Making mistakes is just a part of business ownership. A few, or even several mistakes, doesn’t necessarily spell the end of an organization. What does have the potential to make or break an organization, however, is the ability to recognize and rectify those mistakes.
The Resultants are accountability partners to our clients. It’s our job to uncover mistakes and bring them to the attention of leaders and executives. From our 20+ years of experience, here are the five most common mistakes we see businesses making across industries – and how to avoid them.
1. Poor Talent Positioning
At The Resultants, we’re always talking about the importance of having the right people in the right roles. The “right people” refers to talent who fits in with the company culture, while “right roles'' means placing that person in a role that capitalizes on and amplifies their talents.
One of the main problems organizations face is usually some form of poor talent positioning, which can go either way: Companies will either have the right person in the wrong role (a turtle-on-a-post situation), or the wrong person in the right role (someone who is technically proficient and gets results, but doesn’t fit with the company culture).
When you don’t have the right people in the right roles, the entire organization suffers. Either your through-put will suffer due to poor job performance, or your team’s health/culture will suffer damage because of a mismatch in values.
How To Avoid This:
Team health begins with having the right strategic structure in place so that the “right roles” exist. So, if you need to reassess the structure of your organization to create these roles, then do so. Then, when hiring new talent, emphasize your core values. Ask yourself if the talent fits well with those values so they will easily fit within the existing company culture. Once we have the right people in the right roles, success becomes much easier to achieve.
2. Undefined Core Values
Of course, you can’t match your talent with your core values if you don’t have any.
I once stood in the lobby of a potential client and noticed a large plaque on the wall. On it was a list of some impressive company values. I complimented the receptionist on them, but she rolled her eyes: “The owner saw those values at the business two blocks down in their lobby,” she said. “He asked me to take a picture of them and put them up in ours.”
Having no core values – or having them just for show – demonstrates that your company culture is not a priority. In the above situation, not only were these values not derived from the company’s leadership team (rendering them pointless), but the act of stealing them from another company had clearly cost them the respect of their employees.
Needless to say, that company wasn’t a good fit for The Resultants.
How To Avoid This:
Gather your leadership team and sit down for a brainstorming session: What is your company’s greater purpose to the community? What do you strive to help your customers with, beyond providing a product or service? How do you intend to create a healthy work environment for your team, and what would that look like? Answering these questions will help your leadership team come up with fundamental values and the definitions of each as they apply to your company. Make sure to communicate those values to your entire staff and weave them into your operations moving forward.
3. Lack of Coachability
Owners, leaders, and entrepreneurs are usually independent people – sometimes, to a fault. Because of this, many are under the impression they can do everything themselves and don’t need outside help.
For example, you’re an entrepreneur who’s operational-focused: You invented the widget and you know how to build the widget. You may not know how to mass distribute or sell it, and you’re not doing a good job of keeping track of inventory or accounts receivable, but boy can you build that widget!
These blindspots can cripple your organization if left unaddressed. Being “coachable” is about the willingness to fill those blindspots by relying on professional resources. Without the willingness to learn from others, even the most well-intentioned owners can drive their businesses into the ground.
How To Avoid This:
Cultivate and maintain a professional resource, whether it’s an accountability partner like The Resultants, or an advisory board of professionals. Learn to be coachable, to ask for help, and to ask questions. As a business owner, you should always be learning, and your ability to learn from people who’ve come before you can expedite your own success.
4. Staring at the Rearview Mirror
Another common mistake we see businesses make is in the area of metrics, regarding what we define as “Windshield” vs. “Rearview Mirror,” or leading indicators vs. trailing indicators.
When businesses work too hard with trailing indicators, they focus all their attention on their income statement, balance sheet, financial picture, and the like, but these will only tell you what’s already happened. While this information is useful, becoming too preoccupied with it is like staring out of the rearview mirror while driving. It has the potential to derail, or worse, bring the organization to a crashing halt.
How To Avoid This:
Focus on the Windshield – i.e., your leading indicators – to gain insight into what will happen in the near future of your company. This includes your sales pipeline, marketing initiatives that are producing results, and other elements that feed into your company’s sales engine. The key is to find a healthy balance between both the leading and trailing indicators to keep your organization moving forward.
5. Under-Capitalized For Growth
Everyone knows it costs money to run an organization, but a common mistake is being undercapitalized going into new periods of expansion. If you don’t have built-in capital reserves or an adequate line of credit, then you’re going to be handcuffed in your growth.
However, don’t lose sleep trying to capture that last 5-10%. Trying to pick up pennies and getting bogged down in details will take too much time and effort for the reward, grinding you and your business to a halt. You will lose momentum, and in an early-stage company, you need that momentum to overcome those first hurdles of business ownership.
How To Avoid This:
It’s extremely important to have adequate capitalization for the type of growth you’re expecting and intending. Intention is driven by marketing and sales, while expectation can be driven by historical patterns and performance. Once you have the appropriate capital, focus on keeping your momentum by prioritizing the 80% and not worrying about the last 5-10%. Remember: Momentum over perfection!
The Bottom Line
Owning a successful business goes hand in hand with owning one’s mistakes. And while these five mistakes can represent major stumbling blocks for an organization, with the right mindset and knowledge, they can be easily fixed.
I once heard the quote, “Wisdom has been chasing me, but I’ve always been faster.” It makes me chuckle, and many executives I’ve met over the course of my career resonate with it as well. That being said, may this wisdom catch you – wherever you are in your journey of business ownership.
Need Help Diagnosing Your Organization’s Pain Points?
If you're struggling to identify the root cause of your organization's problems, take the Value Builder Assessment to help you diagnose your company’s pain points. By taking the assessment, you can uncover the areas of your organization that hold the most value, as well as those that need improvement. Once you get your Value Builder score, The Resultants can guide you in making better strategic decisions to support your businesses’ growth and success.