Are some types of businesses better or worse than others at learning from mistakes?
If you look at some of the great companies in history, like IBM in the Tom Watson Jr. era or GE in the Jack Welch [Jr.] era, you find cultures that fostered disagreement. At one point, I had the pleasure of meeting Watson. He was a terrific guy, but he loved a good fight. He talked about liking harsh, scratchy people, and he was a harsh, scratchy guy. In his era, there wasn’t any need to sugarcoat things for fear he would get mad. We found that companies that encourage disagreement are much more likely to avoid mistakes than companies where everybody is trying to take whatever idea the CEO has and make it work. Can you explain your concept of “danger zones”? The idea is that there are seven types of strategies [synergy, financial engineering, rollups, staying the course, adjacencies, riding technology and consolidation] that are most commonly associated with failure. If you understand that these seven areas are potentially dangerous you can watch for the red flags we identified that le
