Many big companies, names, and brands that are loved and revered often succumb in time, mainly due to their own folly. Look at the once-invincible Kodak, the erstwhile high-flying Kingfisher Airlines, or the seemingly infallible Ambassador Cars. In the unforgiving world of modern business, they failed to adapt—and eventually perished. Many businesses fail to address this basic truth.
Every business is tested for endurance and accomplishment, but only a few extract strength and wisdom from their trying experiences. Even the infallible Motorola and Lehman Brothers buckled. Companies like Xerox, Mafatlal, and Khataus, once profiled as excellent ones to emulate, all failed to live up to their reputations. Each committed some mistake or the other.
Instances of business bloopers are plentiful. Compromising quality to save on costs is often a big blunder. Some businesses feel that cost is king, sacrificing excellence to enhance profits. An organisation that has suffered from quality miscarriages is J&J. A string of manufacturing snags has threatened its flaunted brand image.
We are surrounded by family businesses, big or small. Family businesses are often seen as stable yet conservative and outdated. Their behaviour is sometimes irrational and non-transparent. This dichotomy is the problem. Having too many useless family members without a clear chain of command and succession plans, with feuds preceding collective decision-making, without plans for professionalism to substitute for lack of internal talent, are all avoidable servings on the plate of family businesses.
The world of business is rather bizarre. Globally, over $2 trillion worth of transactions chase the mirage of mergers and acquisitions (M&A). However, believe it or not, three out of four transactions fail. Google’s taking over of Motorola, or Daiichi Sankyo’s acquisition of Ranbaxy were all botched. Beware, M&A is a mug’s game.
Many times, corporates desire to enhance profits, superseding good governance principles. Enterprises have cheated in plenty over the years. Many involved often make the who’s who listing. In the past few years, scandals have hit big names, like BP, Volkswagen, HSBC, Reebok India, and Wells Fargo. There is enough evidence to show that continuous poor governance ultimately takes businesses into oblivion.
‘Innovation’ is imagining the impending—the power that enables businesses to develop new offerings to meet consumer demand. Innovations could also lead to catastrophes. One of the best examples is Tata Nano, a car at an unbelievable price of three-wheelers but bombed at the marketplace!
‘Debt’ could be a killer—a double-edged sword. The blunder of over-reliance on debt is what plays havoc. Jaypee, GVK, and Essar have all suffered untold damages due to unserviceable levels of borrowings. Debts are like electric currents. Wrong connections will give you shocks, but the right ones will light up your business.
Bury the bungle
Be it good mistakes or bad ones, intentional or involuntary, catastrophic or trivial—most are neither deliberated on nor diagnosed. It is not in the human genes to bring our muck out from the closet and use the open air to cleanse. We usually allow the grime to settle on its own or hope it evaporates someday, even at the peril of the stink sullying the business air around.
The last words
This book is an attempt to make the readers— hopefully—wiser by analysing some famous, frequent and common mistakes which businesses have committed over time. It provides with abounding real-life instances of ‘who’ encountered the business quagmires and ‘how’ did they fall into the occupational snags and snares, more importantly, ‘what’ are the possible lessons to be learnt to fix the blunder booby traps.
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