$5 Billion to Bankruptcy – Tails from the Fails

Nov 7, 2024 | People First Method, Tails from the fails

by Jon Cline

Introduction to Project Failures

Hi. I’m Jon Cline, and I’m bringing you a tales from the fails presentation today where we’re gonna learn from a prior project that failed for nontechnical reasons as most people don’t realize that research over decades shows that ninety five percent or more of projects fail for non technical reasons. So if you’re thinking about growing your Salesforce career, entering into a Salesforce career, or making a career change, this information is very important to you because your intangible skills are going to be the key of making your future career and the projects that you impact successful. So what we see here is a Fox Meyer drugs case study. And this highlights highlights several elements. I just want to bring out. There’s lots of great information here.

 

Key Insights from the Case Study
But in particular, I want to highlight five things that are true in this that really support this case. And we’re going to have more of these so we can learn from these prior failures to bring it into your future successes. So the first thing to note is the outcome of this. This was a five billion dollar company.

Background of FoxMeyer Drugs

They were the fourth largest distributor of drugs in the US. A lot of things going well for them. They had grown, they had great prospects in the future, and they wanted to implement a new ERP and warehouse automation program to really take advantage of all of it. That’s where the challenges began.

 

Organizational Challenges Identified

And what I want to focus on here is the article focuses on mostly organizational dimension. So for example, here on page one, we can recognize that there were at least fifty consultants on this project, which is a massive undertaking. One thing that’s noteworthy is those consultants were largely inexperienced and turnover was very high. From my perspective, that relates to an aspect of culture, values.

 

Cultural and Management Issues
There’s some significant intangibles that kept people from being successful in the project and having longevity. We’re all inexperienced in some ways, but we can grow and learn if we foster the right environment and we focus on being learn it alls top to bottom from management all the way down to frontline consultants and staff. So that’s the first issue. On page two, we’ll look at the fact that there were very loose management controls.


Importance of Scope Management
And so, in particular, they highlighted that management did not control the scope of the project. So, this is very important. Doesn’t mean that there’s not a great backlog and not some great opportunity to deliver. But how you do that?

How you negotiate that with people? How you backlog items, parking lot them, deliver them partially as you move along in a project and keep the finish line clear is very, very important, and it’s largely an intangible element of expertise. It’s not something you’re gonna get from a Salesforce certifications.
 
Change Management Failures

Another element you’ll see here is that management, did not have adequate change management. So thinking about how do we turn these features and great technical discoveries that we’re making and the features that we’re implementing, how do we actually roll that out to the internal team? And in this case, we’re talking about internal office teams, warehouse teams, people who work, with gloves. There might be other form factors that they need.

 

Involvement of front-line Staff
They didn’t have adequate change management to actually roll that out. And in this case, one of the significant downsides is that when they rolled out the software, they had very high turnover in the warehouse and they lost a significant number of staff because they didn’t roll it out. And in particular, I’m gonna look at now on the third page that, quote, they should have put some of them, meaning the front line staff on the implementation team. That’s a key factor.

Consequences of Exclusion
There should have been a leader on the project to bring in and a stakeholder from the actual team that’s going to be using the software to give them ownership upfront, to give them feedback and the ability to provide insight into what’s really gonna work for their team. They weren’t included in the project, and it cost them significantly. Ultimately, as we’ve discussed, the company went into bankruptcy and was liquidated after this from being at a five billion dollar high. Hike.

Lessons Learned from the Failure

This is just five of the examples that are in this. There’s numerous other things, and you can find the link to this report in the description below. The key here in this Tales from the Fails episode is we want to learn what caused this project to fail, and we’ve seen here numerous intangibles. It wasn’t the software.

 

Conclusion and Future Insights

It wasn’t the technical capability of the particular consultants that caused this to be doomed. It was the intangibles. And that’s what I’m looking to help people with with People First Method. Happy to share more, but we’ll have more of these tales from the fails.

Call to Action and Engagement
Appreciate your time, and we’ll see you again. Please follow us on social. We’re on Instagram, Facebook, LinkedIn, as well as X. Just look up People First Method and connect with us.

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