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book review

Fit to Bust: How great companies fail, by Tim Phillips

Kogan Page, £14.99

As Phillips observes in the introduction to this excellent collection of what might be called "reverse case studies", there's no better or worse time to write a book about failing companies than at the tail end of a recession.
His book is a well-organised collection, grouping together stories by reason for corporate failure. So there are chapters on fraud, the destructive power of innovation, the damage done by hero leaders and so on. This gives Fit to Bust a more interesting pace than a chronologically clustered book would deliver. It allows readers, for example, to compare the failure of Northern Rock to that of the Mississippi Company and to draw conclusions.

One criticism is that many stories are too familiar-do we need another run through the Enron debacle? But there are lesser-known tales and the grouping method means it is possible to draw new insights. The fraud chapter, which covers Madoff's Ponzi scheme, Enron and WorldCom doesn't reveal much new, but later chapters are more fulfilling. The most depressing message here is that we simply don't learn from previous mistakes.