If you walk into any organisation, you will see some form of structure in place which includes people, processes, products and services which leads to value creation. It sounds simple, yet there are major challenges which organisations face. This is true, especially given the global uncertainties. Many fold up while others simply stagnate with no growth prospects. Forecasts are usually conservative leading to depressing results for many.
To add to this, there are regulations, external pressures as well as meeting owners expectations. All these issues result in companies facing difficulties in the long run.
In this post, I list 5 key factors which are considered as failure enablers.
1) Short term Thinking – Probably the most used phrase amongst many executives, yet the least understood . The biggest problem amongst directors and executives is that they are under pressure to keep posting strong results every single year. With a time deadline, they will do whatever it takes to ensure that they make profits. We have witnessed what the financial sector had gone through as regards the sub-prime crisis. The lessons are not yet learnt and companies fail to connect long term to short term. Instead of quick solutions such as innovating a product without considering the long term repercussions, organisations must have research and development as a fore runner.
2) Growing beyond capacity - Some organisations are so dynamic that they want to grow beyond what they are capable of. This leads to losing focus and may be detrimental to the core business in the future. Employing more managers and later closing divisions leads to huge financial drains. It is very important to think through properly before planning for any expansions.
3) The Right team – One of the biggest assets an organisation has, is the people they have working for them. If this recipe is not right, your organisation will face difficulties. Sadly, money and remuneration has taken precedence over work competence and skills. Executives are result driven, but only short term in nature. This leads to compromise and building upon fast results in order to please stakeholders. Leadership qualities are somewhat sub standard in nature.
4) Maintaining true focus and priorities – In a world full of complexities, companies tend to get controlled by events rather than control events. Instead of sticking to focus on the true existence and purpose, executives digress into a myriad of issues which contains a lot of fire fighting and micromanaging. The bigger picture is totally misplaced in the entire equation and matters considered urgent are dealt with. This is what they are comfortable with. Sadly complacency kicks and oversight and controls miss out on the true attention they deserve.
5) The core linkage process – One thing I have realised from my experience is to have a strong know how of Strategy, Risk, Finance and Best practice. This applies to all managers and above in an organisational ladder. These areas are crucial. I have heard many complaining that they don’t understand strategy or finance. The problem is, they don’t ask for the right help and don’t take initiatives to learn these important areas which form the core foundation of an organisational structure. A Steel company recently bought one of our finance training programs as well as had a workshop on best practice and saw some quick positive results . Executives must seek some level of relevant training which will help them improve their understanding and decisions they make.
I am sure there are some others which I will cover in the future, but for now, if you act on the above, your chances of having a stronger sustainable organisation are much higher.
