Why Businesses Fail and What Can Be Done About it
Professor Morgen Witzel, Fellow At the Centre for Leadership Studies, University of Exeter, recently invited me to a lecture he gave at Gresham College. The titleof the lecture was the same as the title above.
Unfortunatly I was unable to attend the lecture, but I read the script. It is so good I asked Morgen for his permission to share it with the SMF community. Unlike many papers from academics it is not only readable, it is also a pleasant read, and has much more impact for that reason, and without any compromise on substance. It is a paper packed with insights.
In opening remarks he says, "I am not referring here to genuine accidents, which can and do happen and must be allowed for. Nor am I referring to the kinds of small failures that happen as a result of any heuristic, trial-and-error process. There are some activities like innovation where people fail all the time. You could even argue that innovators have to fail sometimes, or else they never learn. But these are small failures in controlled environments, that do no harm to the organisation or its customers and employees. I am referring to things which were preventable, which could have been stopped if management in the firms responsible had been doing their jobs".
Morgen also relects on the fact that, "there is a tendency to be blasé about business failures; well, it’s only money. But not always. Management incompetence and failure kills companies, which destroys value. It throws people out of work, meaning that sometimes they their lose their homes, their futures and their dreams. And sometimes, that incompetence kills people too. So, it really does matter". This gives you a sense of the passion that drives his writing, and why it is such compelling reading.
By now I hope you are already intrigued, but in case you are not yet convinced here is another extract, "When business fail, we tend to blame the people at the top. We point the finger at the chairman or the CEO and say, this is your fault. You must pay. You must lose your job, stand trial for corruption, etc. And, it is right that we should hold business leaders to account. However, we must be careful of assigning them sole blame for what went wrong. Sometimes the CEO or chairman is not the cause of the problem. Indeed, sometimes he or she is the symptom". If you want to understand the thinking behind this, I suggest you read the lecture script. Email us if you would like a PDF copy
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The lecture based on Morgen's latest Book Managing for Success (2015).
About the book Stefan Stern, Financial Times columnist and Visiting Professor at Cass Business School said, "This is an intelligently argued and impressively thorough handbook, which ought to be lobbed in to boardrooms and executive offices. Businesses and organizations find so many ways to fail, and Morgen Witzel has charted the most important ones. Read it, and think".
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