The 4 biggest business mistakes you're making (and how to fix them)

Find out why your company is failing to thrive.

by Adam Gale
Last Updated: 28 Feb 2017

Something’s wrong with your business. Apple, ARM, Google, Shell: you look at these shining lights and think, that’s us. Yet somehow the results never look the same...

The worst thing is you can’t put your finger on why they do so much better than you do.  Great people? Check. A sound strategy? Check. An open and engaging workplace culture? Check. Maybe, you scratch your head as you look over your latest numbers, you’re just unlucky.

Maybe not. ‘That’s where I spend a lot of my time, with people who don’t know they’re drinking the Kool Aid,’ says Steve Goldstein, consultant and former chief executive of American Express Bank. ‘The first thing you have to do is acknowledge you have a problem.’

So what's your problem? Here are some common dysfunctions that afflict businesses of all shapes and sizes – and some techniques for dealing with them.

1. You’re complacent

Complacency and it’s more aggressive cousin, overconfidence, are often behind the decline or fall of once great businesses. Look at Tesco or RBS in the early years of this century – in each case, a story of over-expansion and neglecting the basics that built the business in the first place. The result? Tesco in retreat and RBS still in government hands, nearly a decade on.

‘When the business is going well, you start to believe it’s because you’re really good and you lose that edge. You’re not looking at your competitors, seeing what’s new or different, and you start to stagnate,’ explains Goldstein.

The solution is getting ‘fresh eyes’ to view the situation. That doesn’t need to be an expensive consultant by the way. Fresh blood at the top can have the same effect.

If you’re not bringing someone else in, you’ll need to ask yourself some hard questions. ‘Are your customers still with you because they really like the product or service you offer, or is it just inertia?’ Asks Goldstein. Be honest – if it’s the latter, then those customers can disappear surprisingly quickly.

2. You’re too slow

Goldstein tells the story of a leadership team at a big company coming up with what they all agreed was a great new business idea, only to decide to put it into the plan for the next year and work on it then.

‘This was May. I must have made an expression the CEO didn’t like. He said what’s wrong with that? I said there are probably four companies around the world who have come up with the same idea, and one of them will do it this year. He said like who? I said I don’t know who they are, but we’re not the only smart people.’

The CEO responded that there wasn’t enough money, at which time Goldstein suggested defunding another project that they all thought was worse. ‘We have mechanisms of how we do things, and people don’t paint outside the lines. Someone said I was brilliant. I know I’m not brilliant. The fact they said that to me was shocking – it shows the degree to which embedded processes and bureaucracy just choke innovation and growth.’

If you want to cut the red tape, try turning rules into principles, which allow more flexibility. Just accepting rules because they’ve always been there is stupid. Of course that doesn’t mean getting rid of every rule – governance for instance, isn’t just something that can be bazooka-d in the name of efficiency. 

Instead, think critically about all of your rules, and use your judgement to decide which are carved in stone, and which are up for interpretation.


Why Metro Bank’s Vernon Hill won’t allow any new rules without destroying two old ones 


3. You’re too remote

Can you hear me all the way up there? Goldstein says leaders can often lose their way because they lose touch with the two most important constituencies a business has: its employees and its customers.

‘In most businesses the person who’s dealing with the customer is generally at the bottom of the org chart – in a retailer like The GAP there are 20 discreet layers of management between the CEO and the sales clerk in a shop. It’s generally a part-time employee making maybe $9 (£7.20) an hour, who doesn’t particularly like their job, and yet this is the person who has 100% of the interface with your customer.’

The key is to make sure that you as a leader keep talking to the customer and employees at all levels, but particularly the front line people. ‘Customer service reps, sales people, factory workers, they know what’s working and what’s not, and probably what the company should be doing. The problem is no one is listening to them. It’s gold to be mined,’ advises Goldstein.

4. You’re always in meetings.

Okay, you’re thinking. This is all very well. But getting close to customers, challenging every system you have and looking long and hard in the mirror about what your company all take time. And as every CEO knows, there’s never any time.

Why? When Goldstein speaks to them, the answer’s always the same.

‘Because we’re always in these damn meetings. It’s an unfulfilling waste of time. The interesting thing is everyone accepts them as a given. In other parts of the business, if someone identifies a problem, good leaders attack the problem, whether it’s a sales, or a cost or a manufacturing problem. They either fix it or create an entirely new system to replace it.’

The same cannot be said of meetings. They take hours when they could take minutes, anyone can book them and they seemingly take priority over what could well be more important work. The solution is to view it as a business process and regulate it as such.

If the purpose of the meeting is to exchange information, then why would you spend an afternoon listening to your senior management team read aloud, when you could all look over the necessary materials beforehand, ask any questions you have, make a decision then get out of there in 15 minutes?

Of course sometimes meetings have more to do with relationship building, but recognising what it’s for and considering whether it’s a good use of time is surely smart.

Whatever changes you attempt to make to your business, remember that nothing happens overnight – or without the full support, or rather conviction, of the chief executive. You won’t establish a dynamic and innovative culture by sending everyone a memo telling them that your values now include innovation and dynamism.

You have to put in the hours. But if you do, the rewards are there.

Steve Goldstein is the author of Why Are There Snowblowers in Miami? Transform your business using the five principles of engagement (Greenleaf). 

Tags:

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today