Book Review: "The Ten commandments of Business Failure" by Donald Keough

I normally don't read much stuff on management and general leadership per se. I just happened to come across this title on Amazon while generally browsing. The fact that the foreword is by Warren Buffett and Donald Keough was the president of the Coca-Cola company made me go through some reviews and so I picked this book up.

To start with, this is actually a pretty slim volume of around 200 pages and the author who has had a long illustrious career with 'The Coca-Cola company' gives us 11, yes not 10, commandments of business failure. He then proceeds to take each in a separate chapter to explain what executives must do to fail in businesses. Needless to say, each of the 11 chapters is peppered with business examples based on Coke and other businesses.

The plus points of this book is that fact that its size and scope implies simplicity. Simplicity of a very pleasant kind where the reader can go through the book pretty quickly and have a good time reading the book. It's like your old uncle who has just retired from work explaining to you what good businesses are all about !

The average business school student or manager who has tracked world business events will, probably, have already heard about half of the anecdotes with the most famous examples being that of the New Coke fiasco (obviously), IBM's failure to figure out PCs, Xerox not capitalising on its R&D etc. But as a part of this book, they don't come across as jarring or repetitive. For the New Coke fiasco, for example, the author gives some good examples of customer feedback.

On the flip side, all the commandments come across as simple management platitudes which one has read across in almost every leadership article or book (of course, leadership books will all have the same reasons - there is no secret sauce).

To just sum up, this is a nice little breezy book on business and gives a wide range of business commandments to follow (actually). Plus the simplicity and the examples mean that while this is not a great book, it definitely is a good one.

My grouse with Warren Buffett

I have a serious issue with what Warren Buffett seems to teach people about investing and what people understand. You see Warren Buffett is everybody's famous investment idol. And people want to emulate him in his successful way of investing. So far so good.

Now the issue I am talking about is how simple he makes out investing to be. He has laid down his four characteristics of a good investment and people seem to think that's all there to his success.

I have read all the Berkshire letters, the earlier Buffett partnership letters and finished 'Snowball' in the first week of its release. I am not trying to show off my reading list. All I want to convey is that I am reasonably better informed than people who just look upto WB from the popular media or general books on him. Well all I can say is that he is a genius; a freak even; somebody like Newton or Einstein who comes once in a generation and one needs to keep that in mind.

So why do people think WB is an easy act to follow? Because of the way WB tells them; his letters are full of sensible humour and he conveniently guides the reader to omit certain sections which are slightly difficult to understand. Now compare this to say, Michael Phelps. Supposing if one were to ask him his secrets of success and he replied: " Oh, work hard, work out regularly, concentrate and practice a lot". Will anyone just take this for an answer. Our minds will probably tell us 'Working hard means more than 6 hours a day plus he started practicing long ago plus he has a unique physique suited for swimming' and other factors. Added to the fact is that, not everyone wants to be a champion swimmer.

But when it comes to investing, almost everyone wants to be a champion investor. My sincere suggestion to anybody who even remotely thinks he can be the next WB is to try and follow the same reasoning as above for Michael Phelps. WB has a unique set of brain wired for investing plus he started really young, reads and knows stuff like mad and he selects a few good business not only by their positive characteristics but also by rejecting a whole lot of bad businesses which also he knows in and out.

Of course, I don't mean to convey that listening to WB is useless. Far from it. Just listening to WB will, I am sure for many, improve our results (I recall a study done about six months back which said that if people bought stocks upto 45 days after WB announced, they still trounced the markets 2 to 1). We must do what he says, improve our results while at the same time not think that WB's long record will be easy to emulate. Doing so will only increase our own sense of despair and frustration.

We must keep in mind the following quote from WB's guru, Ben Graham: "To achieve satisfactory investment results is easier than most people realize ; to achieve superior results is harder than it looks" and use WB's guidance in ensuring our satisfactory results.

Book Review: Predictably Irrational by Dan Ariely

I'm hooked to books on Behavioural Economics and any book that comes out (at a reasonable price in India !!) is a buy for me even if reasonably good. Dan Ariely's "Predictably Irrational" was a similar decision. And a wise one, I should add.

The book starts on a premise that not only people are irrational but also predictably irrational, that is they are irrational all the time. And by basing decision choices on that premise, people can improve their decisions in all walks of life. It is the "all walks of life" that makes this book enjoyable and pertinent to almost everybody.

The book covers a wide range of decisions such as why FREE is an important decision making tool , why people can do inexplicable things when they are in a feeling of passion, why relativity is everything etc. This is only a small example list. There are many more in the book. Even those who are aware of their Behavioural Economics stuff will find this book very interesting. Some of the results of experiments are counter-intuitive and they will surprise the reader.

The only area of the book where I found myself trying to skip a few lines is the description of the experimental set ups. After a few descriptions, one may try to skip but don't as reading this is important to understand the outcome.

In all, I can say that this is a must-read book for anybody interested in behavioural economics, decision sciences or just plain economics. This book is on the lines of Robert Cialdini's 'Influence' and 'Stumbling on happiness' by Daniel Gilbert (Both are must reads especially 'Influence') . Let me also add that all self-help book readers should compulsorily read this. This is one of the most logical self-help book out there (of course don't tell this to the author. He might be aghast at the reference of this book as self-help!)

Satyam saga continues...

Well, when I first scribbled a few lines in the original post, little did it strike me that the entire company could be a sham. And now, with all the details coming out, I hardly have anything to write about that has not already been written about. Couple of points I want to make, still:

• Describing it as India's Enron: The moment the news came out, I instantly remember thinking that all sorts of media will call it India's Enron. And I was correct, mostly. Even the venerable Economist magazine did not escape this. And while expected, this shows how people like to quickly compare situations even though the underlying situation at ground could be completely different. Maybe Satyam actually has an impressive set of operational ability and only the finances were fudged. If true, then it is very different from Enron, isn't it?

• Now that Satyam-Maytas link is out in the open, there have been hypothesis about the links. Earlier, it was "Satyam bailing out Maytas" then to "Actually Maytas was bailing out Satyam" and again back to "Maytas was feeding on Satyam, the merger was only a sham because murk is easier in Real Estate than software business" (Yeah, I believe that !!!). The thing is it is all out in the open and people can make their own judgements

• And finally, given the various conspiracy theories floating about Satyam and its corporate governance right from the beginning, some of them are really interesting. Just google them and you'll get the links. It goes as far to stating that the whole Sify-Rajesh Jain deal that sparked off crazy Internet valuations in India was a sham. Really now all I can say that anything could be right. Only Raju knows !!!

Let us wait and watch the response of the Indian biz community to this saga. Markets have responded in an interesting way. Check out the companies that rose and fell on the day Satyam news came out. Was corporate governance the dividing factor? (I refer to the Sensex/Nifty stocks only)