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"Corporate Canaries" by Author Gary Sutton AHS 1960

image of book cover of the book Corporate Canaries, by Gary Sutton 1960 AHS Alum Meet Gary Sutton a 1960 Ames High School Alum !

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Soundview Executive Book Summaries

July 28, 2005

"Corporate Canaries: Avoid Business Disasters with a Coalminer’s Secrets by Gary Sutton was published October 2005 by Nelson Business and is under consideration by Soundview Executive Book Summaries as one of the 30 best business books of the year."

"Corporate Canaries" by Gary Sutton is a book about corporate turnarounds that engages its readers in two effective ways: it's built around stories and it has a killer metaphor.

The canary in the coal mine may be familiar to some of you, but what better metaphor can you find for “danger signal”? Because seeping toxic gas that could signal an impeding explosion would kill little birds before it affected men, coal mining companies would put cages of chirping canaries in the tunnels. When the canaries stopped singing and keeled over, you knew you better get out of the tunnel as fast as you could.

The stories in Corporate Canaries are told by Gary Sutton's grandfather, an Irish immigrant who worked in the coal mines of Kentucky. Each of the five principle chapters of the book is dedicated to a different story about “Grandpa.” Each of Grandpa's stories then leads to a parallel business lesson about avoiding the mistake that could knock your company off its perch.

Gary Sutton knows about saving ailing businesses. As a serial turnaround CEO, Sutton built a successful career based on the simple notion that if you're going to fix a wobbly company, you have to find out what killed the bird — in other words, what did the previous owners and managers do that got the company into trouble.

One chapter begins with Grandpa's story of a mine owner who believed that blasting his way through the earth indiscriminately, rather than paying attention to tell-tale signs of coal veins in the walls, was the way to mine more coal. He furiously used more dynamite and dug more earth and rock out of the ground than his competitors. His competitors, however, continued to mine more coal.

The business lesson is that companies often make the attempt to “outgrow losses.” These companies, write Sutton, don't realize that more revenues does not necessarily mean more profits — a mistake that even a giant such as Time-Life/Warner has made. Sutton urges companies to fix profits first, and then add business. Acquiring more unprofitable customers and more unprofitable products is like blasting more unprofitable holes in the ground: much more work, but the bottom line is still hurting.

Other lessons in Sutton’s book include: debt’s a killer; fools fly blind; any decision beats no decision; and markets grow and markets die.

At the end of the book, Sutton reveals that Grandpa is actually a composite figure based on both of his grandfathers and a coal-mining family he knew. Corporate Canaries thus gets uncomfortably close to parable territory, but at least the lessons in the book are insightful, the author has a long and successful track record of turning around companies (he is not, in his own words, “an overpaid consultant who's never met a payroll or some tenured professor with untested theories”), and there are no talking animals!
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