Why Good Companies

Go Bad

Presented by: Deepti Lathwal

Source:
 Harvard Business Review’s on Culture and
Change and Crisis Management
 Harward Business Essentials
CRISIS MANAGEMENT
 The Well-Timed Strategy by Peter Navarro
 Why Corporate strategies fails by Donald
 Why do some of the best companies
languish?

Because they insist on doing only what has worked in the

past.
Or
We can say that because they are Married to the past.
They can’t divorce themselves from what worked in the
past, whether it’s a core strategy, a key customer,
product, service, culture or method. And there are many
more reasons which we will discuss later.
Recent examples of companies that have gone from
good to bad include Sainsbury’s, Parmalat, Lego,
satyam, Hindustan motors to name just a few
prominent examples.
Microsoft, for years the gold standard of corporate
excellence, stands accused of slipping into mediocrity.
A few of these fallen stars— IBM or Ericsson-regain
their stride,
but most—such as Xerox, KMart kodak, Laura
Ashley—hobble, Atlas cycle, Sahara airlines,
hilton, Devoo on as pale shadows of their former
glory, or like NatWest, Andersen and Padmini
motors—disappear altogether.
 Most leading businesses owe their
prosperity to a fresh competitive
formula- a distinctive combination of
stratgies, relationships, processes
and values that sets apart them from
the crowd.
Five categories of commitments
comprise the success formula:

• Strategic frames: What we see when we look

at the world, including definition of industry,
relevant competitors and how to create value.

• Processes: How we do things around here

entailing both informal and formal routines.
Resources: Tangible and intangible assets that we
control which help us compete, such as brand,
technology, real estate, expertise, etc.

Relationships: Established links with external

stakeholders including investors, technology
partners or distributors

Values: Beliefs that inspire, unify and identify us.

Reasons behind good companies
go bad?
 Self destructive habbits.
 Obsolete technology.
 Incompetent workforce.
 Employer’s attitude.
 Accidents and Natural events.
 Product Tempering.
 Technological Breakdown.
 Economic and Market Forces.
Self-destructive habits of good
companies
DYNAMIC OF FAILURE

 Strategic frames Blinders

 Processes Routine

 Relationships Shackles

 Values Dogma
Preventing a bad situation from
becoming worse:

 Use quick and decisive action.

 Put people first.
 Be on the scene.
 Communicate liberally
 Gather facts continually
 Document your actions
 Use project management
techniques when appropriate
 Be a leader
How to Avoid above mentioned
factors:

 Heed the signals of impending crises

on time.
 Attention to details and standards.
 Look before you leap
 Don’t forget about insurance.
 Maintain relations
 Avoid technological crises.
 A sucession plan for all key positions.
 Appoint a growth Development
leader.
Crises Management:

 Organize a Planning Team

 Develop a Plan
 Many minds better than one.
 Use a systematic approach.
 Adopt the mind of an assasin
 [Know what are your companies ticking bombs]

 Test the plan

 Keep the plan up-to-date
Strategies Fall Apart When
Corporate Culture is Ignored
 corporate culture underpins critical elements of
any strategy's success or failure - such as
management practices, decision making,
performance management, and compensation -
strategies that ignore culture, however
financially and technically sound, are likely to
fail
Types of corporate culture

 Innovation and risk taking

 Attention to detail
 Outcome orientation
 People orientation
 Team orientation
 Aggressiveness
 stability
 Customer responsive
how great managers remake them
 Leadership development
 Cross culture training programs
 Restructuring
 Bringing change (organisational)
Major types of cross-cultural
training programs

 Environmental Briefings
 Provide information about things such as geography,
climate, housing, and schools
 Cultural Orientation
 Familiarize the individual with cultural
institutions and value systems of the host
country
 Cultural Assimilators
 Programmed learning techniques designed to expose
members of one culture to some of the basic concepts,
attitudes, role perceptions, customs, and values of another
culture
 Language Training
 Provide information about things such as geography,
climate, housing, and schools
 Field Experience
 Send participant to the country of assignment to
undergo some of the emotional stress of living and
working with people from a different culture
 Sensitivity Training
 Develop attitudinal flexibility
Thank you