discussed in the book, I strongly disagree with the previous reviewer that the book has too much information on the Cadbury's religion. Due to their beliefs, the Cadbury's were left with few options for a vocation in Victorian England. However, in spite of these barriers, they were still able to excel. To understand the Cadbury family you must understand their influences, and Quakerism was certainly a strong force in their life.

In writing this book, Deborah Cadbury seeks to tell the story of both her family's famous chocolate brand, and the rise of a global economy. While there is a fair amount of discussion about Quakerism in the book, this seems to stem from two reasons:

1) To understand the Cadbury's, their competitors, and their business decisions, one needs to understand the world they lived in, including their religion, and

2) Most people who read this book probably won't know much about Quakerism (much less 19th century Quakerism), and so some level of detail is needed.

As Ms. Cadbury points out, "Richard and George Cadbury's entire worldview was shaped by Quaker values." This affected such decisions as advertising (strongly discouraged), sources of cocoa (and the use of slaves), the development of a charitable trust, and key decisions that came about as a result of Quaker pacifism during World War I. Quakerism even had a role on American chocolate maker Milton Hershey. Although not a Quaker himself, he was influenced by the large Quaker presence surrounding his candy shop in Philadelphia.

Overall, I found this book a fascinating story of a family business that grew into a worldwide empire.

Interesting but lacks focus, December 11, 2010
I do think that Deborah Cadbury tries to write a definitive history of the chocolate industry. Sadly she doesn't quite achieve what she would like. For one thing she drifts back and forth between various subject matters like the importance of Quakerism and various scandals during the history of chocolate. Second, she can't seem to decide if she is writing a social history of chocolate or a corporate history of the Cadbury company. Lastly, her transition between various parties without giving them much by way of transition makes for a difficult read.

I greatly enjoyed when she wrote about the history of the chocolate industry and how it evolved from being one of chocolate drinks to being focused on the candies we now take for granted. Her history of the early days is quite fascinating and its evolution along with the emergence of American manufacturers is also quite interesting as well. The story does get bogged down by her relentless attempts to show how the Quakers made so many attempts at benefice but it does not help the story makes it weaker. A book about Quaker theories and dogma would have been one thing but as the author mentions that is not what Quakers are about.

This is an OK book but if written by someone with a stronger sense of the story it could have been a great one!

excellent, November 29, 2010
This book is excellent on several counts: in showing the attempt by Quakers to apply biblical principals to the real world of commerce over a period of two hundred years; in giving a succinct history of the evolution of the candy industry; and lastly in providing a pleasurable read in a well written format, Thank you Ms. Cadbury.

As a disclaimer I am a convinced Quaker small businessman.

far too much about Quakers, November 3, 2010
This could have been an interesting history of chocolate and competing chocolate companies, but there is far too much reference to Quakers. I'm interested in Cadbury's chocolate, not his religion. ... Read more

Editorial Review

"This is not a book about charismatic visionary leaders. It is not about visionary product concepts or visionary products or visionary market insights. Nor is it about just having a corporate vision. This is a book about something far more important, enduring, and substantial. This is a book about visionary companies." So write Jim Collins and Jerry Porras in this groundbreaking book that shatters myths, provides new insights, and gives practical guidance to those who would like to build landmark companies that stand the test of time.

Drawing upon a six-year research project at the Stanford University Graduate School of Business, Collins and Porras took eighteen truly exceptional and long-lasting companies -- they have an average age of nearly one hundred years and have outperformed the general stock market by a factor of fifteen since 1926 -- and studied each company in direct comparison to one of its top competitors. They examined the companies from their very beginnings to the present day -- as start-ups, as midsize companies, and as large corporations. Throughout, the authors asked: "What makes the truly exceptional companies different from other companies?"

What separates General Electric, 3M, Merck, Wal-Mart, Hewlett-Packard, Walt Disney, and Philip Morris from their rivals? How, for example, did Procter & Gamble, which began life substantially behind rival Colgate, eventually prevail as the premier institution in its industry? How was Motorola able to move from a humble battery repair business into integrated circuits and cellular communications, while Zenith never became dominant in anything other than TVs? How did Boeing unseat McDonnell Douglas as the world's best commercial aircraft company -- what did Boeing have that McDonnell Douglas lacked?

By answering such questions, Collins and Porras go beyond the incessant barrage of management buzzwords and fads of the day to discover timeless qualities that have consistently distinguished out-standing companies. They also provide inspiration to all executives and entrepreneurs by destroying the false but widely accepted idea that only charismatic visionary leaders can build visionary companies.

Filled with hundreds of specific examples and organized into a coherent framework of practical concepts that can be applied by managers and entrepreneurs at all levels, Built to Last provides a master blueprint for building organizations that will prosper long into the twenty-first century and beyond.

Reviews

How to build it to last, March 15, 2002
Built To Last was an extremely thought provoking and eye opening read. Built To Last studies some of the most successful (called the leading companies) and the following companies (non-leaders in an industry). The research for this book produced surprising results for the authors (and the reader). The authors found the there were at least twelve commonly held businesses beliefs that their research refuted. In essence these dearly held business beliefs were myths.

Here is a look at each of the twelve myths and a sound byte describing each:

1. It takes a great idea to start a company Few visionary companies started with a great idea. Many companies started without any specific ideas (HP and Sony) and others were outright failures (3M). In fact a great idea may lead to road of not being able to adapt.

2. Visionary companies require great and charismatic visionary leaders A charismatic leader in not required and, in fact, can be detrimental to a company's long-term prospects.

3. The most successful companies exist first and foremost to maximize profits Not true. Profit counts, but is usually not at the top of the list.

4. Visionary companies share a common subset of "correct" core values They all have core values, but each is unique to a company and it's culture.

5. The only constant is change The core values can and often do last more then 100 years.

6. Blue-chip companies play it safe They take significant bet the company risks.

7. Visionary companies are great places to work, for everyone These companies are only great places to work if you fit the vision and culture.

8. Highly successful companies make some of their best moves by brilliant and complex strategic planning. They actually try a bunch of stuff and keep what works.

9. Companies should hire outside CEOs to stimulate fundamental change Most have had their change agents come from within the system.

10. The most successful companies focus primarily on beating the competition. They focus on beating themselves.

11. You can't have your cake and eat it too. Decisions don't have to either or, but can be boths.

12. Companies become visionary primarily through "vision statements". Vision is not a statement it is the way you do business.

I would recommend this book to anyone engaged in developing and running a business at any level. If you want to design, build and run a lasting enterprise this book has some ideas and insights worth exploring.

Unprecedented, Compelling, Well-Researched, July 27, 1997
"Built to Last" is one of those rare non-fiction books you just can't put down. Unequivocally the best "business" book I have ever read, "Built to Last" by James C. Collins and Jerry I. Porras is a compelling, thorough, well-written, unprecedented look at what it takes to "create and achieve long-lasting greatness as a visionary corporation." Unlike many current "trendy" management and "business success" books out on the market, Collins and Porras differentiate "Built to Last" by using their own six-year comprehensive, well-documented research study as the basis for further analysis.

