Why Companies Fail [CHART]

While it’s useful to look at the most successful companies, there are hugely important lessons to learn from those that have failed.

A new study from Booz&Co takes a detailed look at the primary causes of giant dives in company value. Despite high profile disasters like Deepwater Horizon and massive accounting scandals, by far the biggest destroyer of value is poor strategic choices.

It’s not even close, as this chart shows:


Photo: strategy+business

Technology is accelerating faster than ever, meaning companies have to make choices constantly, and the internet and social media mean that missteps or bad information are rapidly blasted around the world. 

There’s more opportunity to make these mistakes, and their effects are faster and larger.  

Companies evaluate financial and political risks constantly. They need to do the same for strategy, competitors, and big industry shifts. Particularly essential is making sure the company is resilient, that it can survive big changes, and that success or failure is never pegged to a single strategic move. 

NOW READ: The Smartest Fast-Growth Companies Combine These 3 Strategies

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