The Ten Commandments for Business Failure Review

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One of the fantasy dinners I occasionally think about would include several CEOs and one of them would definitely be Donald Keough. I tracked his career at Coca-Cola and then his association with Allen & Company as its chairman of the board. Regrettably, I never had the chance to meet him (much less dine with him) but was not surprised by the intelligence and sensitivity as well as circumspection that are revealed in his book. Keough is principled but he also possesses what Ernest Hemingway once characterized as "a built-in, shock-proof crap detector." He confirms a suspicion I have had for years: there are many different paths to business success but all business failures share common causes. Keough discusses ten of them, identifying each (with tongue somewhat in cheek) as a "commandment." He candidly acknowledges that throughout his career, he has broken (or at least bent) several of them when making a bad or at least ill-advised decision, notably the one he and former Coca-Cola CEO Roberto Goizueta made involving New Coke. He draws heavily upon his years at that company (1981-1993), citing real-world examples of business failure at a wide variety of companies, some of them otherwise quite successful and highly reputable.
No good purpose would be served if I merely listed the ten "commandments." Keough devotes a separate chapter to each and his insights are best revealed in context. However, I will provide a representative selection of brief excerpts to indicate the thrust and flavor of Keough's narrative, adding a comment or two of my own.
Excerpt: "A company doesn't fail to do anything. Individuals do, and when you probe a bit you usually find that failure lies not in a litany of strategic mistakes - though they may all be present in one form or another - but the real fault lies, as Shakespeare noted, in ourselves, the leaders of the business. Businesses are the product and the extension of the personal characteristics of its leaders - the lengthened shadows of the men and women who run them. (Pages 8-9)
Excerpt: "As Peter Drucker pointed out nearly fifty years ago, it is management's major task to prudently risk a company's present assets in order to ensure its future existence. In fact, if a company never has a failure, I submit that their management is probably not discontented enough to justify their salaries. Xerox was not discontented in any way. They were very, very comfortable, and, as I've noted, when you're comfortable, the temptation to quit taking risks is so great, it'd almost irresistible. And failure is almost inevitable."(Page 23)
Excerpt: "Charles Kettering, the great engineering genius who helped steer General Motors during its glory years, said `Don't bring me anything but trouble. Good news weakens me.' It is instructive that during World War II, Winston Churchill created a special office whose sole duty was to bring him bad news. He wanted the unvarnished truth, no matter what it was...Isolation [from painful realities], carried to its most extreme form, tends to breed a sense of almost divine right."(Pages 51 & 57)
Excerpt: "Watch out for bright lights that surround themselves with dim bulbs!" (Page 55)
Excerpt: "The Jesuit priest and distinguished paleontologist Teilhard de Chardin noted that `no evolutionary future awaits man except in association with all other men.' Therefore, it not only behooves us to treat our fellow human beings with compassion and respect, it is essential for our collective survival. Unethical men and women can flourish for periods, sometimes very long periods, but ultimately their lack of morality - and their lack of humility - destroys them. You cannot build a strong and lasting business on a rotten foundation." (Page 77)
Excerpt: "If you want to get nothing done, make sure that administrative concerns take precedence over all others! Love your bureaucracy!...There are layers upon layers of people, yet when a customer calls, nobody's home. They are all in meetings. These meetings generate more paperwork, more e-mails, more calls, more meetings. In fact, most often there are meetings to plan meetings. Meetings are the religious service of a great bureaucracy and the bureaucrats are fervently religious."(Pages 116 & 120)
With regard to this last excerpt, I am again reminded of James O'Toole's observation that many of the barriers to change initiatives are cultural, resulting from what he aptly describes as "the ideology of comfort and the tyranny of custom." Bureaucrats tend to be the most vigorous defenders of the status quo until convinced that any proposed change will not threaten their own subculture. It should also br noted that waste is one of the most important themes in Keough's book, one that is directly relevant to most (if not all) of his commandments. Drill down to determine the root causes of a business failure and you'll probably find extensive waste of resources and opportunities. In 1963, Peter Drucker shared this insight that remains true today: "There is surely nothing quite so useless as doing with great efficiency what should not be done at all."
Although most of the real-world examples that Keough cites involve major corporations such as Coca-Cola, IBM, Montgomery Ward, Republic Steel, and Xerox, I think that his observations and recommendations are relevant to just about any organization, whatever its size and nature may be. Although he places Commandment One, "Quit Taking Risks," at the top of his list of ten, my own opinion is that the last, "Lose Your Passion for Work - for Life," should be there. Among the most common causes of failure, not only in business but in life, I agree with Friedrich Hegel: "Nothing great in the world has been accomplished without passion." One man's opinion....
Those who share my high regard for this book are urged to check out these books written by other fantasy dinner guests: Benjamin Franklin's Autobiography, Peter Drucker's Adventures of a Bystander and On the Profession of Management, Jack Welch's Winning (with Suzy Welch), and James M. Kilts's Doing What Matters: How to Get Results That Make a Difference - The Revolutionary Old-School Approach (with John F. Manfredi and Robert Lorber). Also Bill George's Authentic Leadership: Rediscovering the Secrets to Creating Lasting Value and his more recent True Blood: Discover Your Authentic Leadership, John C. Whitehead's A Life In Leadership: From D-Day to Ground Zero: An Autobiography, and Sydney Finkelstein's Why Smart Executives Fail: And What You Can Learn from Their Mistakes.

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