Paul B. Carroll and Chunka critically studied business failures of large organaztions and wrote their findings in their book – “Billion Dollar Lesson”. It’s a good read.
Following summarizes the value proposition of the book.
Common reasons for business failures
- “Synergy” – Companies overestimated the benefits of a merger.
- “Financialengineering” – Firms aggressively manipulated accounting or financing.
- “Roll-ups”–Companies bought small local companies to create a conglomerate.
- “Stayingthecourse” – Companies stuck to past methods and did not adapt to changing times.
- “Adjacencies”– Businesses often failed when they moved into adjacent markets.
- “Ridingtechnology” – Most firms don’t succeed in bringing new technologies to new markets.
- “Consolidation” – Companies bought too many competing firms or became consolidators.