What separates "Built to Last" is that each visionary company (3M, HP, Procter & Gamble, Wal-Mart...) is contrasted with a comparison company founded in the same time, in the same industry, with similar founding products and markets (Norton, TI, Colgate, Ames...). Perhaps what I found most intriguing were some of the twelve "shattered myths" they go on to counter throughout the book:

1. It takes a great idea to start a great company
2. Visionary companies require great and charismatic visionary leaders
3. Visionary companies share a common subset of "correct" core values
4. Highly successful companies make their best moves by brilliant and complex strategic planning
5. The most successful companies focus primarily on beating the competition

As a current business student with a summer internship in a "visionary company," I was amazed as their careful analysis rang true. This is one book I can highly recommend to any student, professional, or business educator looking for those not-so-subtle traits that characterize a truly visionary company.

Read this along with Good To Great, March 13, 2004
This book will show you how to take your business from just average to great but even more importantly, make it last. Built to Last is a must read for all business people. Read this right along with Good To Great and Double Digit Growth.

Take your company to unequaled growth and leave a legacy.

A Great Book with a Flaw, January 31, 2005
This book reminds me of the hero in the classic Greek tragedy. The hero is always magnificent, but has a tragic flaw. This is a magnificent book with a tragic flaw.

Porras and Collins set out to write a book about visionary companies, and they did just that. They chose the companies they would study based on specific, detailed criteria.

They wanted to study companies that had been premier institutions in their industries and widely admired while they made an imprint on the world around them. They wanted their companies to have multiple generations of chief executives and to have gone through multiple product or service lifecycles. And they wanted the companies to have been around for a long time - founded before 1950.

They compared each of their visionary companies with another company that was not a premier visionary company. Many of the comparison companies were solid performers. They were good companies, but not great companies. That's one of the great things about the book. You can see the distinction between good performance and great performance.

Another thing that makes the book great is the extensive research. The project took six years, and the authors and their research team dug into critical issues and came up with fascinating insights and comparisons.

Read this book and you will learn about the characteristics of great companies that have an impact on the world around them. The discussions will enrich your understanding of what makes a great company. This will be especially valuable to you if you're in the process of building a company that you want to be great.

That's the great part, the hero part. What about the flaws?

The first flaw is that essentially performance for each of these companies is equated with market performance. There are lots of things the authors could have used, such as return on assets, for example. But share price is easy to track over time and is used as a surrogate for greatness. I'm not sure that that's the best criterion.

What you are actually reading about is a selection of excellent, visionary companies that were perceived as good investments by the market. This "perception" issue is not addressed in the book.

The second flaw is more important. While this book tells you marvelous things about companies that are admittedly great and about some of the things that make for greatness in companies, and while it mixes statistical data with telling anecdotes, it falls short in one critical area. The book doesn't tell you anything about how to achieve greatness.

In other words, it describes what greatness might be and it gives you some examples of companies who have achieved it, but the book ultimately left me with the nagging desire that the authors would have given me some "how to." As far as you can tell from reading the book, these companies were always great.

That may not be a problem for you if you're just starting a company. You've got a clean slate to start from. But if you're guiding an already-established company, or a part of it, I think you'll wish for a few examples of companies that became great after performing at some lesser level.

That's the bottom line in my recommendation. If you're looking for a book that describes greatness and where you'll pick up a wealth of ideas and good historical knowledge about great companies, buy this book. If, on the other hand, what you want is a book that describes in some detail how to achieve that greatness, this may not be the book for you.

solid yet pedestrian, like lots of businesses, June 6, 2002
As I dutifully plow through the currently popular business books - and I read only the ones that I need rather than for pleasure - I occasionally find a good and (fairly) interesting one. This is one of those books I would recommend. Instead of overflowing with ridiculously florid rhetoric about recycled banalities and excitement that is simply not justified, this book is based on solid research and is not afraid to offer un-spectacular advice.

It is about what the authors call "visionary companies," which stand for something beyond just making money and yet are profitable. They do well, and they do good. There is no doubt that such companies exist, which I admit in spite of my boredom and cynicism regarding most of the businessmen and "business intellectuals" that I deal with as a writer.

Set up like an academic study, the book is a synthesis of the authors' findings while taking a long historical view of consistently excellent (i.e. "visionary") companies like H-P, Merck, and P&G.

Not surprisingly, these companies do similar things: 1) they have visions and value that they try to uphold consistently throughout the company and to which they stay true over decades; 2) the set incredibly ambitious (and in retrospect realistic) goals that inspire their employees ("big hairy ambitious goals"); 3) they are cult-like in their beliefs in themselves; 4) they allow for trial and error, which lead to "evolutionary progress"; 5) they hire leadership from within; 6) they cultivate keeping their employees a bit off-balance ("uncomfortable") as a way of getting them to perform at their best; 7) they make sure that all elements work in concert and are internally consistent and self-reinforcing ("alignment").

That is it for the ideas, which are far more nuanced than the above paragraph. They could be summarized in one chapter, and the rest of the book is repetition and analysis by example. The examples are interesting and informative and the ideas, which have all been said before, are good to review in a systematic way. Very good.

These are good and useful ideas, if somewhat banal. But then, doing business is rather dull for the most part - there are very few exciting companies out there, but most of them are like horribly dysfunctional families. This is the authors' bid to explain the good few.

The tone of the book is rather modest, but the authors do get a bit too wordy and chummy in many instances. While I liked the modesty, I got bored with the chumminess.

Recommended.

New insights on growth for people and organizations, January 3, 2000
If you invested in a general market stock fund, or a comparison company, and a visionary company January 1, 1926 and reinvested dividends, a $1 in the general market fund would have grown to $415; not bad. Your $1 investment in the comparison companies would have grown to $955 (twice the general market). But your investment in the visionary companies would have grown to $6,356, six times greater than comparison companies and fifteen times greater than the general market.

The "visionary" companies: 3M, American Express, Boeing, Citicorp, Ford, GE, Hewlett-Packard, IBM, Johnson & Johnson, Marriott, Merck, Motorola, Nordstrom, Philip Morris, Procter & Gamble, Sony, Wal-Mart, Walt Disney.

Enduring companies grow because they concentrate on being a great organization, not because of an original idea for a product or service. A lasting, core ideology is the driving force behind a visionary company; not culture, strategy, tactics, operations or policies. Core values are simple, clear, straightforward beliefs of unchanging, fundamental values such as The Golden Rule, but core values differ widely. They are the basic reason for existence beyond just making money. Visionary companies concentrate on building an organization rather than implementation of a great idea, charis-matic leadership, or wealth accumulation. The authors call it "clock-building" rather than "time-telling."

