Good companies always strive to be better and a potentially useful way to catalyze such improvement is to consider how analyst and public criticism might be used to institute corporate change. By parallel, managers themselves might similarly benefit from “reverse-engineering” the criticism of not only outsiders but of their own colleagues: considering both parties as their benefactors on the road to greater performance. In both cases, however, constructive use of criticism only requires a dose of humility and an honest desire to make things better.
One of the biggest mistakes that companies made during the recent crisis was the mass laying off of people to cut costs. Subsequent stock price performance proved its unpopularity with investors while numerous studies over the last decade demonstrated the precedent for its long-term, damaging effects on company performance. Not to mention are layoffs’ adverse consequences for scores of employees and their families. Read more
You can’t do much to sugarcoat an outrageously bad decision. But it’s important to know the difference between a one-time error in judgment and a decision to pursue a critically flawed strategy — in fact, your future career may depend on knowing the difference.
Harvard Business Review Blog
The most recent issue of Harvard Business Review on the management of failure reminds me of some important business lessons I learned long ago from one of my older brothers. A successful furniture designer and craftsman, he lost his entire business in a fire: then slowly rebuilt an even stronger one. Some of those same lessons surfaced again as I shared my own stories of failure and success on a recent long haul flight with a fellow entrepreneur. That conversation memorably began with my counterpart tossing back a scotch and soda then saying to me, “I remember when I lost my first million…”