Achieving Strategic Success by Studying Failure


Conventional management thinking holds that companies can be successful if they can adopt the same best practice strategies that have made other companies successful. Perhaps, but reality is less certain.   An old adage illustrates the point. Imagine you are in the Antarctic watching a group of 5 hungry penguins peer down from an ice flow at a school of fish.  They want to jump in but are hesitant because penguin-eating walruses are lurking about.  The first penguin decides to throw caution to the wind and jumps.  Seeing the first penguin merrily eating fish with no walrus in sight, the second and third penguins jump in and begin their feast.  After seeing their three friends gorging, the last two penguins find their willpower exhausted and plunge in.  However, two problems await them.  Firstly, there are a lot less fish around thanks to the gluttony of the first three penguins.  Secondly, a ravenous walrus has witnessed the scene and is headed straight for them. 

Mirroring the strategies of others becomes problematic when sameness leads to industry-wide price declines, undifferentiated products, and rising input costs.  For example, how many companies can compete in a given market on a low price or premium market position?  Furthermore, aping other firm’s strategies often serves as an excuse not to improve your own core competencies or undertake sufficient analysis in the first place. 

Based on our firm’s experience with a number of packaged goods, IT and banking clients, combining failure analysis with best practice research is a proven way of approaching strategy development and project implementation, especially for risky initiatives like price changes, product launches and new market entry.

If blindly following others is not always ideal, how can companies leverage failure analysis to improve strategic and implementation decision-making?  Below are some of our guiding principles:

 Avoid the blame game

A proper assessment will only occur when individuals, departments and business units feel they can speak frankly without punishment and have the time to carry out a proper, retrospective analysis.  This state can only occur when senior leadership (as well as the performance measurement systems) establishes a climate or trust, fairness and transparency.

Know thyself

Savvy firms recognize latent managerial and institutional biases and seek to mitigate their effects by using independent consultants to run the analytical process as well as leveraging specialized tools such as anonymous feedback.

Fully debrief all failures

All key internal stakeholders need to support and undertake a 360º analysis that looks internally as well as seeking feedback from customers and suppliers.  Unless your firm is always a first mover, you could learn a lot from the failures of key competitors as well as other companies who have undertaken similar strategies.

Appearance vs Reality

Failure analysis is a simple idea yet many organizations find it hard to do.  Why?  Individuals don’t always know (or acknowledge) the root causes of a failure as opposed to the identification of symptoms or popular scapegoats.  Not surprisingly, data on failures tends to disappear as unsuccessful companies  either go out of business or change their approach.  Furthermore, getting alpha managers to accept, understand and discuss their failures is not something they line up to do. Finally, many enterprises see little upside from failure analysis when they can do little to reverse the negative outcome. 

Studying successes without also looking at failures will create a misleading, if not entirely wrong,  picture of what it takes to succeed, to the detriment of the organization and the careers of senior leaders.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

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1 comment so far

  1. Kyle McGuffin on

    Thanks for having the guts to talk about failure. When I work with consulting firms they have not done a great job of being truly remarkable in one discipline. Their look and feel from their website to the services offered seem the same as everyone else. Now more than ever companies need help because the rate of change is happening so fast companies can’t keep up to what their customers want.

    Dare to be different and be truly remarkable. Great Post.

    Kyle McGuffin


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