Faulty Analysis of Market Conditions and Flawed Company Policies

At times a team can fail due to uncertainties in market conditions and an inability to read the signs of change. It could be due to poor forecasting models, foresight, understanding of market forces or a weak analysis of the external environment. If the team is too internalized in its approach and does not have enough exposure to the external forces that impacts the business, then this can lead to underperformance on the job, poor market intelligence, miscalculations and strategic mistakes.

At times the team process or its operational efficiency falls victim to flawed company policies. The company can make certain decisions that effect its business growth or ruin its competitive edge and no matter how cohesive the internal teams are, the company will still run into problems because of strategic reasons. Let’s consider the case of a power plant where the company was quick to assign to blame to the team in charge but eventually discovered that it was actually a larger issue that was creating the problem.

Example 1

An expensive capital intensive power plant was built at one of the company’s many world-wide locations. It had problems from the start. During the building work it ran into time overruns due to construction delays and various other operational problems. Once the plant was up and running, the company discovered that the plant was uneconomical. The company set up a cross-functional task force to see if they could find ways to improve the operation. The team seemed to be meeting regularly but could not find any solutions. The corporate management began to wonder if the task force was itself ineffective and responsible for some of the problems. They brought in an outside consultant to review the situation and give suggestions. After several weeks spent investigating various angles, the consultant filed a report which had surprising results.

The report showed that the problem did not lie with the task force or any other employees. Capacity utilization was at its peak and every effort was being made to run the operation efficiently. The problem was with corporate policies. The consultant had studied competitor’s manufacturing facilities, and discovered that they had achieved economies of scale by building plants of a certain minimum capacity. Their strategy was to build a large number of plants to a standardised design which lowered costs, minimized delays and reduced operational glitches.

This company by contrast used a variable policy and built plants with different capacities and specifications depending on their assessment of what the region required. This particular plant was a smaller plant and a smaller plant meant poorer economies of scale.


Teams are only as good as the policy frameworks within which they operate. Flawed strategic decisions such as the above leaves a good team with very little to work with. At times the flaws and strategic blunders lead to short-sightedness regarding technological advancements.

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