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#26: Learning From Failure

Posted By Mark Haas CMC FIMC, Monday, April 13, 2009
Despite management's best efforts, including advice from consultants, to improve a company, sometimes things go wrong and a company fails. Shouldn't we, as consultants, be able to see these failures coming?

Granted, a consultant's experience in a range of industries and exposure to a lot of business settings should give us a good perspective and sensitivity to imminent problems with a business that may lead to failure. However, we are not totally in control of all the factors that lead to business success, even if we would prefer to take credit for the success of our clients. Sometimes a business falls victim to a flawed strategy, a distressed economy or shifting market. We may not be able to help as much as we'd like.

It is possible, however, that we can better serve our clients by increasing our sensitivity to and awareness of the range of possible failure modes of a business. If we understand why businesses falter, instead of just focusing on why they succeed, we may be able to head off a bad situation for our client. We spend so much time reading about and trying to implement "best practices" that we may be missing a time bomb in our midst. It is highly unlikely that any company failed because they were trying to; most were trying their best but never saw it coming until it was too late. This is where you, as a consultant, come in.

Tip: Regardless of your particular discipline, part of your job is to serve as an independent and objective early warning system for your clients. In addition to reading about best practices, spend some time learning about business failures. Learn the patterns and early signs of businesses like your client's that failed or got into trouble. Collect articles of companies that, in hindsight, made a series of bad decisions or, if they were more aware, might have been able to prevent problems. Even read about some of the classic business failures, despite management's best efforts, so that you can recognize possible warning signs with your own client. Consider each classic failure and see what lessons you can learn that might apply to your client.

© 2009 Institute of Management Consultants USA

Tags:  consultant role  learning  recommendations 

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