The good leaders focus on solutions, not on blame.Businesses "fail" for a multitude of reasons including economic conditions, vendor management, performance or production, industry regulations, expansion costs and the list goes on. Look at the primary causes behind the fall of the business. So which failure are you talking about here? Is it a functional failure? Or a major capital project failure? Is it the strategic organizational level failure or governance mistakes? What are the parameters of failure to you? Is it poor financial planning and management or low quality of product and services or strained employee relationship, or ineffective marketing channels and communications, or disconnects in operational practices? What type of organization are you talking about?
First, the blaming culture should be erased from individual’s mindset. We should not blame any individual or any function. Strategy guides the business between success or failure. If the strategy is wrong, you can have the best people doing the wrong things very effectively and efficiently, and the business still fails. Before accusing or blaming anyone or any function, the organization should understand what went wrong through all available analytical tools. If a business is failing, the leadership team has to take the greatest responsibility. Businesses fail most of the times because of too much dependence on analysis and one's temptation to keep on following the approach from the past which may have become irrelevant. Leaders fail to use their intuitive abilities, who has time to blame if the business is failing down. Instead of finger pointing, you have to sit together to build a solid strategy planning. It is the only way through which you can overcome the challenges.
The top management and decision makers should take significant responsibility for the success and failure of the business. First, let’s address the question why should a business fail. The top leadership of a business is meant to convert the uncertainties of a marketplace to an actionable strategy to be done by the company and its people. When a company fails, the top management is responsible because their planning, the way to reach to the vision, attitude, competitor's activities, training & product or services knowledge to the field force & communication gap are not on the right track. Hence, whosoever is part of the leadership is accountable including HR. Sometimes this can mean leadership that is unwilling to change. Or leadership that wants to preserve its own heritage, and is less concerned with organizational longevity. Hence, it is not function specific but the integrated whole that has failed. To blame an individual department, who is merely a cog in the wheel, is ignorant. Blame is a destructive method and can further depress a company that is failing, rather at such times, we should concentrate on building flagging morale and team based decisions to arrive at revival measures.
If a business is failing, many would think a considerable amount of the blame resides with HR. HR is the backbone of any organization and the major, supporting, it has a huge impact on the organization, but still there are other factors to be considered when we are talking about business failure. To run virtually any business, you need investment and people. HR should control the hiring process as well as training and development. They should know the business and individual employees. They should be observant and aware of the organization's strength and weaknesses. They should learn how to influence leadership, determining how best to guide them in seeing what they should, not just what they want to see. If change is necessary, HR needs to be creative in determining how to bring it about. If an organization has truly implemented the HR business partnering model, where HR is not only an administrative support function but a strategically intertwined function of business, then you can attribute part of the organizational failure to Human Capital Management.
If and when a company fails, it is everyone's responsibility. A business fails because its products or services are not attractive to clients of the delivery of these services and products are faulty. Follow the thumb rule that the decision maker must take ownership of the consequences of the decision. Usually, the key business decisions are taken by the CXOs and hence for any fallen business; the CXOs cannot absolve himself/herself of the blame, but in part. Because the CXOs take a decision based on critical input and advice from the incumbents of the executive management team and from the members of the board. And even a brilliant decision can come to a cropper if the execution is poor.
Where there are failures the takeaway should be WHAT (not who) went wrong. The departmental leadership is solely responsible for building a solid, knowledgeable, supported and open team environment whose goal is to meet that department’s requirements. Those department leaders are then led by the senior executive staff who are responsible for building their own strong team of reliable, knowledgeable and accountable leaders, while providing them with an open forum for feedback not only from the top down but also from the bottom up. A company’s survival; their continued success, is reliant on the lower staff's performance and success. The last piece is the company president/owner who also need to be responsible for their own executive staff and allow a proper flow of information on a regular basis. Where there are failures the takeaway should be what (not who) went wrong, find the point of the break of the process and what steps are being taken to prevent that particular failure.
The good leaders focus on solutions, not on blame. So as far as who is to blame, per se, anyone who contributes to the decline of an organization can own some fault it in its demise. And it seems to be there is one factor that is directly proportionate to any organization's success or decline, and that is whether or not that specific entity is a learning organization. Adaptability and learning are a must: even when it means making some mistakes and have to correct them. Just to wrap it up, transparency in all what we do and good control systems will be great to minimize failure in any type of organization.