Silver Spoons

Have just finished the book Battle of the Titans, [Bruce Wallace, Penguin Books 2001] which describes the rise and fall of Fletcher Challenge. The book blames Hugh Fletcher for the breakup of the business empire, stating his focus on growth rather than on operational efficiency lead to disaster. The last paragraph states-

This was an organisation that just made more mistakes than it could afford.
In the real world of commerce it was punished accordingly.

Hugh Fletcher of course wrecked the conglomerate that had been started by his grandfather. He was the classic silver spooner, born to wealth, given the best education money could buy, groomed for the top job at FCL and given the helm at an early age. Having said that, he did seem to have the intellectual grunt as well, having won a Harkness Scholarship and doing post-grad at Stanford where he was second in his class. But his name meant he survived longer with appalling results than any other CEO would have. Look at David Kirk at Fairfax (another FCL old boy); he got dumped after about 6 months of adverse share prices.

I was reminded of the old saying, the first generation accumulates, the second consolidates and the third dissipates. Boy, did Hughie follow that old saw. And now he is Vice Chancellor of Auckland University?

Anyway, reminded me of the 3 US car companies. Born with metaphorical silver spoons. They invented the production systems, operate in their home market, biggest and richest market in the world, distribution networks into every corner, chauvinistic customers and still they got beaten by asians having to transport cars in from overseas. Why would you back these 'hughies' and bail them out?