Why Companies Fail

At the height of the global bull market a few years ago, business giant Kmart stumbled, going from one of the most admired companies to one of the largest bankruptcies in history. The same fate befell several seemingly impenetrable corporation, such as Enron, WorldCom, Polaroid, and others. Were these fantastic failures caused by a fickle stock market and a turbulent economy? Did they fall victim to the dot-com bubble of the late 1990s? Not according to business journalist Mark Ingebretsen in Why Companies Fail. As you'll discover in this groundbreaking book, all of these companies exhibited one or more of the ten characteristics of a doomed company--characteristics that have been shared by failed companies for decades. Kmart, Enron, WorldCom, and other corporations might have been saved if their executives had recognized sooner that their companies were exhibiting one or more of these characteristics. Ingebretsen, with the help of some of the world's most noted business management experts from the Turnaround Management Association, describes in startling detail each of the ten big reasons companies fail, including: - Letting stock price dictate strategy - Ignoring customers - Fighting wars of attrition - Innovating too much or too little - And more Inside these pages, you'll discover practical methods for identifying these fatal characteristics in your own organization and preventing them from leading to failure. No matter what the size of your company, the lessons in Why Companies Fail could be the difference between long-lasting success and sudden flameout. And before any company can go from good to great, it's got to be on the right track in the first place.This valuable guide will show you how.

If you want your startup to succeed, you need to understand why startups fail. “Whether you’re a first-time founder or looking to bring innovation into a corporate environment, Why Startups Fail is essential reading.”—Eric Ries, founder and CEO, LTSE, and New York Times bestselling author of The Lean Startup and The Startup Way Why do startups fail? That question caught Harvard Business School professor Tom Eisenmann by surprise when he realized he couldn’t answer it. So he launched a multiyear research project to find out. In Why Startups Fail, Eisenmann reveals his findings: six distinct patterns that account for the vast majority of startup failures. • Bad Bedfellows. Startup success is thought to rest largely on the founder’s talents and instincts. But the wrong team, investors, or partners can sink a venture just as quickly. • False Starts. In following the oft-cited advice to “fail fast” and to “launch before you’re ready,” founders risk wasting time and capital on the wrong solutions. • False Promises. Success with early adopters can be misleading and give founders unwarranted confidence to expand. • Speed Traps. Despite the pressure to “get big fast,” hypergrowth can spell disaster for even the most promising ventures. • Help Wanted. Rapidly scaling startups need lots of capital and talent, but they can make mistakes that leave them suddenly in short supply of both. • Cascading Miracles. Silicon Valley exhorts entrepreneurs to dream big. But the bigger the vision, the more things that can go wrong. Drawing on fascinating stories of ventures that failed to fulfill their early promise—from a home-furnishings retailer to a concierge dog-walking service, from a dating app to the inventor of a sophisticated social robot, from a fashion brand to a startup deploying a vast network of charging stations for electric vehicles—Eisenmann offers frameworks for detecting when a venture is vulnerable to these patterns, along with a wealth of strategies and tactics for avoiding them. A must-read for founders at any stage of their entrepreneurial journey, Why Startups Fail is not merely a guide to preventing failure but also a roadmap charting the path to startup success.

What was the real reason for the failure of South Canterbury Finance and could it have been saved? Was it really the fall in coal prices that sank Solid Energy? Why did Pumpkin Patch collapse? Why do over 2000 small businesses go into liquidation every year in New Zealand? Why did David Ross defraud over $100 million from Kiwis¿ life savings in the failure of Ross Asset Management? Why did the leaders of these businesses make decisions that ultimately saw the demise of the business they led? Why do we all make decisions that we know are not likely to be good for us, whether in business or in life? To take a journey through the failures of kiwi business requires a journey through all our irrational minds. While failures were caused by factors such as excessive debt, no cash, external forces, weak governance, poor skills, failure to pay taxes and more, all can be linked back to the decisions people did or didn¿t make. This book is backed by the extensive research of leading academics, and interviews with the CEOs, CFOs and board members of failed businesses. It includes discussions with journalists, fraudsters, insolvency experts, lawyers, official information requests and much more. The author also shares details about his experiences within the corporate world, and the price he paid suffering a significant breakdown and four years battling depression dealing with the often irrational world that exists within business Take a journey through the irrational mind that we all share and see what part that mind plays in the success and failure of business. Share the background and the stories of those at the heart of these failures and many other real-life events in business in New Zealand and from around the world.

For the want-to-be entrepreneur thinking about taking the leap, the boot-strapped entrepreneur trying to energize a business three or four years in, and the venture-backed entrepreneur trying to scale, Why Startups Fail shows you the key mistakes new ventures make—and how to avoid them. Nearly everyone has an idea for a product they could build or a company they could start. But eight out of 10 new businesses fail within the first three years. Even only one in ten venture-backed startups succeeds, and venture capitalists turn down some 99% of the business plans they see. The odds appear to be stacked against you! But entrepreneurs often make the same avoidable mistakes over and over. Why Startups Fail can help you beat the odds and avoid the pitfalls and traps that lead to early startup death. It’s easy to point to successes like Apple, Google, and Facebook. But the biggest lessons can come from failure. What decisions were made, and why? What would the founders have done differently? How did one company become a billion-dollar success while another—with a better product and in the same market—fail? Drawing on personal experience as well as the wisdom of the Silicon Valley startup community, serial entrepreneur, venture capitalist, and blogger Dave Feinleib analyzes companies that have come and gone. In short, powerful chapters, he reveals the keys to successful entrepreneurship: Excellent product/market fit, passion, superb execution, the ability to pivot, stellar team, good funding, and wise spending. In Why Startups Fail, you’ll learn from the mistakes Feinleib has seen made over and over and find out how to position your startup for success. Why Startups Fail: Shows venture-backed startups and boot-strappers alike how to succeed where others fail. Is equally valuable for companies still on the drawing board as well as young firms taking their first steps. Takes you through the key decisions and pitfalls that caused startups to fail and what you can learn from their failures. Covers the critical elements of entrepreneurial success.