Growth favors the persistent but persist in what? They never give up on the company, but drop losing ideas, adopt winning ideas and along the way, try many ideas to find winners. But it's the company, not the idea. Most revealing was the extraordinary fact that visionary companies can live with contradictory ideas and forces at the same time. They don't accept an A or B concept, for example, that there must be either stability or change. They do both at the same time, all the time.

This is a rare, difficult trait. The book aptly quotes F. Scott Fitzgerald: "...first rate intelligence is the ability to hold two opposed ideas... at the same time.. . and still function."

The profit myth. Visionary companies are more idealogically-drlven and less profit-driven than comparison companies. Of course they pursue profit, but they do both. More importantly, their values don't shift with the times, or changing markets.

As the authors reel off the rather obscure names of heads of visionary companies (and their personality traits), clearly they aren't charismatic leaders, but perhaps better described as "architects." People have always harbored a deep need to be assured that someone or something must have it all figured out; God must have made it that way. Not so with visionary companies. Things are the way they are because the founders created an evolving, changing process for selecting what works and doesn't work. And these visionary companies continue to come up with a stream of successful products and services.

Other shattered myths. Playing it safe: They make bold, risky commitments and make them work most of the time. A great place to work: You fit and flourish or hate it and leave. Brilliant strategic planning; Best moves are made by trial and error. Beating competition: They concentrate on beating themselves. They believe in home-grown management; promotion from within. The authors conclude that new ideas will become obsolete faster than ever before, therefore corporate success must be ideological and provide common bonds of values, beliefs and aspirations.

This is a landmark book. It goes beyond corporate concepts and provides new insights on growth for individuals, groups or organizations.

Vision = Core Ideology + Envisioned Future, February 6, 2002
James Collins is a management researcher from Boulder (Colorado) and Jerry Porras is a professor of organizational behavior and change at the Stanford Graduate School of Business. This book is really split up into three parts: (1) An introduction into the research.; (2) The core ideology of visionary companies.; (3) The habits of visionary companies; (4) Methods for implementation.

The authors explain their research methods of this six-year research project into visionary companies. "Visionary companies are premier institutions - the crown jewels - in their industries, widely admired by their peers and having a long track record of making a significant impact on the world around them." The authors used the term 'visionary', rather than just 'successful' or 'enduring', to reflect the fact they have distinguished themselves as a very special and elite breed of institutions. In order to compose these visionary companies the authors started with a set of criteria which those companies had to meet: (1) Premier institution in its industry; (2) widely admired by knowledgeable businesspeople; (3) made an indelible imprint on the world in which we live; (4) had multiple generations of chief executives; (5) been through multiple product (or service) life cycles; (6) founded before 1950. With these criteria in mind the authors select 18 visionary companies from a wide range of industries, plus 18 comparison companies (which are not weak or bad companies either).

So what do these visionary companies have in common? They have core ideologies consisting of more than a bunch of nice-sounding platitudes. A visionary company's core ideology consists of core values ("The organization's essential and enduring tenets") and purpose ("The organization's fundamental reasons for existence beyond just making money"). But the authors comment that ocre ideology alone cannot make a visionary company. Ultimately, a visionary company is build up from a core ideology complemented with a drive for progress and a preservation of the core complemented with a stimulation for progress.

The authors then turn their attention to the specific methods of preserving the core and stimulating progress that distinguishes visionary companies from the comparison companies. They split these methods up into: (1) Big hairy audaciou goals (BHAGs) ("Commitment to challenging, audicious goals and projects toward which a visionary company channels its efforts."); (2) Cult-like cultures ("Great places to work only for those who buy in to the core ideology; those who don't fit the ideology are ejected like a virus (preserves the core)."); (3)Try a lot of stuff and keep what works ("High levels of action and experimentation that produce new and unexpected paths of progress and enables visionary companies to mimic the biological evolution of specias (stimulates progress)."); (4) Home-grown management ("Promotion from within, bringing to senior levels only those who've spent significant time steeped in the coe ideology of the company (preserves the core)."); and (5) Good enough never is ("A continual process of relentless self-improvement with the aim of doing better and better, forever into the future (stimulate progress).")

In the final chapters the authors provide a summary of the book, which they refer to as the vision framework: Articulating a vision = core ideology (core values and core purpose) + envisioned future (10 to 30 year BHAG and vivid descriptions). There are also some tools to create all these items in this framework. In this 3rd edition there is also 'a message for the new economy' in which the authors conclude that the dot-com craze is based on 'Built to Flip' and not 'Built to Last' ideas. They provide some questions for to check whether your organization is built to last or built to flip. This chapter is a waste paper.

This is a good book into the habits of successful companies, although the habits are somewhat 'soft', and difficult to implement in existing companies. The biggest criticism McKinsey & Co had on this book: "We really love 'Built to Last' here, but unfortunately it's useless. ... all the companies in 'Built to Last' were always great. They were never average. But that's most of the world." As an reply to this criticism Collins has recently written 'Good to Great: Why Some Companies Make the Leap ... and Others Don't' (2001). My greatest criticism on this book is the amount of repetition and therefore I recommend others to go for the e-articles 'Build Your Company's Vision' and 'Turning Goals into Results', both by the authors of this book. I also recommend Jim Collins' latest article 'Level 5 Leadership' (2001) which is based on his latest book 'Good to Great'. This book is written in simple US-English.

A huge business hit of the early 90s that has aged pretty well, September 11, 2006
This is one of the business classics in the past twenty years. It has sold a huge number of copies and I am sure many of those purchased copies were actually read! As impressive as its sales numbers have been, the way it has affected the approach to the way business was discussed and talked about for the past dozen years has been even more impressive.

Yes, there are always newer fads and business is subject to fads more than most fields of human endeavor. There are lots of theories about why this is so, but it might have something to do with the new managers coming in wanting to bring something new with them and so the previous guy's stuff is no good. Hence, something comes and something goes for reasons beyond its ability to run business in a sound and profitable way. However, when something comes along with some real substance it spreads and lasts, at least for awhile. The ideas of core values and big (hairy audacious) goals hit a chord and lasted. Of course, today they are part of the air businesspeople breathe rather than a quote from this book.

The authors looked at a number of big companies and found a list of those that had been around a long time, been financially successful, and were on a roll at the time of this book (but they don't say this is one of their criteria). They also found some comparable big company that hadn't found the level of success of the "visionary company" as they call the successful firms. They then looked for some traits common to those big successful companies that might explain their success.

The four big principles they came up with were: 1) Be a clock builder - or architect - not a time teller [once you read the chapter it will be clear], 2) Embrace the genius of the AND, 3) Preserve the core / stimulate progress, and 4) seek consistent alignment.

