After much study and decades on the front lines of business, I suddenly realized there was a pattern.
There are three root causes of corporate business failure (businesses not legally tied to the life of the owner).
1. Human Dimension:
- Individual – Cognitive Bias/Counter Productive Behavior/Limiting Mindsets
- Interaction – Bad Bosses/Communication Breakdowns/Lack of Trust
- Infrastructure – Fear Based Environment/Internal versus External Focus/Systems Focused on Products/Services When Customers Want/Need Holistic Solutions
2. Managing Uncertainty:
- How we make decisions – Intuition/Analytical/Sense Making
- How we manage risk – Risk Types/Risk Balanced Teams/Teach Entire Organization How to Take Smart Risks
- How we plan for the future – Foresight/Future Priming/Seeing What Others Don’t
3. Maximizing Resources – identify and achieve optimum utilization of all available resources:
- Hidden Assets – Undervalued and Intangible Assets/Unidentified Employee Capabilities/External Resources, example: Employer Training Grants (tip: if IBM qualifies, so can you)
- Creativity/Innovation – Overcome Not Invented Here Syndrome/Shelved IP at Major Corporations and Educational Institutions/Establish Constructive Failure Boundaries Where Innovation Can Thrive
- Relationship Capital – Transform Critics into Raving Fans/Become Customer Centric and Eliminate “Bad” Profits/Build Dynamic Capabilities – Connect with Stakeholders to Build Solutions Rather Than Limiting Opportunities to Just Products and Services
I decided that if these were the root causes of business failure that any solution would have to address all of these areas. The Root Causes of Business Failure became the Core Competencies.