AOL Time Warner turned into a debacle for employees and investors, so how can others avoid their mistakes? Start with Why Smart Executives Fail (Portfolio, $26.95, 318 pages, ISBN 1591840104), an insightful book that looks not only at the causes of business failure but also at the people behind the bad decisions. Sydney Finkelstein, a professor at Dartmouth's Tuck School of Business, moves beyond the easy answers (the executives were a stupid bunch of crooks!) to find the real causes of failure in every industry, from fashion and food (Mossimo, L.A. Gear, Coca-Cola) to phones and finance (Motorola, Bankers Trust). A surprising number of failed CEOs were willing to tell all, and Finkelstein found that a skewed sense of reality and a breakdown in communication often pull businesses under. Execs need to be on guard against the "zombie business" where cockiness (both employee and organizational) crowds out the voices of customers and competitors. The "seven habits of spectacularly unsuccessful people" are funny and insightful, and the warning signs of the next big disaster are useful for CEOs and investors.

On the flip side, you can learn from the biggest and brightest in What the Best CEOs Know. Author Jeffrey Krames examines seven of the top CEOs, including Michael Dell, Lou Gerstner and Sam Walton, and distills their success into an easy-to-understand signature strategy or tactic that anyone can imitate or borrow. Learn how Jack Welch created a learning organization at GE and how Bill Gates harnessed the power of every employee at Microsoft.

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