In this week’s reading Seven Ways to Fail Big by Paul B. Carroll and Chunka Mui, the authors postulate seven “sirens” that lead companies astray and have ultimately resulted in numerous slow deaths.
All of the examples in this piece were multi-million dollar companies, who had the budget and personnel to avoid these big mistakes.
“Fail fast” is a buzz term that often gets used in entrepreneurial circles. Trends and technology in general are moving faster than ever, so for entrepreneurs iteratively testing and throwing out what doesn’t work is practically a necessity, because they are on tight budgets.
Perhaps if large corporations learned to fail fast they would avoid the “seven sirens.”
In his NYT article G.E. Goes With What It Knows: Making Stuff, Steve Lohr asserts that adaptability amidst change is a prized attitude among corporate leaders:
“Strategies are useful […] but only if they can quickly adjust to nasty real-world surprises.”
The ideas of “fail fast” and “constant entrepreneurship,” albeit trendy, do represent some positive habits that large corporations can benefit from.
1. Talking to customers – Entrepreneurs with the “fail fast” mentality talk to potential customers. This is not just performing market research, but actually sitting down with potential customers and finding out what they want. The costly merger and un-merger of UnumProvident could have been avoided if they had spoken to the customers.
2. Lots of Little Experiments – Entrepreneurs don’t spend a lot of time (or money) getting started. They build prototypes, test them, and strive to iteratively make them better. If IBM had worked this way on OS/2 perhaps the product would have had some longevity, instead of becoming a money pit.
3. Making Money – Entrepreneurs have to make money to survive. Along with talking to customers and experimenting, they are trying to find a fast path to revenue. If a product can’t generate revenue, it is not likely to be successful, and any entrepreneur will tell you that it’s better to find that out sooner than later.