Bob Pittman and AOL Time Warner. Jean Marie Messier and Vivendi. Jill Barad and Mattel. Dennis Kozlowski and Tyco. It's an all too common scenario. A great company breaks from the pack; the analysts are in love; the smiling CEO appears on the cover of Fortune. Two years later, the company is in flames, the pension plan is bleeding, the stock is worthless. What goes wrong in these cases? Usually it seems that top management made some incredibly stupid mistakes. But the people responsible are almost always remarkably intelligent and usually have terrific track records. Just as puzzling as the fact that brilliant managers can make bad mistakes is the way they so often magnify the damage. Once a company has made a serious mis-step, it often seems as though it can't do anything right. How does this happen? Instead of rectifying their mistakes, why do business leaders regularly make them worse? To answer these questions, Sydney Finkelstein has carried out the largest research project ever devoted to corporate mistakes and failures. In WHY SMART EXECUTIVES FAIL, he and his research team uncover-with startling clarity and unassailable documentation-the causes regularly responsible for major business breakdowns. He relates the stories of great business disasters and demonstrates that there are specific, identifiable ways in which many businesses regularly make themselves vulnerable to failure. The result is a truly indispensable, practical, must-read book that explains the mechanics of business failure, how to avoid them, and what to do if they happen.

Why did some firms weather the financial crisis and others not? This book investigates inner workings of over a dozen major financial and nonfinancial companies, reveals what went wrong and proposes a remedy. Regulators too must learn from past mistakes and require "constructive dialogue" for companies they supervise.

Former Procter & Gamble Vice President for IT and Shared Services, Tony Saldanha gives you the keys to a successful digital transformation: a proven five-stage model and a disciplined process for executing it. Digital transformation is more important than ever now that we're in the Fourth Industrial Revolution, where the lines between the physical, digital, and biological worlds are becoming ever more blurred. But fully 70 percent of digital transformations fail. Why? Tony Saldanha, a globally awarded industry thought-leader who led operations around the world and major digital changes at Procter & Gamble, discovered it's not due to innovation or technological problems. Rather, the devil is in the details: a lack of clear goals and a disciplined process for achieving them. In this book, Saldanha lays out a five-stage process for moving from digitally automating processes here and there to making digital technology the very backbone of your company. For each of these five stages, Saldanha describes two associated disciplines vital to the success of that stage and a checklist of questions to keep you on track. You want to disrupt before you are disrupted--be the next Netflix, not the next Blockbuster. Using dozens of case studies and his own considerable experience, Saldanha shows how digital transformation can be made routinely successful, and instead of representing an existential threat, it will become the opportunity of a lifetime.

From the ill-fated dot-com bubble to unprecedented merger and acquisition activity to scandal, greed, and, ultimately, recession -- we've learned that widespread and difficult change is no longer the exception. By outlining the process organizations have used to achieve transformational goals and by identifying where and how even top performers derail during the change process, Kotter provides a practical resource for leaders and managers charged with making change initiatives work.

Fit to Bust is an eye-opening investigation of the causes of that failure - whether it's a global financial crisis or a single disastrous decision that undermines years of hard work. Tim Phillips casts a wry eye over the biggest business disasters of recent history to provide you with the inside story behind the news stories, from the collapse of Enron to the downfall of Woolworths, to understand why smart people make bad decisions. With a particular focus on business detail, management and decision making, Fit to Bust takes us inside the mind of the CEO to teach us how to spot a disaster and look critically at the companies you work for, invest in or buy from. With case studies and interviews, learn why the recession happened and how to avoid the mistakes that led to it.

WALL STREET JOURNAL BESTSELLER Every business owner dreams of success, but the majority of businesses are doomed to fail. This book offers a journey through the pitfalls that cause 90% of companies to crash—and the crucial remedies entrepreneurs can use to avoid (or fix) them. Kim Hvidkjær was 29 years old when he became a millionaire. Two years later, after a cluster of disasters, he found himself basically broke. Now, having rebuilt his fortune as the founder of several successful enterprises and studied thousands of failed startups, Hvidkjær has become an expert in failure: what it means, what it looks like, and the strategies that business owners can use to prevent it. In How to F*ck Up Your Startup, he takes us on an entertaining and enlightening journey through the complex patterns of failure in the life cycle of a business, covering: Attitude mistakes Business model missteps Market research snafus Funding and financial blunders Product development errors Organization oversights Sales slip-ups Growing pains Most important, he tackles what to do when your business has gone wrong. Hvidkjær fleshes out a tangible, usable blueprint for entrepreneurs looking to learn (the easy way) from the mistakes of businesses gone before. Chock-full of easy-to-follow business lessons that will keep you from f*cking up your startup, this down-to-earth guide offers crucial, actionable advice for seasoned business owners and startup founders alike. A masterclass in failure, How to F*ck Up Your Startup is required reading for reaching success.