All this has to do with being opportunistic, building the organization that best supports the opportunities you are pursuing rather than letting the organization dictate what you pursue, that success requires doing seemingly contradictory goals simultaneously, making sure that the core culture gets preserved (if it has been a successful culture), and making sure that the whole process is focused on the core ideology - the core values and core purpose of the organization. Sounds simple? It's not. And even so, the "visionary" companies the book lauded a dozen years ago have all, or almost all, fallen on various levels of hard times since the book came out.

This fact is addressed in a soft way in the frequently asked questions addition for this paperback addition. There is also a new last chapter on building the vision and a section on questions for research (this acknowledges areas left unexplained by the book).

A book that has been this influential deserves your attention if you are interested in business literature. However, as with all of these books, use the principles as they apply to your real life in the real world of competitive business rather than treating them as some kind of final truth.

One of the most influencial business books I've read, March 11, 2003
As shared before, my review methodology is to give a book some time so I can accurately comment to the degree of which it impacted my life. In the case of "Built to Last," I am writing a review a full 3 years after completing this most excellent book.

I am not exaggerating, then, when I say that this is among a select group of the most powerfully influential business books I've read. There is something about the methodology, the way the conclusions are presented, that makes it stand out as an excellent read. The content is, as some would say, quite "sticky."

Take, for example, their selection criteria for what constitutes an "Visionary Company." The company had to be in business something like 60 years, so they can see how a culture had "outgrown" their genesis business model (think about that!!!). They had to be outstanding market leaders, so there is some tie to the bottom line, and so on. Personally, these metrics have become ingrained, such that I repeatedly find myself gauging where my organization is relative to these metrics.

Secondly, the book expands upon each attribute of a "visionary company," such as having "big hairy audacious goals (BHAG's)," or having what some call a "cult-like culture." Each section expands upon each with direct examples of how the identified companies espouse these attributes.

For example, there is much discussion on how firms such as Boeing is famous of undertaking aggressive projects (BHAG's), or how Nordstrom's culture is so powerful it's akin to oil and water (the right people just fit; the wrong people are self-ejected).

I have found it fascinating, however, to watch the featured companies since completing the book. HP, for example. Why in God's name would HP chose to get into the PC business? This barely appears to align with "The HP Way." And for a while it appeared that Boeing no longer attacked BHAG's when they rejected the notion of a super-sonic passenger airliner, although their involvement in the Joint Task Force Fighter project certainly appeared in-line with their culture.

Finally, I have noted many books whose authors were influenced by this book. Either the book itself was directly referenced, or the ideas were clearly gained from its reading. My recommendation: buy it and read it. I doubt you will ever forget it.

Deeper than business tactics, August 13, 2000
I'm not a business person, and don't willingly read business books. Yet this one has something to offer, even to me.

These boys go about their research with serious intellectual integrity -- willing to let the evidence destroy their hypotheses and starting over with new ideas -- they come upon some deep and important truths about leadership. For example: Preserve the core philosophy, hold all else loosely. Look for ways to replace "either or" with "yes AND" Be a clockbuilder, not a timeteller.

Among other ideas. I don't know if what is here is profound in the business world, as I don't exist in the business world. But it is often the simplest of simple truths -- the kind we tend to overlook.

I read this as part of a staff of a campus ministry, and found it definitely helpful. I think any leader of ANYthing will find it helpful. If I ever go into business, I'll come back to it. There are no "quick steps to success" or get-rich plans, there is simple a strong philosophy of business clearly expressed.

As I said, the boys have done their research, and are eager to show it. The book bogs down when they cite example after example of how their "visionary companies" have illustrated the concepts they are putting forward --proving to me that they're right, but testing my patience at the same time. ... Read more

Editorial Review

Strippers and Flippers . . . or a New Positive Force Helping to Drive the Economy . . .
 
The untold story of Steve Schwarzman and Blackstone, the financier and his financial powerhouse that avoided the self-destructive tendencies of Wall Street. David Carey and John Morris show how Blackstone (and other private equity firms) transformed themselves from gamblers, hostile-takeover artists, and ‘barbarians at the gate’ into disciplined, risk-conscious investors.
The financial establishment—banks and investment bankers such as Citigroup, Bear Stearns, Lehman, UBS, Goldman Sachs, Merrill Lynch, Morgan Stanley—were the cowboys, recklessly assuming risks, leveraging up to astronomical levels and driving the economy to the brink of disaster.
Blackstone is now ready to break out once again since it is sitting on billions of dollars
that can be invested at a time when the market is starved for capital.
 
The story of a financial revolution—the greatest untold success story on Wall Street: Not only have Blackstone and a small coterie of competitors wrested control of corporations around the globe, but they have emerged as a major force on Wall Street, challenging the likes of Goldman Sachs and Morgan Stanley for dominance.
 
Great human interest story: How Blackstone went from two guys and a secretary to being one of Wall Street’s most powerful institutions, far outgrowing its much older rival KKR; and how Steve Schwarzman, with a pay packet one year of $398 million and $684 million from the Blackstone IPO, came to epitomize the spectacular new financial fortunes amassed in the 2000s.
 
Controversial: Analyzes the controversies surrounding Blackstone and whether it and other private equity firms suck the lifeblood out of companies to enrich themselves—or whether they are a force that helps make the companies they own stronger and thereby better competitors.
 
The story by two insiders with access: Insightful and hard-hitting, filled with never-before-revealed details about the workings of a heretofore secretive company that was the personal fiefdom of Schwarzman and Peter Peterson.
 
Forward-looking: How Blackstone and private equity will drive the economy and provide a model for how financing will work. ... Read more

Reviews

A Captivating Read - I Finished It In a Day, October 6, 2010
My favorite Stephen Schwarzman story is a personal one. I used to work at Lehman Brothers as an investment banker. We were (of course) bookrunners on the Blackstone IPO, and as was typical for every other IPO, the management of the company comes and teaches our traders about the value of the company. They, in turn, go and pitch the stock to their clients.

Usually it's the CEO and CFO of a company generating about $20mm of net income, an $86mm IPO, and we would struggle to fill the room. In this case, it was Stephen Schwarzman. The man was already a billionaire several times over, and the room was standing room only. Dick Fuld himself came down from the perch of the 33rd floor, and told a room full of his own employees and Stephen Schwarzman, "If we do this IPO right, Steve will be worth more than this whole company."

Boy, he had no idea how right he was.

When I heard this book was coming out, the finance nerd in me eagerly awaited and found it which local store would get it the fastest because I didn't want to wait for the online shipping time.

So, I bought it yesterday and read it in a day. It's awesome. Steve is a genius in so many ways, and the book does a good job of balancing personal/lighter stories along with the heavier finance stuff. You learn about Pete Peterson (author of the scary Running on Empty), and how together, they formed what's still the worlds largest PE firm.

I'm being purposly vague because I want people to read and experience this book for themselves.

Get it, read it. You won't be disappointed.

