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Be alert to “small mistakes” in management

  Very few fatal mistakes are made overnight, and they often start with some insignificant small mistakes. The reason why “small mistakes” are easy to make is that the marginal benefits of their choices exceed the marginal costs.
  In 1995, 43-year-old Christensen (famous management “innovation master”, professor of Harvard Business School) and Joseph Bauer (professor of Harvard Business School) published a paper “Disruptive Technology” on “Harvard Business Review” : The Way of Chasing the Waves, for the first time put forward the distinction between “sustaining technology” and “destructive technology”. In addition, Christensen also made a startling point: In this day and age, good management cannot save organizations from failure, and it is even the cause of failure.
  In Christensen’s view, the management of those disrupted companies often follow the principles of good management: conduct detailed market analysis, predict market demand, understand the wishes of consumers, and so on. But why are these companies falling behind? It may be surprising to say that, precisely because “they improve the performance of established products in terms of those aspects that most users in major markets have historically valued”. That is to say, path dependence in technology or mode is the main reason for the failure of excellent enterprises.
  Bill Gates may have remembered this sentence. He once revealed that for a considerable period of time, the proposals on his desk without exception advertised themselves as having the characteristics of disruptive innovation. However, even so, Gates does not think that Microsoft is a “safe” company at all-the public statement about “Microsoft is only 18 months away from bankruptcy” reflects the inner unease of the former richest man in the world.
  So, if good management can’t save organizations from ruin, what can? Is it a far-sighted corporate vision? Is it a 360-degree commercial big data analysis with no dead ends? Or is it the refinement of the 12 thinking modes advocated by a certain knowledge payment platform?
  Amar Bihaide once had a well-known theory of good money and bad money. He believed that trying to find a way to make money in a project through rapid and large-scale investment is “bad money”. Because “93% of all companies that can succeed in the end have found another way because the initial strategy didn’t work”-how is it different from a gambler to spend a lot of money on a matter with only a 7% success rate? Take a look at the shattering of the myth that mask meltblown cloth made wealth in the early days of the outbreak of new crown pneumonia. It is a typical case of short-term speculation and short-term “bad money”. In addition, the real confusion of claw machine owners who are unable to sustain themselves due to the new crown pneumonia epidemic also reflects the practical misunderstanding of entrepreneurs under the long-tail economic proposition. According to Professor Xu Xiaonian, professor of economics and finance at China Europe International Business School, the long-tail economy is a business model with a social net worth less than zero. For example, there are many entrants in the claw machine market. Those who see business opportunities simply copy them to start a business , will inevitably fall into the “bad money” trap.
  In stark contrast to the “bad money” is 3M, a company that focuses on creating diversified innovations. Obviously, it has not been messed up because of the business opportunities for sudden wealth brought about by the epidemic. On the one hand, it rejected the executive order of the President of the United States to restrict exports, and fulfilled the company’s service commitment to customers; Some deal with it calmly.
  In a word, wrong behavior comes from wrong cognition. Very few fatal mistakes are made overnight, and they often start with some insignificant small mistakes. The reason why “small mistakes” are easy to make is that the marginal benefits of their choices exceed the marginal costs. And these marginal thinking of making small mistakes are the root of the incumbent enterprises replaced by destructive innovators, and it is also the origin of a person from a mistake to eternal hatred. If decisions are made at “full cost” in the first place, that is, when all the costs of abandoning the norm are included, the benefits of making small mistakes outweigh the benefits. This also confirms Christensen’s experience – “100% persistence is easier to achieve than 98% persistence.”

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