Business Failures Teach Us About Success
An interesting series of TV programmes presented by Evan Davis was on this week which concentrated on catastrophic business decisions. This sounds like quite a depressing subject but in fact it was completely absorbing and despite being about large corporations, taught a lot of lessons that can also be learned by small business owners,
The mind of an entrepreneur can succeed spectacularly
A common theme about disastrous business decisions showed the fact that the mindset of a successful entrepreneur is both an advantage and a disadvantage. The most successful business owners are those who take a lot of risks and have an inordinate amount of self-belief. These are two characteristics when can separate you from the crowd and bring you an enormous amount of success where others have failed. The perfect example of the advantages is Richard Branson. He started Virgin Atlantic only a few short years after Freddie Laker's Skytrain business had gone under in spectacular fashion. However, Branson's determination and self-belief have resulted in an extremely successful airline which has done well in the face of many experienced critics who were sure it was doomed to failure.
The mind of an entrepreneur can fail spectacularly
And Sir Freddie Laker himself is the example of the flip side of this coin. His determination and self-belief led to his early success and ultimate downfall. What he achieved was truly great and was the inspiration behind what Richard Branson finally did. However, Sir Freddie's slef belief became ill-placed when it came to business decisions in the face of a fluctuating pound against the dollar.
So how does one avoid big mistakes?
I believe the truth is that you cannot avoid mistakes in business in much the same way that you cannot avoid them in life. However, if through your self determination you take risks whilst constantly weighing up the potential pitfalls, the secret is to make more good decisions than you do make bad decisions. It is essential to take risk and at times it is important to go ahead despite the advice of others. But if you are constantly trying and always remain positive, then the number of good decisions should far outweigh the bad ones which could ultimately lead to stupendous success in business.
The bigger they are, the harder they fall
Another interesting case study was that of Sunny Delight. Their marketing in the early days was considered one of the most successful product launches of all time. At one stage, they were within reach of knocking off Coca Cola from the top spot in terms of soft drink sales. A feat unheard of before now.
The reasons I am sure were many but I believe one of their key decisions was to have their product placed in the chill cabinets in supermarkets. This gave the impression that their orange juice was fresh and healthy, two things it most definitely was not. So when consumers started to find out the truth about the contents of the juice, sales started to slide just as spectacularly as they had risen.
And the moral of the story is...
Coca Cola is not healthy, but neither is it marketed as such. Sunny Delight was not healthy, and whilst the marketing never explicitly said that it was healthy, it was subtly suggested so. This dishonesty is what I believe led to their ultimate downfall.
Fri 20 May 2011 10:30:52