Failures – exposed, reflected, considered

Attitudes of failing companies and Sisyphus

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I came across a nice article on Digital Tonto about how companies fail. I previously posted about why smart people and companies do dumb things, eventually ushering in failure. The article however shares some interesting insights and examples of how companies, even very successful ones, eventually commence their decline by following one of the below “attitudes”/approaches (comments are mine).

  1. Overconfidence: mostly driven by past success and self-confidence.
  2. Overvaluing Strategy and Undervaluing Process: companies that are obsessed by grand visions and strategies tend to underestimate the incremental changes and the process itself which are the drivers of success.
  3. Looking for Dragons to Slay: this quality is typical of few very successful companies such as Google who, once at the summit of their success, look into going after other markets, products and companies.
  4. Disruptive Competition: which might or might not bring value to end users.
  5. The Lambda Response: instead of solving the problem at hand, it becomes more exacerbated by internal confusions, inefficiences and panick.

Some of those attitudes leading to failure are among the famous Ten Commandments for business failure of Mr. Coke.

The article offers a solution to embrace, a corporate equivalent of Sisyphus:

When company leaders are like Camus’ Sisyphus, they are most likely to be successful.  Companies who are focused at the task at hand, rather than building empires and seeking out the “Next Big Thing” are doing their shareholders the greatest service.  For a company to be profitable over the long term it has to perform and that can only happen if the organization is united in its purpose.

Constant focus on creating value for existing and potential customers, unity of purpose, corporate humbleness and perseverance are the generic vaccines for companies successful but not yet narcisstic or obsessed by self-grandeur.

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Written by Hayk

March 1, 2011 at 11:49 am

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