By His Own Rules : The Ambitions, Successes, and Ultimate Failures of Donald Rumsfeld (Bradley Graham)
Not exactly a business book (although Rumsfeld’s time as a CEO is included), and not exactly a biography, “By His Own Rules” is an exceptionally detailed, occasionally leaden-footed, but ultimately revealing portrait of the difficulties inherent in managing highly complex organizations. If you work for or with large organizations and wonder how all that bureaucracy gets created – and how to combat it, you should read this book.
Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System – and Themselves (Andrew Ross Sorkin)
The definitive book on the meltdown is yet to be written, but this is the best ‘you are there’ tick-tock so far. Sorkin’s laboriously detailed reconstruction of the endless meetings and negotiations during the Lehman / Merrill Lynch / AIG collapses will persuade you that even the masters of the masters of the universe can be unbelievably incompetent. The degree of moment-by-moment improvisation and post-rationalization is mind-boggling.
How The Mighty Fall: And Why Some Companies Never Give In (Jim Collins)
I’m not always convinced by heavily data-driven, research-based business books – there are just too many ways to make data say what you want it to say – but Jim Collins’ latest book is not only slimmer than his previous tomes, it also gells with my own subjective experiences and observations. You can read it on one (longish) plane ride – and I suggest you do. 
The Practice of Adaptive Leadership: Tools and Tactics for Changing Your Organization and the World (Ronald A. Heifetz, Marty Linsky, Alexander Grashow)
Any book – any writing, in fact – by Ron Heifitz is a no-brainer for me. This book is an amplification (a ‘field guide’ as he puts it) of his concept of ‘Adaptive Leadership’, providing a host of real-world techniques for business leaders. If you haven’t yet read his earlier work Leadership on the Line: Staying Alive Through the Dangers of Leading, you might want to start there first.
Immunity to Change: How to Overcome It and Unlock the Potential in Yourself and Your Organization (Leadership for the Common Good) (Robert Kegan and Lisa Laskow Lahey)
I continue to get more from “Immunity to Change” than any other book I’ve read this year. As a concept, the idea that some organizations are in essence ‘immunized’ against making positive changes in how they operate resonates entirely with my observations and experiences over the years. If you or your organization has struggled to make positive change stick, then this is a must-read. 
…And one for 2010
My prediction for best business book of 2010? *Ahem*:
Predictable Success: Getting Your Organization On the Growth Track – and Keeping It There (Les McKeown)
I’m told by an inside source that it’s pretty darn good.