Review by Geoff Gannon

Yesterday, I scampered off (virtually) to Amazon.com, found Don Keough's new book, and clicked the “Buy Now” button.

Through the sorcery of modern book selling – one minute, nine dollars and ninety-nine cents later – Don Keough’s words were in my hands.

I froze.

Seeing the big, bold print of that title page on my Kindle, I froze. Here was a business book by Don Keough. Yet for some reason I expected the worst. The title was not encouraging: “The Ten Commandments for Business Failure”. It sounded like a book I’d read a few hundred times before.

Would this be a saccharine sleigh ride through Coca-Cola’s golden (Goizueta) years? Or just another listless list of managerial platitudes?

Evenly divided between anticipation, trepidation, and vacillation I pressed the “NEXT PAGE” button and embarked on my journey with Mr. Keough.

At least, I thought it was to be with Mr. Keough, until I read the first few words of the foreword:

"It has been an article of faith for me that I should always try to hang out with people who are better than I. There is no question that by doing so you move yourself up. It worked for me in marriage and it’s worked for me with Don Keough."

That voice, of course, is Mr. Buffett’s. Warren’s cameo will be appreciated by all business readers, but those of the investing ilk will savor it most. And this is a worthwhile book for investors – though only indirectly so.

Don Keough has written a general business book, not a managerial handbook. As he writes in his introduction:

“…there has never been a shortage of speakers and writers willing to dispense tried and true advice on how to succeed in business without really trying.”

This is not that book.

Nor is this the book for the starry-eyed entrepreneur, the middle manager looking to get ahead, or the executive who wants to become a “leader”. This is not a self-help book.

It’s a business book – and a damn good one. The lessons within provide insights into businesses both good and bad and are as useful to the investor as they are to the executive.

Keough knows the kind of book he’s writing and tells us at the outset who his audience is:

"While these commandments can be applied to any business at any stage in its development, they are mainly intended for businesses and business leaders who have already attained a measure of success. In fact, the more you have achieved the more the commandments apply to you."

His years at Coke made Keough extremely well-qualified to write a book on how to screw up a sure thing.

Keough’s advice is simple, maybe even trite:

"You will fail if you quit taking risks, are inflexible, isolated, assume infallibility, play the game close to the line, don’t take time to think, put all your faith in outside experts, love your bureaucracy, send mixed messages, and fear the future."

That’s the whole book right there. Sorry to spoil it for you.

But what I haven’t spoiled for you is the fun of seeing how Keough takes these trite little dictums and develops them through anecdotes. He makes passing reference to many of the most familiar business failures; Xerox, Ford, and IBM are all taken to task.

However, Keough’s best stories are his Coke stories. Even his best IBM story is really a Coke story:

"After the opening of the meeting, Akers made a speech on the supremacy of the customer in the IBM world, and in order to highlight how important this new paradigm was, he said that as the centerpiece of this meeting I was to be the speaker at the first session."

Before letting Keough (then President of The Coca-Cola Company) speak, Akers told the audience: “I want you all to get the flavor of some of the in-depth discussions we have been carrying out here at headquarters to explore ways we can better serve our customers and reaffirm our dedication to those customers.”

"He then showed a video of senior executives including him with their coats off and sleeves rolled up in some clearly serious meetings on customers and customer service. There were charts and graphs and a professional facilitator who kept reminding everyone of the importance of the new paradigm…I watched this video along with everyone else. Of course I couldn’t help but notice that on the conference table in front of every executive taking part in the customer-oriented discussion was a can of Pepsi-Cola."

Keough heaps one anecdote on top of another. I won’t ruin it for you by cherry picking the best bits and reprinting them here. Like a comedy, this book is best approached without having already been exposed to all the good material.

“The Ten Commandments for Business Failure” is a lightening fast read. I read it twice yesterday. The first half of the book flies by.

It loses some momentum near the end, where Keough, who majored in philosophy, gets a bit too philosophical for a bit too long. Even here, what he does he does well, but I’m not sure it needed doing – at least not in the same book that cuts quickly to the heart of so many bone-headed business mistakes. Keough’s slight meandering near the end of the book is far from a fatal flaw; it is, for instance, nothing like the two-book format of Alan Greenspan’s “The Age of Turbulence” which subtracted from one good book by adding another.

There is one other flaw: the chapter on bureaucracy is too long. While I’d love the book to be twice as long if we got twice as many of Keough’s well-told tales, the chapter on bureaucracy and Keough’s brief foray into Malthusian thought (and other equally dismal topics) are either longer than they need to be or altogether unnecessary.

These small missteps are but a pebble on the scales when compared to Keough’s honest assessment of just about everything in business:

"Now annual reports of most companies are page after page of full color, featuring people of all races, creeds, and cultures plus a double-page spread of a pristine forest in Maine that was not cut down to produce the report. Somewhere in all this green beauty you’ll find the numbers."

I wish Keough were embellishing the truth to make a point. Sad to say, I once read an annual report where the financial data literally appeared among those trees – the great upward trend of earnings causing each year's EPS to rise like a redwood – higher and higher – ‘til it scraped the azure sky.

Yes, there are a few hairline fractures on Keough’s little gem, but a gem it remains.

I have no doubt Don Keough’s “The Ten Commandments for Business Failure” will go down as one of the best business books of 2008. I also have no reservation recommending it.

Verdict: BUY

*****
(5 out of 5)

Related Reading

WSJ Interviews Keough

Atlanta Journal-Constitution Interviews Keough

Originally posted at: http://www.gannononinvesting.com/