Billion Dollar Lessons Learning From Others Failures

Billion-Dollar Lessons
Learning From Others’ Failures—
So They Won’t Happen to You

Five Levels of Insight
Strategy is key.
Seven strategies are most often associated with failure.
Seven mistakes crop up most often.
Heightened awareness won’t stop failures.
The solution is an independent “devil’s advocate” review of strategy.

1. Strategy Is Key
46% of Failures Stemmed From Bad Strategies—Not From Bad Luck or Poor Execution

2. Seven Strategies Most Often Associated With Failure
1. Illusions of Synergy
2. Faulty Financial Engineering
3. Deflated Rollups
4. Staying the (Misguided) Course
5. Misjudged Adjacencies
6. Fumbling Technology
7. Consolidation Blues

3. Seven Frequent Mistakes
1. Underestimating the Complexity That Comes With Scale
2. Overestimating the Power That Comes With Size
3. Assuming Loyal Customers
4. Overpaying
5. Playing Semantic Games
6. Not Considering All Options
7. Misunderstanding or Mishandling Risk

4. Awareness Is Not Enough
Numerous psychological studies and extensive examples from the research for the book show that just trying harder won’t prevent failures. Something has to change about how strategy is set.

5. The Devil’s Advocate Review
Led by outsider with no stake in outcome.
Based on debate.
Relies on role-playing.
Tests against numerous scenarios.
Occurs early enough that an idea can be killed without having someone lose face.
Ideally, happens at three points as the strategy process unfolds but can be done all at once if time is of the essence.

Biography
Paul Carroll has spent nearly three decades writing, lecturing and consulting on business issues. He spent 17 years at the Wall Street Journal, which twice nominated him for Pulitzer Prizes. He wrote the best-selling Big Blues: The Unmaking of IBM (Crown, 1993). He founded and edited Context , the first of what became known as “new economy” magazines; the magazine helped senior executives think about the strategic implications of information technology. Paul is also a former partner with Diamond Management & Technology Consultants. His latest book is Billion-Dollar Lessons: What You Can Learn from the Most Inexcusable Business Failures of the Last 25 Years (Portfolio, 2008). A companion article, Seven Ways to Fail Big , appears in the September 2008 issue of the Harvard Business Review . More information is available at www.billiondollarlessons.com

Billion Dollar Lessons Learning From Others Failures

by jdbsf on Jan 31, 2009

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