Companies That Achieved Success and Those That Failed

Companies That Achieved Success and Those That Failed: Lessons for Entrepreneurs

Kurt GraverBusiness Development

This blog post will delve into the stories of several UK-based companies that have achieved remarkable success or experienced significant failure. Through these case studies, we will identify key factors contributing to their outcomes and extract lessons to help guide your entrepreneurial journey.

Whether you are just starting or looking to take your business to the next level, these insights can provide a roadmap for navigating the complex and ever-changing business landscape.

The Importance of Studying Success and Failure


Before diving into the case studies, it is essential to understand why studying success and failure is crucial for entrepreneurs. A study by the Harvard Business Review found that while success can provide valuable lessons, failure often offers even more powerful insights (Edmondson, 2011). By analysing the missteps and challenges faced by companies that have struggled or failed, entrepreneurs can learn how to avoid similar pitfalls and develop strategies for overcoming adversity.

Moreover, examining the journeys of successful companies can provide inspiration and guidance for entrepreneurs seeking to achieve sustained growth and profitability. A report by the ScaleUp Institute found that the UK is home to over 33,000 scale-up businesses, defined as companies that have achieved an average annual growth rate of 20% or more over three years (ScaleUp Institute, 2020). By studying the factors that have enabled these businesses to thrive, entrepreneurs can identify best practices and adapt them to their contexts.

Case Study 1: Deliveroo – Innovating in the Face of Adversity


Deliveroo, the London-based food delivery company, has become a household name in the UK and beyond. Founded in 2013 by Will Shu and Greg Orlowski, Deliveroo has revolutionised how people order and receive food from their favourite restaurants. Despite intense competition from rivals such as Just Eat and Uber Eats, Deliveroo has grown remarkably and established itself as a food delivery market leader.

One key factor behind Deliveroo’s success has been its focus on innovation. From the outset, the company has invested heavily in technology, developing a sophisticated platform that enables customers to easily browse menus, place orders, and track their deliveries in real-time. Deliveroo has also partnered with thousands of restaurants across the UK, providing them with the tools and support needed to offer delivery services and reach new customers.

Another critical aspect of Deliveroo’s strategy has been its emphasis on customer experience. The company has built a reputation for fast, reliable delivery and excellent customer service, which has helped to drive customer loyalty and repeat business. A study by the NPD Group found that Deliveroo had the highest customer satisfaction rating among food delivery companies in the UK (NPD Group, 2019).

However, Deliveroo’s journey has not been without challenges. The company has faced criticism over its treatment of delivery riders, many of whom are classified as self-employed contractors and do not receive benefits such as sick pay or holiday pay. Deliveroo has improved its riders’ working conditions and support in response to these concerns by providing free accident insurance and access to online training courses.

Despite these challenges, Deliveroo has continued to grow and innovate. In 2021, the company launched a new service called Deliveroo Hop, which offers rapid delivery of groceries and household essentials from a network of dark stores (Deliveroo, 2021). This move reflects Deliveroo’s ability to adapt to changing consumer needs and identify new growth opportunities.

Lessons from Deliveroo:

  1. Embrace innovation and invest in technology to stay ahead of the competition.
  2. Focus on delivering an exceptional customer experience to drive loyalty and repeat business.
  3. Be prepared to adapt to changing market conditions and consumer needs.
  4. Address challenges and criticism proactively and take steps to improve your business practices.

Case Study 2: Carillion – The Dangers of Overreach and Mismanagement


While Deliveroo represents a success story in the UK business landscape, the collapse of Carillion in 2018 serves as a cautionary tale for entrepreneurs. Carillion was a British multinational facilities management and construction services company that employed over 40,000 people globally. At its peak, the company had an annual revenue of over £5 billion and was involved in numerous high-profile projects, including constructing the HS2 high-speed railway line (The Guardian, 2018).

However, in January 2018, Carillion went into compulsory liquidation, leaving behind debts of over £1.5 billion and a pension deficit of £2.6 billion (The Guardian, 2018). The company’s collapse sent shockwaves through the UK business community and raised serious questions about corporate governance, risk management, and the role of government in outsourcing public services.

So, what went wrong at Carillion? A parliamentary inquiry into the company’s collapse identified several key factors, including (House of Commons, 2018):

  1. Aggressive accounting practices: Carillion used aggressive accounting practices, including the early recognition of revenue and the delayed recognition of costs, to mask the true state of its finances.
  2. Unsustainable business model: The company relied on a business model that involved bidding for large, complex contracts at low margins, which left little room for error or unforeseen circumstances.
  3. Overexpansion and excessive debt: Carillion pursued an aggressive growth strategy, taking on more and more debt to finance acquisitions and new projects. This left the company highly vulnerable to any downturn in its markets.
  4. Poor corporate governance: The company’s board of directors failed to challenge management or provide adequate oversight, allowing problems to go unchecked until it was too late.

The collapse of Carillion had far-reaching consequences, not just for its employees and shareholders but also for the many small businesses that relied on the company for work. A report by the Federation of Small Businesses found that the collapse of Carillion left many small businesses facing financial ruin, with some owed hundreds of thousands of pounds for work they had already completed (FSB, 2018).

Lessons from Carillion:

  1. Maintain transparency and accuracy in your financial reporting and avoid aggressive accounting practices.
  2. Be cautious about taking on excessive debt or overexpanding too quickly.
  3. Ensure your business model is sustainable and withstand market fluctuations or unforeseen circumstances.
  4. Prioritise good corporate governance and ensure that your board of directors provides adequate oversight and challenge to management.

