This is a real life account of the largest takeover in history worth $68.3billion. At the time it was the largest all cash acquisition in history and the last giant merger inked before global financial markets crashed. InBev, a foreign Belgian brewery at the time bought Anheuser-Busch, America's golden child, household name for American beer.
This story was written by a pregnant woman at the time, Julie Macintosh and i very much liked that.
When i started reading this book, for some reason the voice in my head had a male disposition, and then i reached the point when the author mentions the fact that she started writing the book while pregnant, going for interviews, meeting with executives and journalists at the time with her big bulge belly. All of a sudden, the voice became feminine in my mind.
Do you know what i think? I think because it was a book about beer, and corporate hostile takeovers, i subconsciously assigned this as a masculine thing when in fact gender had nothing to do with and i also had no proof the writer was male.
But why didn't i assign it as a feminine thing till i had proof it was? That's where the problem is. I naturally defaulted to the male, but didn't for the female, i needed proof.
Anyways, that has now been #Unlearnt. #Note to self, assign things that have nothing to do with gender randomly as either female or male, not one over the other. Be gender neutral about things that don't have anything to do with gender till there's a proof of gender, not default to masculinity. That's a spillover of patriarchy.
Here are a few lessons from the book:
1. Having a strong personal (family) brand attached to a company brand is a double edged sword
The Busch family had a strong reputation in American brewery, hell they ruled. With family members constantly in leadership. August Busch III was Anheuser's domineering patriarch, a strong personality who ruled the company and established its dominance in the industry. August was respected and feared but he is invariably human, and after he exceeded his reign, it was hard for his son, August IV, or most people to meet that standard set.
The perceived power of the company in the market was over the years diluted as the company got bigger and had institutional shareholders. It's quite interesting that this power of the Busch family had been been long gone as they only controlled 4% of the company which isn't control at all. Though they had influence, likely from the public perception of their brand, and control they thought it had.
2. Reckless spending is not a sign of success, its a sign of poor management
Certain companies lavishly spend to make a point. That the company is doing well financially, to establish a reputation of buoyancy, respect and signal to the public a penchant for "quality". No doubt, you will gain a quick reputation going this approach.
However, unnecessary costs lead to more costs and financing liabilities become even more expensive in the long run. Shareholders get mad at directors for this you're clearly not "maximizing shareholder wealth" and when attractive takeover bids come through, it will be hard to convince them that sticking with the status quo benefits them. Also, excesses over time are difficult to unlearn once they become part of the corporate culture.
3. Have a Succession Plan from Day 1
A great leader builds a business that can survive without her. It's quite interesting in this book, the succession plan wasn't clear from day one even though it was a family business. On the flip side, i did like that the natural successor of the CEO, - his son (seeing it was a family business) was groomed from a young age. It was a breath of fresh air to see that even bloodline had to establish and build credibility. Having a surname just wasn't enough. This reminded me that building a business that can't exist without you is not sustainable success. It is one thing to be successful and a different thing entirely to be sustainably so.
4. M&A Mistakes are Expensive
Making a mistake during a merger or acquisition, especially a hostile takeover can be very expensive. Due diligence is important, rigor is important. Estimating the value drivers and ensuring that acquisition secures ownership just not just access proved quite important in this book. I also noticed the common reaction to a bid of seeing only what you want to see
5. There's no such thing as "Too Big To Fall"
If Enron, Bernard Madoff Securities, Arthur Anderson, all organizations during their time known for their sheer size and industry power. Though there's an element of fraudulent and ethically questionable practices above, my point is, no organization should allow the complacency of constant growth and it's large size or market share dull its senses and trick it into believing that it is immune to market forces, especially if its a public company. Shareholders will always follow the money.
6. Banks are NOT your friends :)
One would think this goes without saying but sometimes even the obvious, isn't that obvious. Banks will always follow the money.
7. Authoritarian Leadership Style is not Sustainable
Asides from an authoritarian style stifling innovation and encouraging group think, it simply is not sustainable and not beneficial to the long term success of your company. Less structured, hierarchical firms will out-innovate you because their culture allows for disruptive and fresh ideas. August III leadership style was clearly not liked by many and it reflected also in the culture of the company. It does have its benefits like faster decision making, but one must ask oneself, do you want to do it well, or do it quickly?
Biographies are are quite interesting for me, because i literally can do research on the author and circumstances at the time to get a better sense of the story (in the event the author is being biased in any way) and it is nice to learn from real life lessons. I will be reading more of these this year!
Read the book? What do you think about it?
I rate it 4.5 stars, because the author so skillfully was able to create from a real life event, a coherent insightful storyline from a relatively rounded perspective.