New strategy. Will it work?

One of the most humbling moments in life is to have a business that is dying, and there is nothing you can do about it. You try all possible interventions but nothing happens. You restructure the business, but nada. Everything goes south.

No one ever wishes to be in such a position, but unfortunately, one is guaranteed to land there because businesses usually fail. Almost all the businesses that existed 100 years ago have gone under. That is life.

Yes, that is life, but that does not mean that we can sit and watch as our years of investment go under. Know when to fold, but before you fold, ensure that you have tried everything possible. That is why we come up with turnaround strategies in the hope that our fortunes will change. We try to guess how the future will unfold and make strategic choices that will perfectly fit into the unfolding future. Every executive wants to know if the adopted strategy will work or whether it will sink the ship further. How can one know for sure?

Economists will always model the plan before it is tested on the ground. This could be something like assessing the potential of a turnaround strategy of a business. At times, we depend on intuition and hope that our actions will bear fruit. Many businesses will contract external consultants who can have an independent assessment and hopefully identify the blind spots that the executives cannot see. Sometimes it works.

Unfortunately, even with the best plan, things do not always turn out right. If a business is going down, the last resort is to try all possible hacks in the hope that something positive happens. When one has gotten used to success, it is painful to sit and watch everything crumble and new competitors come and eat your pie. There is always pressure to deliver, and when it fails, there is a need for a scapegoat to blame. A manager is sent away, a department is closed, or workers are retrenched. No one wants to find themselves in such a situation.

Will it work? Only time will tell.