Bill Gates and Warren Buffett’s Favorite Business Book
Bill Gates recently revealed his favourite business book is “Business Adventures”, a 1969 collection of essays written by journalist John Brooks which covers major turning points at some of the world’s biggest companies, from Xerox to General Electric.
Bill Gates told The Wall Street Journal that he asked Warren Buffett back in 1991 what his favourite business book was, and Buffett responded by sending his personal copy of “Business Adventures”.
According to Bill Gates, “Brooks’s work is a great reminder that the rules for running a strong business and creating value haven’t changed. For one thing, there’s an essential human factor in every business endeavour. It doesn’t matter if you have a perfect product, production plan and marketing pitch; you’ll still need the right people to lead and implement those plans”.
One of the Bill Gates’ favourite case studies in “Business Adventures” is the story of the Ford Edsel, which remains one of the most disastrous product launches in corporate history.
Ford’s executives decided that they would use research to develop the perfect car for middle-class Americans. Its designers and marketers spent two years gathering suggestions from the public and testing ideas on focus groups. But after all that research, Ford’s executives did what they wanted.
They also tried to please everyone instead of focusing the brand. Ford debuted the Edsel in 1957 in 18 variations, none of which seemed to target a particular audience. As for the name, the chairman of the board decided at the last minute that the car would be named after Henry Ford’s son Edsel, dismissing the list of names that took endless hours to compile.
Before the car was finished or even named, Ford began promoting teasers for the “E-Car,” which promised to revolutionise the automobile industry. Brooks says that the executives never even considered failure an option, creating an entire Edsel division and signing distribution contracts with dealerships before the vehicle was completed.
The stock market took a nose dive in the summer of 1957, and people stopped buying mid-priced cars. The Edsel was set to launch in 1957. Had Ford’s leadership acted more cautiously and avoided betting so much on the Edsel, they likely would have been able to avoid losing $US350 million.
Despite the countless mistakes that Ford’s leadership made with the Edsel, Brooks found that no one would take responsibility for the failure and felt they had done everything right. Edsel marketing manager J.C. Doyle even tells Brooks, “People weren’t in the mood for the Edsel… What they’d been buying for several years encouraged the industry to build exactly this kind of car. We gave it to them, and they wouldn’t take it. Well, they shouldn’t have acted like that.”
“Business Adventures” reads like an intriguing history lesson in corporate America and is available on Amazon for about $11 in paperback or Kindle formats.