FIT TO BUST (How great companies FAIL)...

By Tim Phillips

Warren Buffet once remarked that it takes 20 years to build a reputation and five minutes to ruin it. So Journalist Tim Phillips turns his eye towards the most avoidable business disasters of recent history.

        For companies, “to be built to last, you have to be built to change". E.g. Apple, Google.Often a set of events lead to a downfall, even if there is nothing wrong with the entire system.It’s not what you do, but how you do it, that counts.

CHAPTER-2 (WorldCom & Bernard Madoff’s investment securities)-  It wasn’t enough just to be better. They had to carry on being better, every quarter, forever. In doing so, they thought they were “too good to fail” and ignored people who pointed out holes in their systems or balance sheets. They overstated their figures that bore little relation to reality. So no matter how smart they were, it was only a matter of time before something unpleasant was exposed. WorldCom group at one time was world’s largest internet carrier but they filed for bankruptcy on 21July 2002.

CHAPTER-3 (Northern Rock Bank, Barings Bank) - Companies tasted morphine, and then it was very hard to come off them. Companies behaved like an obsessive roulette player who keeps betting everything on black because that worked last time. It kills some companies slowly, some quickly. But if this is the strategy, it will kill you in the end. Northern Rock bank fell from grace due to recklessness, facing bailout from Bank of England and later nationalisation. While chasing a dream, there are two temptations : one is to believe you really are as brilliant as people say you are, and other is not to ask too many questions. We should not get tempted by any.

CHAPTER-4(Mr.Dunlap, CEO of Lily-Tulip group, Scott Paper Co. and many more companies) :- 

      A quote from the movie Superman (1978) :- “Superman : Easy miss. I have got you. Girl : You have got me, fine. But who has got you?”.A modern large company CEO, often live in the sort of palatial bubble that royalty used to enjoy.E.g. Mr.Thain spent almost $35,000 for an antique commode during his Merrill Lynch office redecoration.Whereas, Bill Gates even in his prime days always travelled economy class, despite of being the head of world’s best money making company. In some companies, the power that is thought to reside with shareholders actually rests with the CEO.

CHAPTER-5 (Iceland’s banking sector) -  Earlier the Icelandic way was Spend big, buy assets. Borrow more money and buy more assets. After the 2008 financial meltdown, everyone got bankrupt. Sometimes, leaders who join cult organisations make bad decisions, not because they are stupider than rest of us, but because the cult destroys their ability to perform critical thinking.

CHAPTER-6 (Lehman Brothers collapse, Merrill Lynch collapse) -   The greater fool theory :  You don’t have to believe that what you are buying is worth what you are paying for it, as long as there is someone else prepared to buy it from you for more than you paid.

CHAPTER-7 (Merger between AOL and Time Warner in 2000)  Some firms want to merge so much, that they don’t see that it’s a terrible idea for them. They spend so much time merging that they forget what they are meant to be doing. This throws both the companies into reverse.In 2009, Time Warner announced that it was spinning off AOL into a stand-alone public company.

CHAPTER-8 American International Group (AIG) after the financial crunch, paid $165 million of its government bail-out money straight back to the employees who were responsible – as performance bonuses. 

      If you are a ship’s captain and there are icebergs in the sea, your grand strategy for avoiding them should be that when you are approaching an iceberg, you spot what’s happening and change course.

In Chapter2, the companies looked at the iceberg and thought that they could plough right through it if they told people it was smaller than it looked.

In Chapter3, the companies had avoided some small icebergs, so they sailed full steam ahead at the biggest one thinking that they can get past it too.

In Chapter4, the captain said the iceberg didn’t exist and we believed.

In Chapter5, everyone agreed that even if there is an iceberg, it was probably better to keep going straight ahead.

In Chapter6, people raced with each other to see who could hit the iceberg first.

In Chapter7, the captains were so busy quarrelling that they didn’t see the iceberg.

In Chapter8, some people thought they had built a magic boat. 

The GHOST in Uniform...

      Almost 50 years after his death, a soldier continues to serve the Indian Army!!! Yes... It's TRUE.

   

      Barely 25 kms from Jalandhar (an hour ride by motorcycle), in the neighbouring district of Kapurthala lies a village named "Kuka". It's no ordinary village, as it plays host to probably one of the greatest real life stories the country has to offer. 

    

        At the village, finding Baba's house is very easy. Everyone seems to know where he lives. The house lay on a narrow earthen street off the main village road, made of brick and concrete surrounded by high walls. Visitors, internationally known media people always drop by unannounced at any time of the day, "especially when he is there on leave". In his room, lies a photograph of Baba at one corner, broad shoulders in his olive green Army uniform. With barely the trace of a beard, he looks younger than you would expect. On the bed, a new uniform is laid out. His shoes and slippers lay at the foot of the bed, along with a pair of snowshoes (which get changed every year).

    Every time he comes home, a berth on a train is reserved in Baba's name and two soldiers accompany him on the journey back from the Sikkim border. They travel with him to Jalandhar, where an Army vehicle waits for his arrival. It's adorned with four nishan sahibs, the flag that marks any Sikh religious shrine.

     He arrives on 16th September, every year from New Jalpaiguri, and stays at the Army gurudwara with his regiment that happens to be posted at the Jalandhar Cantonment. The next day, he is driven home. Mid November, the same vehicle takes him back to join duty in the distant mountains.

      We are speaking of a man who had been dead for nearly 50 years. Baba joined the Punjab Regiment on 9th Feb 1966 & became a part of the 23 Punjab Regiment when it was raised in October the same year. Its first field posting was in the mountains on the Sikkim border with China.  On 4th Oct 1968, while escorting a mule column, he slipped and fell into a glacier near Nathula Pass. He was the first casualty of the regiment.

      Shortly after his death, Sepoy Harbhajan Singh appeared to a colleague in a dream & asked that a samadhi be constructed in his memory. Soldiers who patrolled the mountainous border with its icy crevasses & sudden avalanches started seeing him in their dreams. His prediction of the dangers that awaited them, or so the story goes, as well as his warnings 3 days earlier about Chinese intrusions in the area proved correct over and over again. 

      The belief grew that the spirit of Baba Harbhajan, as he was now being called, was still patrolling the border. The Army started treating him as he were alive. It helped morale in an area where troops had to patrol the snowbound borders at heights above 4,000 meters. Over the years, like any serving soldier, he was assigned living quarters, clothing, given annual leave and awarded promotions.

     His samadhi today is a shrine which attracts devotees from Sikkim & Bengal. In 1987, a memorial was constructed in his name, and a Baba Harbhajan Singh mandir followed soon after.

       The most extreme stretch of the Indo-Chinese border is given to him to patrol on his own. It is usually the most difficult part of the terrain which usually is not accessible even to Army troops & in the dreams Baba has always promised that the troops will have a 72-hour warning before any untoward happening. Army records also show that, when he goes on leave, additional troops have to be deployed and pulled back when he returns in November. During the flag meetings between the two nations at Nathula, the Chinese even set aside a chair aside for the Sepoy, who now is officially set to retire as a Major. The office of Baba's regiment, The 23 Punjab Regiment confirms the story. The regiment also credits their victory in the battle of Longewala, portrayed in the Hindi film BORDER, to their greatest Soldier of all time i.e. Baba Major Harbhajan Singh.

#Incredible INDIA...

Wiki Reference Link :-

http://en.wikipedia.org/wiki/Baba_Harbhajan_Singh