THE FAILURE RATE PROBLEM:
Failure Has Become Normalized
Everywhere you look, failure dominates the landscape.
NEW PRODUCTS
70%-95% failure rate
Source:
Harvard, CB Insights, Product Development Institute
MERGERS & ACQUISITIONS
70%-90% failure rate
Source:
McKinsey, PwC, HBR, KPMG
DIGITAL TRANSFORMATIONS
70%-95% failure rate
Source:
Gartner, MIT CISR, McKinsey
ORGANIZATIONAL CHANGES
60%-70% failure rate
Source:
Prosci, Bain, Towers Watson
STRATEGIC INITIATIVES
60%-90% failure rate
Source:
Booz Allen, HBR, Gartner
STARTUPS
90% failure rate
Source:
CB Insights, Stanford
Chalking failure up to portfolio math, creative destruction, market Darwinism, the entrepreneurial myth, statistical inevitability or the cost of innovation doesn't solve the problem.
Instead, we have to ask:
Have we mistaken the prevalence of failure for its inevitability?
THE CONVENTIONAL EXPLANATIONS
If it's not "finger-pointing", its "something that's out of our control".
Poor Execution
Poor execution, weak project management, lack of accountability.
Competition
Competitors moved faster, offered better products, or lowered prices.
Market Conditions
Economic downturns, regulatory changes, or shifting customer demand.
Bad Timing
The initiative entered the market too early or too late.
Insufficient Funding
Insufficient investment, budget cuts, or premature loss of financial support.
Marketing & Sales
Weak messaging, poor positioning, inadequate promotion, or ineffective sales execution.
These explanations aren't completely wrong. But if they addressed the real problem, it should have been solved by now.
Despite technology, research and endless funding, failure rates remain stubbornly high.
THE CONVENTIONAL SOLUTIONS
Organizations have invested billions on efforts to improve success rates.
Project Management
PMOs, governance, Agile, Scrum, and better execution discipline.
Strategic Planning
Long-range planning, strategic frameworks, and implementation roadmaps.
Market Research
Customer research, surveys, segmentation, and competitive intelligence.
Innovation Programs
Design thinking, innovation labs, ideation workshops, and product development.
Technology
CRM, AI, analytics, ERP systems, automation, and digital transformation.
Leadership Development
Executive coaching, organizational development, and change management.
These solutions aren't necessarily wrong, and many create value.
But if these solutions worked, why is the failure rate still so high?
THE CONSEQUENCES OF NORMALIZATION
High Failure Rates Persist
25% Failure Rate for New Businesses
US Dept. of Commerce
71% Failure Rate for PE-Funded Businesses
CB Insights
3,200 VC-Funded Failures in 2023
The New York Times
80% Failure Rate for Scaling Programs
McKinsey
57% of Acquisitions Destroyed Shareholder Value
KPMG
70% of Organization Transformations Fail
McKinsey
What if the answer is hiding in plain sight?
Maybe the problem isn't how we manage business initiatives. Maybe it's how we architect them.
