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How Successful Businesses Fail
(and how a good consultant can help you avoid the problem)

The focus of my consulting over the years has been on survival issues for growing organizations.

Even very successful companies can get off the success track. This is very hard for some businesses to understand. But many business leaders wonder why current success is so frightening. The answer is that they don't know exactly what they did to produce the success!

How can successful businesses fail?

One common cause of possible failure is operating without a plan. An organization working without a blueprint cannot replicate past actions that proved successful.

A second trigger for unexpected failure comes from culture problems. Every organization has a personality. Often it comes from the founder, the owner, or a magical group of people who work so well together they adopt a group norm (what can be called the corporate culture) that binds them together as success comes.

But success brings growth and change. All of a sudden the organization is expanding exponentially. That speedy growth can mean that the corporate culture that achieved the success is lost or diluted by the new people hired.

The result? Successful companies can fail because of their success if they don't take the proper steps. A list follows this discussion that details how this can happen.

One Helpful Strategy

Planning is the first step in the long range survival of any growing organization. Success that comes without a plan is still success, and congratulations! But it's also a matter of luck, and you may not want to base the survival of your organization and the jobs of your loyal co-workers on luck. There is "insurance" available in the form of long range strategic planning.

Planning involves measuring, assessing, and documenting both your strategic advantages and disadvantages. This helps you plan your future moves in an optimistic but realistic way without planning on the availability of human and economic resources that really aren't there for you.

The planning process is also important, almost as important as the plan itself. The best plan will not be implemented by a workforce that doesn't believe in it or understand it. That means that the workforce must, whenever possible, be involved in the process that produces the plan.

Another Helpful Strategy

Another technique in avoiding failure of the successful organization involves corporate culture. You must document your culture and then react to the measurement results.

If the culture is exactly the way you want it, then the pressure is to teach it to the organization and reinforce its tenets. Measure, document and teach is the cycle... then measure again. The cycle repeats because a dynamic organization is always in a state of flux.

But rarely are all things perfect. The measurement may reveal the culture is far from perfect. Determining the direction of change and designing training instruments that can effect this change over time is work handled by experts who are available.

The best way to manage this process is through the rapport and candor developed by an outside consultant to management.

Success vs. Failure

Many people wonder what I mean when I state my specialty is helping "successful" businesses avoid failure. You might think a successful business avoids failure simply by being successful but, no, that is not the way the real world works.

Things Change

Nothing stays the same, especially in business. Your business gains often take away from others, encouraging them to do the hard work to win business back from you. People come and go, and growing enterprises run out of good people or financial resources. With that in mind, you might be interested in some of the ways I have seen successful businesses fail:

    The business does not know how they achieved their current success (lack of a system) and therefore cannot be assured of perpetuating the success as conditions change

    They have an odd definition of success (they think they are successful but aren't successful by realistic standards)

    They suffer a poorly managed evolution from one stage or cycle of the enterprise to another (growth kills the business or requires new skills that are unavailable)

    Success comes to a halt when a key person dies, quits, etc. (a poor succession plan for a family- or closely-held business can also fit this scenario)

    Poor strategic planning allows success ways to evaporate (they perceive distractions as opportunities and dissipate their resources)

    The corporate culture shifts away from the original honest vitality to another (the winning ways get lost in the shuffle, or newly hired people do not receive training in the corporate culture necessary to perpetuate it)

    A real or hidden shortage of resources stops the successful growth (lack of adequate financing or high quality human resources, etc.)

    Success ends because of surprising or unanticipated external forces (new legal obstacles, changing public tastes, etc.)

    A superior (but poorly managed) producer is acquired by a wealthy (but lesser) competitor

How to Avoid These Problems

Good planning and well researched training programs can help avoid most of the above pitfalls of success.

Free Executive Briefing

If you want your organization to continue on its success track, please call to schedule a free executive briefing on the important topics of corporate culture, strategic planning, and employee training.


We would enjoy discussing with you the way to begin the planning process, and how new techniques are available to measure and document corporate culture. Please give Tom Zoss a call today.

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Thomas Zoss
3431 S. Weeping Willow Way, Bloomington, Indiana 47403 USA
Telephone 812-332-2334, Mobile 812-345-1924 E-mail to Tom Zoss

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