Carey's book is the Definitive Primer on Private Equity - It is Spellbinding, November 22, 2010


The story begins with the history of private equity. Stephen Schwarzman the ultimate central character in this book is a young mergers and acquisitions partner at Lehman Brothers. Henry Kravis of Kohlberg, Kravis and Roberts (KKR) is doing one of the first private equity buyouts called Houdaille Industries. It's a $380 million dollar deal. Schwarzman is sitting in his office at Lehman Brothers, and saying how could this be? How could KKR get this done? What are the details? It was a eureka type moment.


Schwarzman orders up the financing document, and can't believe what he is reading. He is looking at a revolutionary financial concept that he never dreamed could exist. He knows that all great achievements start out as merely a thought, and then someone must act on the thought. KKR has already been in the business the better part of a decade when Schwarzman latches onto the concept.


He tries to get Lehman Brothers to buy into the concept. They won't go, even though he explains that with one deal we could make more money than we make in a year doing everything else we do. Ultimately there is a falling out between glamour boy Pete Peterson who is running the firm with Lou Glucksman, the in your face trader who can't stand Peterson. Glucksman wins; Peterson leaves the firm and with Schwarzman and a secretary proceed over time to build Blackstone from nothing, just an idea. Together Schwarzman the young man, and Peterson the old tiger, they build Blackstone into a private equity powerhouse.


It's all here, blemishes and all. You are reading financial history as firms collapse and private equity ascends. Blackstone proceeds to do deal after deal, year after year, making billions for 60 plus partners, Schwarzman would have paydays as big as $400 million in one year, most of it taxed at capital gains rates of 15% because of what is called "the carry".


By 2007, one out of every five mergers would be worldwide would be done by private equity groups. Blackstone with 1000 employees would dominate the industry with just a handful of other players called Carlyle, Apollo, and TPG. They would build the private equity industry into a giant that would take on traditional investment banking firms.


Schwarzman in January of 2007 gives himself a multi-million dollar birthday party by renting the Park Avenue Armory, and paying Rod Stewart a million dollars for a couple of hours of singing. By the way, you really need to know this. I have been in Wall Street for 40 years, whenever you have outlandish things happening like this birthday party, It is ALWAYS a sign of a market top developing, and there is going to be a price to be paid.


Within months of the party, Blackstone goes public with a valuation built up over 20 years equal to one third of Goldman Sachs valuation built up over more than a century. Blackstone has a 1000 employees and Goldman 30,000 plus. Blackstone has 2.3 billion in profits in 2006, and Schwarzman's personal net worth approaches $10 billion. Pete Peterson who is worth a couple of billion is there for the ride as well. Peterson made an absolutely brilliant comment at a luncheon I attended a number of months ago. He said the difference between him and other investment bankers he has known is that "He knows the meaning of the word enough." Think about it, it is profound.


The book tells the whole story from the ground up. It takes you through the public offering, and the ups and downs of the whole industry. You will see how other firms operate as well. After reading this book, there will be no surprises for you as a reader regarding the private equity industry. There is one last vital point that needs to be made and the book talks about it.


In the next few years, the entire industry must refinance the debts of many of the corporations and businesses they have bought through the years. If the money is not there to be borrowed, than it is possible that private equity by itself could be the driver of another financial crisis. I personally believe not.


Whenever these types of crisis hit, they come out of nowhere, and there are only one or two people who predict them, and they had luck on their side. You are dealing with an outlier event or what some people now call a black swan event. I promise you will love this book, and thank you for reading this review.


Richard C. Stoyeck

If you like this kind of thing, November 3, 2010
This might be the kind of thing you will like. The writers clearly had access to Steve S, and are being much more positive about him than any other source I have seen (I should say that while I do not know Schwartzman, I know many of the senior people of the pre-2004 Blackstone. While all of them did very well out of the business, none of them were fond of their fearless leader). The authors are also very positive about private equity in general, which makes the book read more like a puff piece than I would have liked. The actual contents are mostly a laundry list of deals, and some of the narrative is fairly insightful, while some just puts one to sleep (they did this, it did not work, they did this, it did work, etc, etc, etc).

To summarize: if you are very interested in the private equity business, by all means, read this book, otherwise I am not sure it will keep your attention.

Informative and fair, November 9, 2010
If you are interested in learning about LBO's, private equity, junk bonds, corporate raiders, sub-prime mortgages and the Wall Streeters of the past 20 years who have revolutionized [both for the good and bad] modern capitalism, you will enjoy this book.

While many tomes have been written about the capital markets, this is one of the few that doesn't have a populist slant that assumes all things pertaining to Wall Street are bad, but rather presents the arguments both for and against modern financial engineering, and as such allows the reader to draw his own conclusions as to the net effect of the changes of the last few decades.

While it does sometimes repeat information, on the whole you should find yourselves swept up in the narrative while at the same time having occasional "eureka" moments when things which the media have presented in a prejudiced fashion suddenly become clarified, and the knee jerk reflex of Liberal perspective is shown to be ill considered and sometimes just plain wrong.

The market economy, of which Wall Street is a fundamental and indispensable part, is the whipping boy of many Progressives who refuse to understand that business is what has made this country wealthy and powerful. This book helps to explain some of the workings of that extremely complex institutional network, especially its dynamism and adaptability, and why indiscriminately castigating it for all the economics ills of our times is not only mistaken, but leading us down a path to impoverishment and weakness. To paraphrase Churchill, free market capitalism is the worst economic system... except for all the rest.

A Glimpse Behind the Curtain, November 11, 2010
King of Capital provides anyone interested in the Private Equity space with a unique and informative insight into one of the industry's truly successful companies. While this book will not give you a technical insight into how Blackstone researches, structures and managed its deals, it does provide a fascinating history of the company and its founder. The book generally has a neutral tone towards Schwarzman and the Private Equity industry in general. Arguably a bit more insight into the deals would have been valuable, but knowing how cagey PE companies are on sharing that type of information it is not surprising that the book only provides limited deal information. If you're really interested in the industry the book is worth a read, but if you are looking for a single generalist book on Private Equity, "Barbarians at the Gate" remains the classic. ... Read more

Editorial Review

Just as Watergate was the defining political story of its time, so Enron is the biggest business story of our time. And just as All the President’s Men was the one Watergate book that gave readers the full story, with all the drama and nuance, The Smartest Guys in the Room is the one book you have to read to understand this amazing business saga. ... Read more

Reviews

Who will be among the smartest guys in a federal prison?, November 3, 2003
This book will be especially valuable to those who have a keen interest in "the amazing rise and scandalous fall of Enron." I also commend to their attention Smith and Emshwiller's 24 Hours: How Two Wall Street Journal Reporters Uncovered the Lies that Destroyed Faith in Corporate America. The "smartest guys in the room" included Kenneth Lay, Jeffrey Skilling, Rebecca Mark, Andrew Fastow, Kenneth Rice, and Clifford Baxter. Whereas Smith and Emshwiller explored the same company as investigative reporters, McLean and Elkind seem (to me) to have approached their subject as corporate anthropologists. Both books reach many of the same conclusions as to what happened...and why.

