Why Do Businesses Fail?
Posted on March 10th, 2010 by admin in Leadership, Operations & Strategy
By Mike Myatt, Chief Strategy Officer, N2growth
Why do business fail? Given the current state of the economy, I would say it’s a safe bet that many of you have pondered the answer to this question as we watch companies close their doors on a daily basis. The unfortunate reality is that well more than 50% of all new business ventures fail within the first three years, and especially during tough economic times, many mature, even once category dominant companies fail over time. In today’s post I’ll share my thoughts as to the real number one reason why businesses fail – It’s not what you think…
“Measuring Success” seems like a simple enough concept right? Well it is, in concept…the problem rests in the who, what, when, where, why, and how of the matter. There has always been vigorous debate surrounding the topic of success metrics, and the argument only tends to heighten during tough economic times. I’m often asked ”What success metrics do you believe are most important to measure?” Regrettably there really isn’t a canned answer as each industry, sector, vertical, and micro-vertical have unique business drivers. Furthermore, depending on how a business is positioned, where it is in its maturation lifecycle, or what its current financial condition looks like will dictate which factors may be most important to measure. That said, in today’s blog post I will attempt to provide some general guidelines that will be useful to any business wishing to analyze success metrics.
I have read some interesting articles and blog posts of late on the subject of CEO term limits, and felt this topic worthy of discussion. You should know from the outset that I fundamentally disagree with the concept of CEO term limits, and quite frankly I cannot really come up with a valid reason for supporting such a regressive concept. Any such argument in my opinion is rooted either in flawed business logic or politically correct rhetoric. I would encourage you to read my arguments in opposition to CEO term limits, as well as to think through the ramifications on the corporate landscape if such a policy were ever to be put into place…
Are you guilty of committing initiative overload? Have you bit-off more than you can chew? As we head into the final month of Q1, it is my most sincere hope that you will take pause for a bit of reflective thinking – I would ask that you ponder the following question: “Am I so busy that I’ve lost the ability to be as productive as I need to be?” One of the most common problems facing executives is the lack of ability to remain focused on highest and best use activities. In fact many executives are their own worst enemy when it comes to taking themselves out of the “productivity zone” (see 
Leaders that cannot effectively deal with conflict are not really very good leaders are they? From my perspective, the issues surrounding conflict resolution can be best summed-up in three words…”Deal With It“. Conflict Resolution is a skill set necessary for survival in today’s business world. While you can try and avoid conflict (bad idea), you cannot escape conflict…The fact of the matter is that conflict in the workplace is unavoidable. It will find you whether you look for it (good idea) or not. The ability to recognize conflict, understand the nature of conflict, and to be able to bring swift and fair resolution to conflict will serve you well as a senior executive or entrepreneur. In today’s post I’ll share my perspective on the art and science of conflict resolution.
In a comment on yesterday’ post, Mark Oakes (
Are you shooting yourself in the foot with your pricing strategy? The simple truth is that most executives avoid the topic altogether. Let me be clear; Pricing Matters…Do you have a pricing strategy, or do you set your prices by some ethereal or arbitrary method? It is my opinion that issues surrounding pricing decisions are root level drivers to a successful business strategy. That said, I’m always amazed at how many corporations and professional advisers seem to pull their pricing out of thin air. Moreover, of those that actually go through some form of disciplined process, many of them seem to believe that once they have set the initial pricing that their job is finished and that the topic of pricing requires no further attention – nothing could be further from the truth. In today’s post I share my thoughts on how to develop a sound pricing strategy…
To restructure or not to restructure? That is the question that many a business is forced to ask at some point during their life cycle. The mere discussion of corporate reengineering can cause fear, anxiety, and in some cases even panic. This is so much the case that some CEOs will avoid restructuring initiatives at all costs. There are even some business theorists that warn against undertaking complex restructurings because of the great risks involved. My question is this…since when have fear and avoidance become prerequisites for success as a CEO? Give me real leaders who possess courage, vision, and a bias toward action, and spare me the timidity of mediocre managers posing as leaders. In today’s post I’ll examine the benefits of, and the need for corporate reengineering…
While success is normally considered to be a good thing, unless you’re prepared to handle it, success can quickly complicate your life. Even worse, without the proper perspective, success can actually contribute to the beginning of your downfall. So my question is this: Is your success serving as a springboard for even greater success, or is it merely a temporary state, precariously positioned and ready to implode with the slightest change in circumstance? As strange as it may sound, success can often times be the precursor to failure. Success without perspective, purpose, and focus can actually cause more harm than good. In today’s post I’ll discuss how CEOs and entrepreneurs can either leverage success, or if they’re not careful, have it serve as a catalyst for a rapid downward spiral…
Whether you want to admit it or not, competition is part of your world, and likely a bigger part than you’d care to admit. Granted, exploiting the competition is not a novel concept. Even so, it is still very common to hear many executives adopt a competition neutral position. These executives simply don’t believe competition to be a significant factor in the execution of their business plan. While this may make for a nice sound bite, I don’t buy it, and if they’re truly honest with themselves, neither do they. In business you can either choose to deal with your competition (even if that means partnering with them), or you can opt to stand idly by and let the competition eat your lunch. In today’s post I’ll share my thoughts on the proper way to view your competition and how to identify competitive threats…