Sunday, April 5, 2015

Postmortem Analyses and the Seven Ways to Fail Big

The articles this week were all very interesting to me, but one thought kept popping up as I was\reading.  To me, it seems very easy for the cases to talk about mistakes that proved to be costly.  But it seems like it would be much harder for an organization to make those realizations in the moment.  Emotions run high, fallacies abound, and it is hard to make rational decisions.  In particular, I found the Carroll and Mui article on the Seven Ways to Fail Big offered postmortem analysis that would have been very difficult to produce in the middle of the strategy shift.

I'd like to take a stab at analyzing a current strategic shift using the Seven Ways to Fail Big model.  For example, Uber's move into self-driving technology on face-value meets a few of the criteria for failure.  Self-driving cars could be considered "pseudo-adjacent" to its actual service of connecting drivers with spare driving capacity to customers in need of a ride.  In addition the amount of time, effort, and money invested in a new technology could prove to be a costly mistake if the commercial applications do not pay off (or the regulatory framework does not allow for its use). While obviously I was not in the boardroom of Uber when the investment decision was made, I would hope that there were individuals responsible for playing devil’s advocate in the organization and making sure there was a panel that thoroughly vetted the decision.

The Coherence Premium, by Leinwand and Mainardi, is another example of an analysis tool that seems to be substantially more useful after the fact than during the strategic change.  Like Justice Stewart’s definition of pornography, it seems that the authors are saying that you will know coherence when you see it.  Successful coherence is difficult to identify, because with the exception of conglomerates, every organization believes that their strategy is coherent.  If an organization does not correctly identify and manage its capabilities system, it risks thinking it is coherent when in fact it is not.  Only in hindsight is coherency identified.

Both of the analysis tools we read about this week are useful for post-mortem analyses.  But organizations have to work diligently and deliberately to apply these tools to decisions as they are being made.

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