Question

Choose a large company and learn about its culture, structure, leadership, product or service, and market potential. Imagine it is three years from now. The company has failed completely. The CEO has been fired, and the company has collapsed. Based on what you knew three years ago, what sequence of events led to this complete implosion?

Provide a summary of why the company has failed – with some key junctures in the story.

Premortem steps:

1- Imagine the worst: Start the meeting by exposing that the project at hand has been a complete disaster.

2- Generate Reasons for Failure: Ask each person to write down all the reasons they can think of to explain the failure that occurred.

3- Share Reasons for Failure: Ask each person to share one item on their list and continue to go around the room until everyone has exhausted their lists. Record all reasons on a white board.

4- Brainstorm with solutions: Discuss solutions to prevent this from happening.

5- Review.

Answer 1

The Fertilisers and Chemicals Travancore Limited is a company in Kerala, engaged in the production of fertilisers and industrial chemicals.

After 3 years

The company is on the verge of winding up. No new recruitment are taking place and existing employees are forced to take the voluntary retirement scheme. The company is forced to cut allowances such as festival advance and pension from employees and is struggling to pay the creditors. Since most of the assets are kept as collateral for taking loans, almost no amount is available to shareholders on liquidation. The company's goodwill has stooped like no one else.

Reasons for failure

1. High payment to  top executives without considering the profits and financial position of company.

2. Huge investment in unnecessary plans without considering the benefits.

3. Very large investment in Capro-lactum plan which proved to be futile and waste of money since inputs can be imported at a cheaper rate than the cost of production in plant.

4. Fall in demand for chemical fertilisers due to large consumption of bio-fertilisers and ban of chemical fertilisers.

Solutions

1. Sell off some of its assets( not kept as collateral) inorder to pay off its debts.

2. Reduce the salary of the board members.

3. Introduce innovation.

4. Invest more on advertising and employee training.

Review

Due to the inefficiency of management and unfavourable government policy, the company is very much likely to stoop into an abysmal situation of very high loss. Company must deter itself from making useless investment and overpayment to its employees. along with that, if above given measures are taken, the company can avoid such a situation.