Two significant differences are that Smith and Emshwiller limit their attention primarily to a period in 2002 extending from October 16th (when Enron announced huge losses caused by two partnerships) to December 3rd (when Enron filed for Chapter 11 bankruptcy); McLean and Elkind cover a two-year period of the company's "amazing rise and scandalous fall." Also, McLean and Elkind devote far more attention to each of the "smartest guys"; Smith and Emshwiller seem far less interested in them, except in terms of the impact of their mismanagement and corruption. Let's say there are two books about the collapse of the twin towers at the World Trade Center; one focuses on the human tragedies associated with it whereas a second book addresses design, construction, and structural issues. Obviously, both approaches are valid.

McLean and Elkind suggest that the eventual collapse of Enron was caused less by the greed of senior-level Enron executives than it was by their arrogance and incompetence. Their lack of basic business acumen is astonishing as is their defiance of regulatory agencies and contempt for customers. None of them seems to have had a moral "compass." They exemplified, indeed nourished a culture of brutal competition between and among their subordinates. Each used Enron as a personal ATM as well as a means by which to structure all manner of corporate partnerships and high risk/high yield investments without fear of any personal liability. If one prospered, so did they. If it failed, the loss was Enron's. On to another.

Primary blame for all this must be shared by Lay, Skilling, and Fastow. McLean and Elkind rigorously examine the inadequacies of each, suggesting that if only one of the three had not been involved, it is probable that Enron would not have had the problems it did. Attorneys, accountants, brokers (notably Merrill Lynch) and bankers (especially Citibank and JP Morgan Chase) apparently were aware of Enron's bending and then breaking of various laws but were earning so much in fees that they chose to remain at the Enron "trough" side-by-side with Lay, Skilling, Fastow, and other Enron executives.

Consider this brief excerpt from Chapter 10 (page 149):

Here's how another former employee explains the process: "Say you have a dog, but you need to create a duck on the financial statements. Fortunately there are specific accounting rules for what constitutes a duck: yellow feet, white covering, orange beak. So you take the dog and paint its feet yellow and its fur white and you paste an orange plastic beak on its nose, and then you say to your accountants, `This is a duck! Don't you agree that it's a duck?' And the accountants say, `Yes, according to the rules, this is a duck.' Everybody knows that it's a dog, not a duck, but that doesn't matter, because you've met the rules for calling it a duck."

There are so many other brief, equally revealing excerpts which I am tempted to include but won't. Earlier, I suggested that McLean and Elkind display in this volume many of the skills of a corporate anthropologist. I also commend them on their skills as storytellers. Of course, it helps to have many colorful characters and such an interesting narrative. Among business books, this is one of the rare "page turners." If Enron remains a classic example of organizational dysfunction, my guess is that this book will remain the definitive analysis of the causes and effects of that dysfunction.

Not For Lay People, March 26, 2004
There's blame galore to go around for the spectacular downfall of Enron Corp in that sober year of 2001. Accountants, rating agencies, regulators, lawyers, consultants, bankers--and these are just the bad actors outside the corporation. Look inside, where Bethany McLean and Peter Elkind treat their readers to a thorough journalistic scouring, and the smell of the rot almost wafts off the pages.

The authors rightly spend the vast majority of the book examining the personalities and circumstances that allowed the company to become what it was at the end of its life. Mix a potion that's one part hardscrabble Harvard MBAs, one part energy deregulation, and one part hysterical bull market, and you've got a financial molotov cocktail. Sadly, as we all know now, it was largely the little guy who paid the price for all the hubris of the players in this story, a fact that tends to get lost in the authors' painstaking recreation of the most complicated shell game in history.

But the story of Enron's fallout could provide the material for a whole other book. In this one we get the tale of the players, people like Ken Lay, Jeff Skilling, Rebecca Mark and Andy Fastow, all filled with an equal mix of remarkable brilliance and fatal arrogance. All are indicted by these authors as rabid players in a game they made up themselves, deeming themselves beyond the petty world of rules and regulation. But coming in for equal excoriation is the system itself, the web of enablement and intimidation that allowed Andy Fastow to quietly hammer together the company's coffin in the form of a maze of phantom accounting entities designed to prop of the appearance of the corpse inside. The most unnerving theme the book treats indirectly is the effect of mass psychology--the way exceptional personalities distort and transform reality on a systemic scale. And it offers little in the way of how something like this could ever be prevented in the future.

One word of warning for people not acquainted with basic finance: this is a complicated story, about erstwhile geniuses in the arcane use of financial products and regulatory loopholes. Though it's enjoyable even if one can't follow every detour down each accounting scheme, some knowledge of Wall Street and its workings seems necessary to understand the implications of the book overall. Given the fact that most experts didn't understand what went on here, the authors do their best to keep things as simple as possible, often using helpful metaphors and simple summations after a few pages of analysis, but they have no choice but to assume a level of sophistication among their readers.

Which leads to one gripe. In "The Smartest Guys In the Room" not a single institution or individual player involved with Enron escapes the authors' finger-pointing notice, with but one exception. Where were the journalists in all this? Why did short-sellers have to be the ones to ask all the tough questions? Bethany Mclean should take understandable pride in being the first one to pry the door open on Enron's malfeasance, but she was just a little late. One would think that with the mass of financial journalists on CNBC, the Journal, the Times, etc., that just one would have bucked the collective cheering squad and dug deeper into what this supposedly invincible company was up to. But of course, this was the bull market. A time when everyone was exuberant when they should have been scared.

Corporate Character, December 20, 2003
The authors describe a complicated critical mass of personalities that caused the Enron meltdown. McLean and Elkind have written a book about human behavior in a pressure cooker where top dogs vie for power. Enron executives cannibalized their own company with Wall Street's help. Financial engineering may have assisted these people, but their willingness to do it in the first place is a question of character.

I also recommend a book that explains how structured finance can be used to funnel money out of companies and which explains Enron's disguised loans: Tavakoli's "Collateralized Debt Obligations and Structured Finance."

turning a dog into a duck..., October 19, 2004
It is by now a clich� that arrogance and myopia contribute to many a downfall, whether the downfall is personal or corporate. This book proves that point aptly. Hubris and a sincere belief that Enron could do no wrong in the world contributed to an atmosphere of injudicious superiority. Combine that tumultuous atmosphere with ineffective, weak-willed executives and poor business management skills, Enron always was a precarious edifice awaiting its fate.

