10 August 2016
What makes businesses fail?
Imagine if we had the answer! A simple formula to follow to guarantee success.
Unfortunately I don’t think that’s ever going to be the case. There are so many variables and so much advice on offer.
So what do we do?
I like to look to as many places as possible for inspiration. One such place, TED Talk podcasts, sprung an interesting concept yesterday. Companies fail because they only do more of the same or follow the latest trends.
In the talk, Knut Hannaes of The Boston Consulting Group (BCG) shares a story of Facit mechanical calculators. They were the leading provider of calculators, the best in the world, everyone used them.
So what did they do when electronic calculators came along? They continued to do everything in exactly the same way. Within six months, they fell from the top of the tree to nothing. And, ironically, the engineers producing the mechanical calculators had been using a cheap Japanese electronic calculator to check the accuracy of the mechanical ones they were building!
The talk also discussed the notion that bigger companies are more likely to adopt this behaviour pattern – they are less likely to explore, less likely to evolve. But, businesses need this balance of what Knut calls exploration and exploitation – making the most of what you have whilst looking for new opportunities.
It’s a great piece of advice and something that transcends every business size and level. You can listen to his talk below.
In the meantime, are you exploring enough? Are you making the most of what you have?