by Paul B. Carrol, Chunka Mui
Well written book, easy to read/listen to and learn about big failures of extremely large companies that killed them.
Lessons to be learned from failed companies
The root of the failures:
- Illusions of Synergy, oversee the clashes of culture, skills, and priorities of the integrated company
- When expanding - Lack of expertise in the adjacent markets, leading it to misjudge acquisitions and mismanage competitive challenges.
- Overestimating the strength or importance of the capabilities in the core business.
- overestimating the hold on customers. Just because people buy one service from you doesn’t mean they’ll buy others.
- False comfort when others are pursuing similar markets. Question will become who will win instead of does this even make sense (Telephone satellite phone Services in the 70s)
- Conformity of a group - no one is questioning the leader
The Error patterns behind wrong decisions
- Tend to see the future as a version of today and cant print themselves to imagine true threads that might wipe out their marked.
- Compare new technology with the existing business (model. They do not count on the possibility that a new technology kills the current business model (Film -> Digital).
- Not considering all their options. Do focus on their current product. They do not think about cutting back or selling the business.
Try to “Agree to Disagree”
Introduce a Devil Advocate who only thinks about why the project will fail. This should result in asking the right questions and find problems. E.g. Why would consumers use our satellite phones (with signal problems in buildings) in 10 years if mobile phones get better (Iridium Satellite Project)? Why would consumers not use digital cameras and print only the ones they like most, instead of paying for a expensive film (KODAK).
affiliate link ↩