In biology, at least 99.99 percent of all species that have ever existed are now extinct. In business, more than 10 percent of all the companies in America disappear each year. And yet, the fact of failure is largely ignored by conventional economic theories.
Business gurus praise contemporary success stories, conveniently ignoring the fact that many of these companies fall on hard times soon after receiving their acclaim. For example, Enron was “praised to the skies” for its dynamism and innovative thinking right up to the point when it became the poster child for corporate greed and corruption.
In Why Most Things Fail: Evolution, Extinction, and Economics, Paul Ormerod explains the pervasive nature of failure in the world of human societies, in biology, and in economics, and shows how we might better understand and cope with it.
As head of the Economic Assessment Unit at The Economist, Ormerod held the post of Director of Economics at the Henley Center for Forecasting in England. He has taught economics at London and Manchester Universities and founded the consulting firm Volterra.
This summary will explain the reasons behind the failure of brands and entire companies, and it will reveal what your business can do to avoid this fate.
