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Author Gary Sutton
AHS
1960
Book Review
Soundview Executive Book Summaries
July 28, 2005
"Corporate Canaries: Avoid Business Disasters with a
Coalminer’s Secrets by Gary Sutton will be published in 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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