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The 10 Most Common Pitfalls in Running a Business

If you are searching for factors that separate successful businesses from the herd, sooner or later you will seek out a meeting with a business transformation specialist. Business transformation specialists make their career in exactly that: they arrive at companies which are performing sub-optimally, and guide those businesses to greater profit and achievement. For organizations which are experiencing difficulties, transformation specialists are ambulance, fire service, analyst, strategist, psychologist and motivator, all rolled into one.

When Ross Stuart arrives at an assignment, what does he usually find? “Almost all of the problems I find in one business I will have seen before on other assignments,” says Ross, “in fact the pitfalls management fall into are the same both within and across industry sectors.”

Here are the ten management pitfalls Ross encounters most often:

The Ten Most Common Pitfalls in Running a Business

1. Ineffectual, poorly trained senior management
2. Lack of leadership and robust governance: no clear direction and support from the top
3. Senior management in denial
4. Poor quality
5. Narrow customer base
6. Poor financial systems
7. Poor communication with the employees
8. Poor stock control
9. Little or no marketing expertise, a depleted and demotivated sales force
10. High overheads

Ross encounters these pitfalls so often that he has written an ebook detailing how he detects and deals with these issues, and what you can do to deal with them in your business. For a free copy of the ebook visit www.mitchellphoenix.com/resources.htm

There is no Planet B - We need some Action Heroes

In September last year James Donnelly, President of Mitchell Phoenix USA, attended BizClimate 2010. In an article which first appeared in Mitchell Phoenix's Autumn Newsletter, he summarizes his thoughts on the event, and what will be required of managers in the future.

Leading is no longer enough.

I attended BizClimate 2010 last week, part of a series of conferences taking place at New York Climate Week headlined by the Bill Clinton Initiative (only $30,000 a ticket). Climate Week revolved around the opportunities for business in investment, cost saving and the creation of climate wealth.

BizClimate 2010 used Moore’s Law of Sustainability as a vision for the way in which business would drive the carbon economy in the future. Gordon Moore was a founder of Intel and changed the face of the technology world when he predicted that the density of semi-conductors on a chip would double every year.

By setting this expectation, it drove investment leading to innovation. In the same way the conference set out to explore the potential in exponential growth of green energy management and solutions.

The core themes explored by expert panels were Innovation, Investment, Expectation and Leadership. What was reinforced over the course of the event was a consensus that action was needed, that governments were loath to take the lead and that any advancement towards a ‘better world’ lay in the hands of business leaders.

We are at the start of a pioneering age with potentially greater significance than the industrial revolution. There are fortunes to be made. So what’s holding it up?

There is no measurement. No price on carbon, no visibility on regulation, no obvious clean energy horse to bet on. Perceived risk is the barrier. Everyone is waiting for someone to break from the pack. We don’t want the dot.energy race to become another dot.com farrago.

It takes courage to decide on a new course of action. It takes strength to stand your ground and deliver change. It requires inner conviction and determination to succeed against the status quo. The world needs leaders who believe in a cause, who can communicate a vision and inspire others to great heights. We need action heroes.

What is the difference between an action hero and a leader? I think, today, ‘manager’ is the new leader and leader has now become ‘action hero’. It is no longer enough to lead.

Generating new action is the route to change, learning and growth. The term ‘leader’ has lost connection with urgency, decisiveness and a link with future security and prosperity. When you see an action hero you are reminded of what is important. They are a walking billboard for direction and purpose, immediately inspiring a sense of confidence, energizing those around them.

Inertia is the enemy, generated by habit, fear and greed. Time for Sir Isaac Newton’s Laws of Motion! Action orientation is a commitment to change and a commitment to the future that generates results, produces measurement and reinforces progress that is being made.

Sustainability, climate wealth, green energy, carbon markets will figure large in all our futures. Leaders are not doing enough. There is no Planet B. Where are the action heroes?

Who should Sponsor a Leadership Development Initiative?

