6 Main Reasons Businesses Fail and How to Avoid Each

1. Having a vision, but not a strategic plan.

All my clients want to be successful. They even have a fairly descriptive vision of what that would look like. Yet only a few have developed the necessary strategy and action plan to get there. To be successful, businesses must know what makes success possible. Interestingly enough, this begins by learning what makes their competitors succeed and fail.

Finally, businesses must know what their competitive advantages are, and, if they have none, they must be able to either develop them quickly or get out of the business. Not having a strategic plan is a major source of stress, conflict, mistakes, multidirectional blame and failure.

2. Hiring the wrong people.

Hiring out of necessity is the costliest mistake in business, period. When organizations feel the impact of work overload resulting from a vacancy or sudden business growth, stress is inflicted on every collaborator, relationships start to suffer and performance starts to decline. This is where executives and managers slip up by hiring the first acceptable applicant rather than the best possible one. If you do not have the time to search for the best possible candidate, then hire for limited-time contracts until you find a top performer.

3. Letting politics supersede business.

Friendship at the workplace is a double-edged sword. We all want to feel comfortable with the people we work with, and if we are able to strike a friendship with some of them, life indeed becomes all the better. But letting friendship cloud our professional judgement is unfair to the organization and becomes the source of future endemic problems. Similarly, when getting on your boss’s good side requires you to abandon good leadership and management practices, the initial feeling of comfort will sooner or later be replaced by the inevitably stressful aftermath of unsound organizational decisions.

4. Not trusting your team.

Widespread mistrust at the workplace is a systemic weakness arising from the combination of the three aforementioned problems, namely, not having a plan, hiring the wrong people and politics superseding sound business practices. Therefore, if, as a team leader, you feel you cannot trust your people in general, it means either you have control issues or your organization has been down the wrong path for a long time already

5. Mishandling disagreement.

Genuine disagreement based on intrinsically different approaches to solve the same problem or achieve the same goal, or even about what the problem actually is or what the best goal may be, is the foundation of learning and progress. However, apparent disagreement about important issues, arising solely from people trying to excuse their mediocrity or hide their silent political liaisons, is the foundation of organizational failure.

6. Letting guilt get In the way of business decisions.

When an organization has been subjected to the lacerating consequences of the previous five afflictions, top leadership is, by definition, a fundamental part of the problem. In these circumstances, making the necessary, tough decisions for the first time in months, years or decades does often trigger feelings of guilt.

By: Luis E. Romero

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The 6 Main Reasons Businesses Fail and How to Avoid Each