At least, such is the narrative that the authors offer. They argue that Enron, over the past 15 years, repeatedly found itself in financial trouble, and, rather than come clean to the Street, used financial engineering strategies to make its numbers appear better than they were. This practice arose out of a fanatical devotion to the company's stock price; the company's stock price would not continue to rise if the company missed the Street's earnings expectations for the quarter. Since so much of the executives' wealth was tied up in Enron stock and options, financial shenanigans became a self-fulfilling prophecy. After all, the authors point out, if most of your wealth is tied up in a company's stock, don't you have an incentive to do everything possible to keep its stock at a high level? Certainly, at this point, financial chicanery becomes more attractive than financial fidelity.

Therein lies the fundamental flaw of Enron (as well as numerous other bubble companies): the very compensation scheme created by the company to inculcate a sense of loyalty in its executives created a conflict too gross to manage adequately. The conflict in this instance is, in retrospect, a simple one: executives had all the incentive in the world to keep their company stock at a high level because all of their wealth, and their future wealth, was tied up in the company. Therefore, there was little incentive for them to be straightforward with the Street, or, for that matter, the company's finances. Enron thus became a delusional place where it could do no wrong and its managers were businesspeople par excellence.

All of this is false of course. Enron's managers are human after all, and all humans are susceptible to the foibles and follies of people everywhere; no matter how smart a group of executives, nor the sterling reputations of the schools from which they received their MBAs, absent sound business principles, ignorance becomes bliss and delusion becomes reality.

The authors are at their best when they explain the source of Enron's executives' arrogance, and the consequences for the company of that arrogance. It is important, therefore, to understand the company's hierarchy. The company was run by its founder, Ken Lay. Despite having the title of CEO, he played a role more akin to Chairman of the Board or a statesman: he spent most of his time away from the company, hobnobbing with celebrities and heads of state, and otherwise embodying the rock star CEO mentality. Business is just another form of theater, a la Sean Penn walking down the red carpet at the Oscars. Thus, other executives, from Jeff Skilling, on down, basically ran the show, and their outsized, narcissistic personalities therefore dictated a lot about the Enron culture.

Skilling came from McKinsey, the famous consulting firm full of Harvard and Wharton MBAs. As we all know, people with MBAs from Harvard and Wharton can be very intelligent. But they can also be very arrogant and dismissive of those they consider to be their intellectual inferiors; the authors imply that Skilling demonstrated the worst tendencies of a Harvard MBA, and, absent any checks in his behavior, his arrogance and condescension became the shaky cornerstones of the poorly constructed edifice that became Enron.

The metaphor of a poorly built structure is, at the end, the appropriate one for Enron. Despite the thousands of worker bees carrying out the daily operations of the company, the executives at the top were maniacally focused only on telling the Enron story: manipulating the Street into thinking that Enron was the greatest thing since sliced bread. Their thought was that as long as the stock keeps going up, and the Street believes in the Enron story, then there is no need to make the hard business decisions that are actually quite unpleasant to deal with. Enron had no organization and no comprehension of the risks it faced, either in its daily operations or in its financial engineering. One need not be an architect or engineer to know that structural integrity is important to the sanctity of a building. Such is the lesson we learn from the Enron fiasco: image is nothing when it is created only for the purpose of supplicating the Street and propping up the stock.

Incidentally, the title of this review comes from a reference in the book. The authors quote an accountant who explains that Enron used creative accounting techniques that often hewed to the letter of the law but violated its spirit. Under this logic, if you have a dog, but you paint its fur yellow and paste a beak on it, you technically have a duck, if by "duck" you understand it to mean "an animal with yellow fur (feathers) and a beak." In other words, if a transaction meets the technical requirements for it to be considered, say, revenue, then it need not matter that, in substance, it's not really revenue but debt.

Brilliant, October 17, 2003
Like many, I followed the Enron disaster as it unfolded with a certain curiosity usually reserved for matters closer to home. Somehow, the more I learned, the more intrigued I became at the sheer magnitude of the arrogance, incompetence and irresponsible management displayed by executives who were surely thought to be `the smartest guys in the room'. Fearing the media at large was skewing the coverage afforded to Enron on a whole, I looked forward to a book or report that would serve as a definitive look into the entire Enron affair with the type of thoughtful and provocative investigation that "The Smartest Guys In The Room" provides. Having been extremely disappointed with another recently read Enron expose, I could not recommend "The Smartest Guys In The Room" highly enough. Not only do McLean and Elkind do an excellent job in uncovering the facts, they do so in a crisply entertaining and enticing manner that kept me interested and consumed the entire way through. From the opening chapter, the authors flush out the characters, establish the timeline and ultimately piece together an incredibly insightful story of greed, ignorance and outright superciliousness, worthy of anyone's time and attention. "The Smartest Guys In The Room" is an incredible section of work that deserves to be recognized as the truly inspired endeavor that it is.

Human Frailty and Corporate Failure, December 18, 2003
The authors have done a masterful job of describing the critical mass of complicated personalities that contributed to the Enron meltdown. McLean and Elkind are keenly perceptive about human nature at its worst, and paint colorful portraits of the personalities of Enron's top honchos. The behavior of Enron executives jockeying for position at the expense of their corporation is infuriating.

Ripping off the investors is bad enough, but some of the executives cannibalized their own company with Wall Street's help. Financial engineering may have assisted these people, but their willingness to do it in the first place is a question of character. McLean and Elkind do a masterful job of implying the contributing elements of lack of character. This is a well written and fascinating book. This is not so much a book about finance as it is a book about human behavior in a social crucible where power and high rewards are at stake. This book will become a classic in business school ethics courses and organizational behavior courses.

"Collateralized Debt Obligations and Structured Finance" by Tavakoli will become the textbook of choice for any graduate school developing a course in this subject. It's clever in explaining structured finance including Enron's disguised loans. The author gives reasons why investment banks and sureties who aided Enron had their own failings in how they distributed internal social rewards. It's a structured finance text that warns against and suggests defenses to this kind of behavior and starts out saying that one should expect fraud and be prepared to diffuse it.

The Guys Weren't So Smart After All, August 22, 2005
If you have any interest in the sticky wicket of corporate ethics, you've gotta read this book. Bethany McLean, who wrote the original article that helped start the ball rolling on Enron's inevitable collapse, and co-author Peter Elkind have done a masterful job documenting the rise and fall of Enron, an energy company that was, more or less, a tissue of lies.

The amazing things that stick out in my mind are how easy it was for almost all the participants in the unquestionable fraud that was Enron to justify what they were doing, to themselves and many others, before and even after the collapse. And how worthless it all was--most of them weren't very happy, even when Enron was riding high. And, for a few extra million bucks, they've pretty much made a mess of their lives.

The authors seem incredulous that, after giving the copious documentation of poor management and outside fraud, that most of the former Enron executives consider themselves victims of everything except their own greed and incompetence.

