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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

INVITATION - Sir Richard Branson at BizClimate 2010 in New York on 21 September 2010

Mitchell Phoenix are staunch supporters of sustainability and the leaders who take responsibility.

Next Tuesday in mid-town Manhattan, many of the world’s leading thinkers will be participating in both the Clinton Global Initiative and BusinessClimate 2010. This invitation offers you an opportunity to participate in one of these important events – the one that does not cost $20,000 to participate.

The theme is finding Moore’s Law for Sustainability – or how Expectation drives Investment yielding Innovation.

Confirmed list of speakers includes:

Sir Richard Branson, Chairman of the Virgin Group
Costa Rican President Jose Maria Figueres
Dan Kammen, Professor of Energy at the University of California, Berkeley
Craig Cogut, Co-founder, Pegasus Capital
Matt Arnold, Principal, PricewaterhouseCoopers
Mindy Lubber, CEO of Ceres
Lounette M. Dyer, CEO of Soledeo Energy
Jigar Shah, CEO, the Carbon War Room
Hannah Choi Granade, President, Advantix Systems
Andrew McKeon, Founder and Principal, carbonRational
Claire Tomkins, Director of Research, the Carbon War Room
Sunil Paul, founder of Spring Ventures and leading architect of the Gigaton Throwdown
Marc Gunther, Conference Chair of Brainstorm: Green
Vladas Lasas, CEO/Founder Skubios siuntos UAB Kaunas & UPS/Lithuania
Strive T. Masiyiwa founding executive chairman of Econet Wireless
Andrew Winston, a globally recognized expert on the greening of business
Fabien Cousteau, Founder, Plant-a-Fish
Paul Dickinson, CEO, Carbon Disclosure Project
Rich Lechner VP of Energy & Environment at IBM
Clay Nesler, Vice President, Global Energy and Sustainability, Johnson Controls, Inc.

BusinessClimate 2010 takes place at The BlackRock Building, 51 West 52nd Street next Tuesday September 21st . Registration is 8:30am, proceedings from 9am – 5:15pm, cocktail reception to follow. The fee for this all day event - including lunch and cocktail reception - is $495.

As a friend of Mitchell Phoenix you are offered a discount on your ticket. Use code: bcdiscount and receive $100 off – your final cost for the full day event - $395. Only a few seats remain available.

So, if you can’t make it to the Clinton Global Initiative - and even if you can - please join us at BusinessClimate 2010 - a summit of leaders whose ideas and actions on sustainability and innovation are transforming the global economy and our planet.

Password protected registration site:
http://businessclimate-2010.eventbrite.com/
Pswd: carbonrational1
Discount: bcdiscount

For more information visit: http://www.businessclimate2010.com/

Looks like Mayor Bloomberg and Governor Schwarzenegger will be turning up for a press conference along with Sir Richard Branson later in the day.

Latest results from Mitchell Phoenix management training

Here is a sample of the latest results from their Foundations of Management programme today.

A cornerstone of Mitchell Phoenix's approach is that participants on their programmes are required to create concrete business results by applying what they have learned in the seminar room back in the workplace.

For this reason Mitchell Phoenix programmes are structured a day a month for five or six months. In between the days delegates apply the material in the workplace and create results to be reported at the following seminar.

A sample of the results from the latest Foundations of Management programme:

Making a business more profitable

A chef at a restaurant was tasked with improving sales over the Christmas period. He noticed that team meetings were usually held between three and six pm on a Friday, when the team were distracted by the thought of the busy evening ahead. So one Friday he asked his team to go away and think of ideas on how they could increase sales, and to bring those ideas to a special meeting which would be held on the following Wednesday afternoon.

Suggestions included:

Selling mulled wine and mince pies at the bar
Improving the children’s menu – giving them colouring books, pencils, balloons and better drinks
Making a Christmas party menu – which they had never done before
By the time the chef reported his results to the Foundations group, the Christmas party menu was proving popular, and they were selling approximately 50 mince pies a day from behind the bar. When he was asked why this particular idea had been so successful, the chef replied that it was the member of staff who works behind the bar who proposed the idea. Because it is his idea, he is working hard to make it a success. The chef commented that his staff are more engaged, and the restaurant is more profitable.

Retaining a valued employee

A sales team manager ran an appraisal with a salesperson who had become so demotivated they were ready to leave the organisation. The manager used the tools acquired on the Foundations programme to explore the reasons why the salesperson had become so demotivated, and used the salesperson’s own ideas to define what action they would take. Based on what the salesperson said, the sales manager created a series of concrete actions to be achieved in the months following the appraisal. This process has restored the salesperson’s confidence and passion for the job, which in turn have led to more consistent performance on a day-to-day basis.

Developing your people resource

A manager in a charity had to construct a proposal for an external body to fund a three-year project. Usually the manager would write this funding proposal alone, shutting herself in her office for a considerable length of time. Using the material from the Foundations programme, she decided to consult her project team manager, asking the team manager a number of carefully considered questions about how the proposal should be constructed.

The project team manager, seeing the way in which her manager was working with her, called her team together and asked them the same questions she had been asked. Then the two managers and the project team met and shaped the proposal together.

The feedback the manager received from the project team manager and the project team was that they had enjoyed the process and were looking forward to the changes in their way of working that the suggestions in the proposal implied. They were more motivated and confident than they had been before. This was unusual because it is more natural for teams to resist change than support it. The manager had made the chore of writing a proposal into a motivating exercise on selling change.

Creating resilience

A manager in a bank runs a team whose busiest period is in December. Last December was no exception, and the manager noticed the team were struggling to meet their timescales, the staff had concerns about some of the tasks they had been set, and they needed a boost. The manager decided to speak to each individual in the team every two days, find something to praise them about and praise them. As a result of this, the people in the team felt they were valued and coped with the pressure of the December rush.

Final Evaluations of the Programme

This course has made me analyse every aspect of my management style and made me aware of how important my influence is. Being spread over 5 months it has enabled me to really absorb and practise many tools that I know I will continue to use to enhance my practice. I feel it has given me confidence to go forward and be successful. - A manager at a national charity. Final evaluation = excellent

This course is presented in a fun and interesting way and the huge amount of information has been presented in a way which has meant that you don’t realize the volume until the end. - A manager at a bank. Final evaluation = excellent

It definitely makes you a better manager. It takes you out of your prejudices and is good input on how to create a good and happy company. - A chef at a restaurant. Final evaluation = excellent

It does change the person. It is very useful. It gives me the tools so I can do my job better. It is very dynamic and it is over five months so results have to be delivered. - A manager at a bank. Final evaluation = excellent

The last five seminars have taught me how to become a structured, effective and professional manager. Mitchell Phoenix, and especially Sean, are an asset to any company that wants the best from their managers and directors. - A manager in a technology company. Final evaluation = excellent

Quite apart from the fact that I learnt a lot about the role of managers in business and was able to practise all the theory learnt in a real working environment, I feel that my confidence with presentations and my ability to achieve and the feeling that I am capable has improved remarkably. - An executive at a specialist ship operator. Final evaluation = excellent

The next Foundations of Management programme starts on February 2nd in London.