With modern airlines, the chances of surviving a flight every single day for 25 years are over 99.9% - but it wasn't always that way.
In comparison, business success rates are stuck in a bygone era.
Imagine! What if decision makers in business adopted the improvement techniques developed by the aviation industry?
Despite sharing vast improvements in technology, the chances of a new business surviving five years are stuck at about 20% - and this is not even considered newsworthy.
Between 8% and 24% of our water is lost through leakage in the distribution network, yet few complain unless there is a hosepipe ban. When Gross Domestic Product drops a few points at the end of an economic cycle before resuming its long-term upward trend, it becomes a national obsession. Yet, the impact on Gross Domestic Product of the 100,000+ business failures that occur every year in the UK is rarely mentioned. The cost could be just as significant as a recession but like the water leakage, it's not news, and is therefore ignored.
The UK may have become accustomed to haemorrhaging 100,000+ businesses every year but has anyone asked the question why this is happening? Are over 100,000 new ways of going out of business being discovered every year? If not, why are those responsible not learning from the mistakes of their predecessors? Could it be that most of these mistakes are avoidable?
By a not-so-curious coincidence, elimination of avoidable mistakes has underpinned the transformation of the aviation industry. One of the key factors behind its success has been the widespread use of simulations, where pilots gain skills, experience and confidence. Why not extend the same opportunity to decision-makers in business?
When a business closes down, there is often an assumption that it failed to manage its cash flow. This is about as helpful as blaming all air crashes on pilot error. Invariably, the underlying cause was a failure to identify, acquire and apply the right solution.
With simulations, judgement and decision-making skills can be practiced and tested in complete safety. Primary and secondary consequences are revealed in minutes instead of taking months or years. Learning from experience works, particularly when it takes a fraction of the time!
We are building a new on-line community of business simulation users. It includes facilitators, coaches, mentors, advisers and specialists as well as people looking for creative and innovative ways to improve business success.
New Dimension Enterprises Ltd.