Mitchell Phoenix' Managing Director Kevin Yates recently published the ebook, How to Build a Successful Leadership Development Project, in which he outlines the central factors required if a leadership program is to yield real return on investment. In this extract, he explores who the sponsor of the project should be...

It is quite likely that an incoming senior executive has identified the opportunity for an improvement in the leadership skills of the management group. This may be a promoted MD, CEO or someone brought in with recent experience of greater leadership capability in another organisation (competitor perhaps?) This sponsorship is the best possible start point for gathering support from the board and will be a natural step to engage the wider management population.

Three levels of management need to be converted for the culture change to take effect. This means CEO, board and senior operational management. In a large organisation you will also need to engage the best of the next tier down to make it complete and secure. After that, leadership by example and sweeping demand for better practice will permeate the business. In the longer term, standards of behaviour have to be rigorously applied and defended. (This latter effect will be determined by the quality of leadership thinking delivered by the development project itself).

What happens when only HR or a more junior group have identified the need? Clearly we have to build more support into the senior operational areas and the CEO has to be sold on this need. By highlighting concrete examples of sub-optimal behaviour; raising questions about succession, ownership of goals, poor meeting management, and crisis culture we can lay the groundwork for a decision to be made. In addition, issues of falling standards of recruitment and greater attrition can be flagged. Lack of choice and quality in promotions and honest performance review will further bring the messages home. Leadership profiling tools can be brought to bear to display, empirically, the opportunities for personal growth.

There has to be acceptance of this need at the highest levels. Ready & Conger, in their analysis of why leadership development projects fail, identify lack of ownership as the principle ‘pathology’. Their solution, ‘everyone should own it’, is long on good advice but short on how to achieve it. In this article, I discuss the 5 steps necessary to build a successful leadership development project. Click here to read.

What are the symptoms of poor leadership?

Mitchell Phoenix' Managing Director Kevin Yates recently published the ebook, How to Build a Successful Leadership Development Project in which he outlines the central factors required if a leadership program is to yield real return on investment. In this extract, he explores the initial situation - the reasons why companies might decide to strengthen the leadership capabilities of their staff.

Recognizing the Overall Need
Firstly, what is the problem? Presumably your organisation has a sense of what it needs to achieve in broad terms and in detail - strategy, business plan, distributed goals etc. There will be people in place (mostly) and the wherewithal to achieve the goals. All of these lend themselves to analysis and verification: what is the current capability to enact the organisation’s strategy?
If there is a perceived lack of leadership in your organisation, this implies two things:

1. An observer (or observers) has compared the current standard of leadership in the business with a higher standard known to exist elsewhere (at a previous company, at a higher level of management, etc) and found it wanting
2. This observer understands the drag on business performance that poor leadership exerts, and the potential boost to business performance that higher quality leadership will provide

Needless to say, where there is no perceived gap between current standards of leadership and a higher standard, the link between leadership and business performance will not be understood, and there will be no investment in leadership development.
If we are going to measure improvements in leadership then what is it that we are to measure? We are all likely to have a definition of leadership, and who is to say if my definition is better than yours? Let’s sweep this debate aside for now, it requires time not available in this paper and is not entirely necessary. What counts is your recognition of potential. At this stage, it is enough if you and/or your organisation have recognised a leadership gap to exploit and the potential to exploit it. Here are some clues as to the extent of that potential:
* Ownership of initiatives and/or goals is patchy
* Blame culture when things go wrong
* Complaints of phoney reward systems
* Pockets of ‘resistance to change’
* Upward delegation prevalent
* No trust between people and divisions
* Gaining commitment is like herding cats
* ‘Yes but’ begins every sentence
* …and finally the simplest of all – you prefer not to battle against it!
These are the symptoms of poor leadership. There is a neutral position where leadership is adequate and displays few of the negative factors and some positive attributes. Most organisations occupy this position.

click here to download the full ebook