Diagnosing start-up failures – and learning from them

A great majority of entrepreneurial start-ups fail.  These failures have many “presenting symptoms” but one root cause – decisions (overlooked, poorly made, poorly executed).  Ultimately “all faults are decision faults” (see October 10, 2008 post).  If you do a root cause analysis on any failure by asking “Why?” or “What caused the cause?” you will ultimately reach a decision failure as root cause.

Smart folks learn continuously and especially from failure; others not so much. At Decision Driven® Solutions we capture our learning within a set of decision patterns.  These patterns break down any business or engineering problem into a set of discrete, loosely-coupled decisions in which each decision represents a fundamental question/issue the demands an answer/solution.  The patterns are arranged in the form of a Decision Breakdown Structure (DBS) that guides the way to attack a complex strategy or design problem as a branching, layered hierarchy of choices to be made. The pattern includes the decision (questions) and the typical criteria to be considered when evaluating alternatives.

We offer a Decision Driven® Failure Analysis (aka post-mortem) service in which we quickly reverse engineer the decisions that went into a business or product failure, i.e. turn implicit decisions hidden in other forms of documentation into an explicit decision model of the project.  By starting from a proven decision pattern, we can quickly identify the unknowns that need to be known and ask the entrepreneur or engineer to fill in the gaps in their documentation.

The end product of this analysis is isolation of one or more faulty decisions and an assessment of why the decision(s) failed.  At this point, there are two possible uses for this knowledge.  We may be able to use the DBS to help the customer build a recovery plan to salvage maximum value from the failed project, e.g. re-purpose some of the products for another application.  Even if there is limited salvage value, we can offer them an improved decision pattern that they can use as part of their process to prevent similar decision faults from sinking a future start-up or project.

If you are in the business of helping entrepreneurs succeed and want to reduce the number of start-up failures that your clients experience, please consider doing your next post-mortem as a Decision Driven® Failure Analysis.  Contact the Decision Driven® Solutions team at solutions@decisiondriven.com to learn how.

About decisiondriven

Innovator in Decision Management, Systems Thinking and System Engineering methods and tools
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