Editor: Daniel McGinn
Publisher: Harvard Business Review – 319 pages
Book Review by: Sonu Chandiram

This is a collection of 34 candid essays written in the first person by heads of corporations of various sizes, including some very well-known ones such as Aflac, Amway, Blockbuster, DuPont, Encyclopedia Britannica, Enterprise, General Electric, Google, H.J. Heinz, Honeywell, Marriott, Novartis, Prada, Timberland, and Xerox.

Taken from the pages of the Harvard Business Review, the leaders of the companies relate to us some of the most difficult management challenges they faced and what they did. The lay person usually assumes that they did superbly in handling their tough problems and complicated situations. Not so. These people in the hot seat often screwed. It was trial by fire for many.

The value of these short (six to twelve pages long) first-person writings is obvious; such work-based and literally life-based experiences are not found in textbooks, unlike theories and concepts. In order to truly learn how to run a business well, nothing short of actual experience is needed, in my opinion. Starting a business based on no experience is very tough, even with adequate money for the startup.

To go into uncharted territory by starting a new business, especially a non-franchise enterprise, to risk your capital of hard-earned several hundred thousand dollars, and sometimes lose it all, especially quickly, can be heart-breaking. And going through the process of a steep learning curve lasting several years can be daunting. So if you’re planning to start your own business and grow it real big (or taking the helm of an established firm) why not benefit from the experiences of these business leaders by reading their stories?

The 34 essays are organized around six themes that form the sections of this collection:

  • Picking the Right People
  • Building the Right Culture
  • Telling the Right Story
  • Growing Around the World
  • Doing Smart Deals
  • Finding a Strategy That Works

Let’s look at one of these essays. It is entitled Pulling off a Sweet Deal in a Down Market by Rajat Gupta, former chairman and CEO of Rohm and Haas, a multi-billion dollar company in the business-to-business chemicals industry. The only consumer product that I know of that it sells is Morton Salt.

Essentially, Gupta’s story is on the July 2008, $18-billion dollar proposed friendly deal for the sale of Rohm and Haas to its rival Dow Chemical that almost did not materialize. Gupta had planned on retiring as soon as the sale was concluded.

The agreed-upon price was an all-cash $74 a share with no condition dependent on Rohm and Haas’ stock price or anything else. But the stock market and the credit market went into turmoil then. The price of Rohm and Haas had slid all the way down to $52, and it had never gone above $62. Gupta had hoped on closing the deal in the Fall of 2008.

Dow Chemical was expecting a large cash influx – about $9.5 billion – from a joint venture with Kuwait Petroleum. But on December 29, Kuwait canceled the venture. Since the deal between Rohm and Haas and Dow Chemical was unconditional, legally the latter was in trouble if it did not close the deal within the time period agreed upon.

Dow Chemical did not have any source of $9.5 billion in cash, so the matter was pending for months. Finally, Dow was able to arrange the financing, so the purchase of Rohm and Haas was concluded in March 2009. The essay mentions many difficulties Gupta went through, such as being diagnosed with prostate cancer, numerous board meetings on evenings and weekends, and other matters that took a personal toll on him. But the final outcome – the sweet deal – was well worth going through all that Raj Gupta had to. He truly earned the retirement he’s now enjoying.

 

Daniel McGinn is a senior editor at Harvard Business review Group. He edited this collection.

The individual essays were edited by the following:

Allison Beard
Scott Berinato
Amy Bernstein
David Champion
Karen Dillon
Roberta Fusaro
Adi Ignatius
Suzy Jackson
Daniel McGinn
Gardiner Morse
Steve Prokesch
Anand Ramand
Katherine Xin
Kite Xu
Martha Spaulding copyedited the essays.