Yet does it surprise anybody that a company who was run by a management team that considered the most relevant aspect of Enron's business to be that "it was a really cool company" was, in fact, a mess? That the "loose-tight" management practices and Enron and praised by consulting firm McKinsey consulting were, in fact, all loose? McKinsey, a consulting firm that prides itself on radical management thinking and outside-the-box creativity (Tom Peters, one of McKinsey's most famous former employees, has made a very good living advocating management practices, and certainly attitudes, not so different from what Enron put into practice) has since tried to distance itself from its close relationship with Enron, and the authors don't pursue that connection very doggedly. But I am prone to wonder if, in a way, McKinsey isn't just as complicit as Arthur Andersen was in contributing to the debacle that was Enron.

Although McKinsey didn't actively participate in the fraud, book-cooking, legal manipulations, and outrageous debt that eventually brought Enron down--at least, not directly--certainly the McKinsey attitude was exhibited all throughout Enron. Certainly, Jeff Skilling--as guilty as anyone in Ernon's downfall--would have been a proud McKinsey case study, before the fall. He managed Enron "loose-tight", he hired creative and talented people with no experience in the Energy industry, he "innovated" with all sorts of new non-managing management techniques. He was a McKinsey golden-boy.

Somewhere out there, I'm sure there were some Tom Peters' seminars extolling the virtues of Enron's modern management and "super cool" corporate culture. The fact that the company cooked the books while leaking money all over the place not withstanding.

But, Arthur Andersen is out of business and the company that probably contributed more to the mindset that eventually put Enron out of business is still doing pretty well. Too bad nobody at McKinsey or Arthur Andersen suggested Enron might benefit from, say, talented people with actual experience in the energy industry. Or real oversight. Or actual cashflow.

Another interesting point made by the authors is the complicity of the analysts, who, unlike Arthur Andersen or Citibank, had no real vested interest in covering up the fraud. Yet, they touted Enron, even while observant short-sellers decided Enron was fatally flawed beneath the surface, and ended up reaping a windfall on their shorted positions, with no more information than what was publically available.

If we take nothing else from the sad tale of Enron, I hope we at least take this: mark-to-market accounting, that allowed Enron to legally book future profits, sometimes profits that would accrue over 20(!) years, as profits for that quarter, is little better than SEC-sanctioned fraud. Thus, while making almost no real money, Enron booked huge deals where the real money was far off in the future, paid huge bonuses to the deal makers on projected (re: made up, often wildly optimistic) profits, and thus, on that score, legally defrauded the stockholders.

A great anecdote is the one where, while the stock price is plunging into the toilet and it's becoming clear Enron is going to have to be bought, or go belly-up, Ken Lay asked Jeff Skilling to help him choose from the fabric swatches he has for the new interior of their just purchased G5 corporate jet.

It's a good book and, if you're like me, you'll shake your head in wonder quite a lot. What the hell were they thinking?

well-written, engrossing story, December 30, 2005
In 1998, the top 200 most highly compensated employees at Enron took home $193 million. In 1999, that increased to $402 million. In 2000, it was $1.4 billion; each of the top 200 made over $1 million and 26 employees made over $10million. In 2001, the year Enron went bankrupt, 15 employees made over $10 million. (p. 241) I begin my review with this because, after reading this book, it appears to me that this sums up what the real purpose of Enron as a corporation was. It wasn't to provide benefits for its customers or shareholders (though those who sold at the right time did extremely well), it was to make money for the executives and senior employees.

The Smartest Guys in the Room tells the story of Enron, starting before its formation with Kenneth Lay's career in the energy business, to its creation out of Houston Natural Gas when it (under the guidance of Lay as CEO) purchased the InterNorth pipeline company, three times its size. HNG's skillful negotiations (by John Wing) led to the smaller company's management team ending up in charge--an acquisition that bears some similarity to tiny Global Crossing's acquisition of Frontier Communications.

The book covers a huge cast of players and some terribly complex financial arrangements (the details of which are only summarized for the layman in this book), but the narrative still works well and it reads like a mystery novel. It is as sympathetic as it can be to many of the characters and to the company--the basic ideas behind energy trading make sense, though the implementation by Enron was flawed by the fact that Enron managed everybody's trades rather than using a neutral exchange or direct exchanges between partners where neither was Enron.

It is clear that the senior leadership of Enron who were not complicit in the arrangements designed to conceal debt from shareholders and the general public were at the very least negligent in their fiduciary responsibilities--Lay's main offense seems to be a completely reckless disregard for what was going on in his company, and it's somewhat
plausible that he remained a true believer until the end. The fact that he read aloud this written question in front of employees suggests a certain amount of naivete or detachment: "I would like to know if you are on crack. If so that would explain a lot. If not, you may want to start because it's going to be a long time before we trust you again." (p. 376)

The book documents the role to which there was complicity in these deceptive financial arrangements by the auditors (Arthur Andersen) and various banks (such as Citibank and J.P. Morgan Chase) which were desperate for the massive financial fees from Enron's business. It describes the poorly designed regulatory framework in California which Enron exploited to its advantage (again in ruthless and deceptive ways).

It's a large book (414 pp.) with an extensive index, but is a relatively quick read for its size. It makes it clear that Enron has earned its place in the pantheon of hated companies, but it's not so clear that the steps taken in the wake of Enron, like the Sarbanes-Oxley Act, will prevent such things from happening again--especially compared to a much simpler regulatory framework which just holds executives personally and criminally liable for corporate misbehavior.

Best Book Yet on the Rise & Fall of Enron, October 17, 2003
For someone like me who sits on a corporate board and did business with Enron (and knew some of the Enron executives involved) -- this book confirms what I suspected for years before the fall: Enron was a sleazy, unethical, immoral company run by crooks. This debacle was encouraged and allowed to happen by the outside directors on the Enron Board. Only they could have stopped it. But as the book makes clear, they never asked the most basic questions any director should ask. Sadly, these directors will probably never be held accountable for their malfeasance. If justice prevails, at least Lay, Skilling and Fastow will ultimately do hard time and forfeit their enormous illegal gains. This book should be required reading for every corporate director. One disagreement with the authors; the Enron players were not the smartest. They were simply brazen, arrogant crooks who thought they were the smartest.

Packed with Knowledge!, August 3, 2004
Enron is, of course, old news by now. The company went bankrupt in 2001, and its spectacular collapse was merely the first of a series of notorious corporate scandals. Most of the story Bethany McLean and Peter Elkind tell in their book has already appeared in newspaper and magazine accounts and in other, rush-to-publish books that hit the market during or shortly after the events described. However, these authors have assembled what may be the single most comprehensive, detailed account and written it like an anecdote-rich, lively business-based novel. We do wish they had included a timeline and a list of sources, since they have had the benefit of being able to draw on all of that other work, on indictments and on testimony before courts and Congress, but their account is engrossing and complete. If you read just one book on the Enron scandal, we believe this may be the book to read. ... Read more