Risk Management

Five Warning Signs That a Business is Failing

Businesses are not like dinosaurs—they do not go extinct without warning. There are always clues in the company culture to indicate when a business is headed down a foreboding path. Morgen Witzel writes an article citing five signs that a comet could be headed for your business, so that you can prepare the appropriate astronomical response.

  1. Complacency
  2. Constant changes
  3. An obsession with ‘winning’
  4. Errant executives
  5. Prioritizing numbers over people

Watch the Skies

Complacency is a kiss of death to any business, especially with society’s new fixation with technology. Just look at Kodak, who was once a giant but fell into bankruptcy for not being proactive enough about the shift to digital photography. This is called the innovator’s dilemma, where a company creates a fantastic new product, but subsequently does not do enough to maintain that garnered momentum moving forward. Instead of sitting on your laurels, use brilliance to beget more brilliance.

One source of complacency lies hidden in the knowledge that you are “winning” over competitors. But the hard truth about “winning” is that it is short-term and trivial, and not all growth is good growth either. Aggressive efforts into short-term wins could send you off into space, where it becomes impossible to make the more important long-term wins.

On the flip side from complacency, uprooting to constantly stay on the cutting edge is not so practical either. If people are constantly relearning their own business to stay abreast of changes, then what time do they have left to do work of meaning? Employees should be left to work undistracted, which becomes difficult if errant executives are running the show:

Another surprisingly frequent warning sign that a business is in danger is when executives make more headlines in the bedroom than in the boardroom. A couple of years ago, the Financial Times ran an article about (male) executives having testosterone injections to boost their confidence and make them more, well, more masculine. Bad idea. The problem in business today is too much testosterone, not too little.

The executives in charge need to be not just beacons of productivity but of integrity at as well. Lastly, remember that “You can’t manage what you can’t measure” is very flawed logic, and putting more trust in static numbers than in having direct conversations with people is not healthy. Leaders should leverage metrics with soft skills to get the full picture.

You can read the original article here: http://www.lifehacker.com.au/2015/05/five-warning-signs-that-a-business-is-failing/

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