Case Study 3: Brewdog – Building a Brand through Authenticity and Innovation


BrewDog, the Scottish craft beer company, has become a global phenomenon since its founding in 2007 by James Watt and Martin Dickie. The company has grown from a small startup to a multinational business with over 100 bars and restaurants worldwide and a thriving e-commerce platform. In 2020, Brewdog’s revenue exceeded £200 million, representing a compound annual growth rate of over 50% since 2009 (Brewdog, 2021).

So, what has been the secret to Brewdog’s success? One key factor has been the company’s focus on building a strong, authentic brand that resonates with its target audience. From the outset, Brewdog has positioned itself as a rebel and a disruptor in the beer industry, challenging traditional norms and championing independent craft brewing. The company’s marketing campaigns, which often feature provocative and attention-grabbing stunts, have helped to generate buzz and build a loyal following among beer enthusiasts.

Another critical aspect of Brewdog’s strategy has been its commitment to innovation. The company has consistently pushed the boundaries of what is possible in brewing, experimenting with new ingredients, techniques, and packaging formats. For example, in 2020, Brewdog launched a new range of carbon-negative beers brewed using surplus fresh bread and packaged in recycled materials (Brewdog, 2020). This focus on sustainability and environmental responsibility has helped to differentiate Brewdog from its competitors and appeal to consumers who are increasingly concerned about the impact of their purchasing decisions.

However, Brewdog’s rapid growth has not been without challenges. In 2021, a group of former employees published an open letter accusing the company of fostering a toxic workplace culture and prioritising growth over employee wellbeing (BBC News, 2021). In response, Brewdog’s founders issued a public apology and committed to making changes to address the concerns raised in the letter.

Lessons from Brewdog:

  1. Build a strong, authentic brand that resonates with your target audience.
  2. Embrace innovation and experimentation to stay ahead of the curve and differentiate yourself from competitors.
  3. Consider your business’s environmental and social impact and take steps to operate sustainably and responsibly.
  4. Prioritise employee wellbeing and take steps to foster a positive workplace culture, even as your business grows and scales.

Conclusion


Deliveroo, Carillion, and Brewdog’s case studies provide valuable lessons for entrepreneurs seeking to build successful and sustainable businesses in the UK. While each company has faced its own unique challenges and opportunities, common themes emerge from their stories.

First and foremost, innovation and adaptability are critical for success in today’s fast-paced and ever-changing business environment. Companies that can stay ahead of the curve and identify new growth opportunities will likely thrive in the long run. This requires a willingness to experiment, take risks, and challenge traditional ways of doing things.

Second, building a strong and authentic brand is essential for connecting with customers and standing out in a crowded marketplace. Companies that can create a clear and compelling brand identity and consistently deliver on their brand promise are more likely to generate loyalty and advocacy among their customers.

Third, financial discipline and good corporate governance are critical for long-term success. Companies that take on excessive debt, engage in aggressive accounting practices, or fail to provide adequate oversight and challenge to management are at risk of collapse, as the case of Carillion demonstrates.

Finally, prioritising employee wellbeing and fostering a positive workplace culture are essential for attracting and retaining top talent and ensuring the long-term sustainability of your business. Companies that neglect these factors risk damaging their reputation and losing the trust and loyalty of their employees, as the recent challenges faced by Brewdog illustrate.

As an entrepreneur in the UK, it is essential to learn from others’ successes and failures and apply these lessons to your business. By focusing on innovation, building a strong brand, maintaining financial discipline, and prioritising employee wellbeing, you can position your company for long-term success and positively impact the world.

Sources:

  • Edmondson, A. C. (2011). Strategies for learning from failure. Harvard Business Review, 89(4), 48-55.
  • ScaleUp Institute. (2020). The Scaleup Review 2020. https://www.scaleupinstitute.org.uk/scaleup-review-2020/
  • NPD Group. (2019). Britain’s food delivery market grows 18% year on year. https://www.npdgroup.co.uk/wps/portal/npd/uk/news/press-releases/britains-food-delivery-market-grows-18-year-on-year/
  • Deliveroo. (2021). Deliveroo launches a new rapid grocery delivery service, Deliveroo Hop. https://uk.deliveroo.news/news/deliveroo-launches-new-rapid-grocery-delivery-service-deliveroo-hop.html
  • The Guardian. (2018). Carillion collapse: the key figures. https://www.theguardian.com/business/2018/jan/15/carillion-collapse-the-key-figures
  • House of Commons. (2018). Carillion: Second Joint report from the Business, Energy and Industrial Strategy and Work and Pensions Committees of Session 2017–19. https://publications.parliament.uk/pa/cm201719/cmselect/cmworpen/769/769.pdf
  • FSB. (2018). Carillion collapse: What lessons can be learned? https://www.fsb.org.uk/resources-page/carillion-collapse-what-lessons-can-be-learned.html
  • Brewdog. (2021). BrewDog Plc Annual Report 2020. https://www.brewdog.com/uk/annual-report-2020
  • Brewdog. (2020). BrewDog launches new beer that fights climate change. https://www.brewdog.com/uk/brewdog-launches-new-beer-that-fights-climate-change
  • BBC News. (2021). BrewDog chief James Watt pledges changes after ‘toxic culture’ criticism. https://www.bbc.com/news/uk-scotland-scotland-business-57413677