There has been extensive research to identify factors that define winning or high-performing businesses. Other research has also identified factors that are shared by underperforming businesses. This article will provide insights to identify which factors to avoid while guiding your efforts toward emulating successful traits of a winning business.
Factors That Create Underperformance
This article is going to use what we believe to be the most important six factors that are associated with underperforming business organizations.
Insufficient Financial Resources to Capitalize on Opportunities. Not having the ability to invest in critical infrastructure and the training and development of key personnel. There is nothing wrong with tightly managing financial resources, but when decisions are made to forego opportunity because resources are lacking, the business is losing the opportunity to improve and will eventually lose ground to more innovative competitors.
Narrow-minded leadership that is unable or unwilling to take action. Frequently characterized by not taking a long-view of the business, putting off important changes that may jeopardize the future of the company, or “we’ve always done it this way” mentality.
Poor managerial decision-making. Botched decisions can have a huge impact on business. Think about how bad decisions can haunt you for years on a botched ERP implementation, a re-branding strategy that hurt the company, a decision to not serve a particular client or industry.
Leadership ignorance. This happens when managers don’t know, or when managers are unaware that they don’t know, or when managers think they know but they really don’t know. This means that their ignorance will keep them from obtaining the knowledge they need to correct this gap in understanding.
Lack of managerial courage. This is when a problem exists, the solution and needed actions are known, and financial resources exist, but the management team lacks the courage to implement; they are afraid to risk the investment.
The human connection is limited or missing. When managers don’t know their teammates or when customers are made to pay a premium to personally interact with organization personnel.
Actions You Can Take
Which of these factors are present in your organization? Which ones present the greatest threat to keeping your business from thriving? What specific actions can you take to eliminate these existing factors that will define your organization as a losing organization over time?
Use these worksheets to discover if your organization is a winner or underperforming.