We keep hearing news stories and anecdotes about this “successful business” or that “entrepreneur who hit the big time with his business idea”. These stories often leave us in a state of wonder and awe, and we find ourselves wanting to know more. More about how the business became a success, more about what inspired a normal working guy (or girl) to think of a novel and brilliant business idea, and more about how someone can start a business, and make her dreams a reality.
We become so fixated on these stories that, all too often, we overlook the other side of that reality: that just as businesses become big and successful, there are also companies – perhaps in greater numbers – that fail.
What many often fail to realize, is that they can also learn from business ideas that tanked and business ventures that never really got off the ground. Better, they can also learn a lot from businesses that were able to get started, and then, somewhere along the way, something went wrong. They were having problems and great difficulty in maintaining their operations, until most of them declared bankruptcy or liquidated
Some had to close up shop because of economic upheavals that simply did not provide any room for new businesses to try making headway in their operations. Others blame the actions of competitors, and even the business challenges that are inherent in the market. There are also those businesses that blame the lack of resources for the failure.
However, this makes one wonder: if the economy, the competitors, the market and its challenges, and the availability of resources are at fault, how come other businesses were able to survive, and even become hugely successful? At this point, the most logical reason that comes to mind is mismanagement. More often than not, it is about how the business was unable to manage its strategies very well.
Strategic management is considered to be one of the most vital activities of any organization, since it encompasses the organization’s entire scope of strategic decision-making. Through the strategic management process, it allows the organization to formulate sets of decisions, actions and measures – collectively known as strategies – that are subsequently implemented in order to achieve organizational goals and objectives.
Strategy formulation – where the organization’s mission, objectives, and strategies are defined and set – is the first stage in strategic management. That is where it all begins, which means that, if the organization was unable to complete that stage with very good results, then the company’s strategy management is already a bust from the start. Many organizations fail during the first stage, in the sense that they are unable to come up with strategies that will potentially take the organization where it wants to be.
