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TIP OF THE DAY: THE VALUE OF FAILURE
Failure is one of the hardest pills to swallow. Commercial failure is obviously not good: a continuous negative cash flow is bad news for all stakeholders. But there are degrees of failure and it can be measured:
a) Failure can lead to success. Ridley Scott scored a commercial failure with Blade Runner but went onto make some of the most commercially successful movies of all time.
b) How close was the endeavour to the strategic fit with the firm? Did the development and commercialisation cause long term problems?
c) Did the firm pick up any technical expertise that can be applied to other ventures?
d) Did the organisation pick up any business competencies along the way?
e) As a strategic option, was this the right thing to do? Knowing the wrong direction helps focus activity towards the right path.
f) What did we learn about our customers? Coke learned a lot about their customers when it brought out New Coke.
A good analysis can yield positive outcomes and convince shareholders to embark on similar projects in the future.
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