Top 15+ business mistakes and deadly sins
Businesses are struggling right now, but many are simply throwing their hands up. Take the time to analyze what is going on under the hood of your business, before it’s too late.
Business mistake #1 – Lack of passion
Passion is the first – and most essential – ingredient for building a strong corporate culture. Every great invention, every medical breakthrough, and every advance of humankind began with passion. A passion for change – for making the world a better place. A passion to contribute – to make a difference. A passion to discover something new.
With a team full of passion, you can accomplish just about anything. Without it, your employees become mere clock-punching automatons.
Business mistake #2 – Lack of sense of purpose
One key is to realize that passion alone isn’t quite enough: You must also focus that passion into a sense of purpose.
Most companies have mission statements – as well as vision statements, value statements, and other official website/employee handbook fodder. But what they really need is a cause, and that’s altogether different. Once organizations know why they exist, to whom they want transformation to happen and why, they gain the audacity and authenticity to drive strategic business transformation.
Don’t confuse “cause” with “mission”. A cause is a lasting theme, an architecture that supports the transformation of the greater environment.
Steve Jobs wanted to “put a ding in the universe.” Pixar wanted to reinvent the animated film industry. Pfizer is about saving lives. Whole Foods Market was founded with the goal of becoming the world’s leading natural and organic foods supermarket retailer.
I think Whole Foods’ highest purpose is a heroic one: to try to change and improve our world. That is what animates me personally. That is what animates the company – Cofounder and Co-CEO John Mackey in Harvard Business Review
Business mistake #3 – Neglecting culture
Corporate culture is an incredibly powerful factor in a company’s long-term success. No matter how good your strategy is, when it comes down to it, people always make the difference.
Executives spend a lot of time worrying about their companies’ products and prices, but they don’t spend nearly enough time worrying about corporate character.
Without culture, everything else cannot work. Strategy will only succeed if it is supported by the appropriate cultural attributes.
Business mistake #4 – Complacency
Complacency almost always comes from a sense of success and lives long after the success that created it has disappeared. Organizations and individuals that are complacent do not look for new opportunities or hazards. They are almost always internally focused.
Complacency is a dangerous culture that permeates beyond the walls of mega corporations and extends into the reaches of every day companies and institutions.
We have a problem Houston!
Business mistake #5 – Don’t let things get arrogant
Big companies start off with verve and energy and aspiration and incredible values that fuel their growth, then grow to the point that they’re no longer in tune with what really moved the enterprise forward in the first place. It happened to McDonald’s, IBM, Starbucks and it even happened to Apple and Nokia.
Business mistake #6 – Pride
Healthy pride quickly tips over into hubris – an overestimation of your own abilities. In all the recent corporate crises – News International, Nokia, BP, even Toyota – there was tangible evidence of hubris in the manner and words of the executives at the top.
Pride does, indeed, go before a fall. Perhaps the biggest tale of misplaced pride in recent years was Enron – its executives liked to think of themselves as the “smartest guys in the room,” and they shortened the company’s vision from becoming the “world’s leading energy company” to becoming “the world’s leading company.” And we all know what happened there.
Business mistake #7 – Believing you can see the future
Unless you possess a crystal ball and remarkable prophetic abilities, believing you can see the future is delusional at best.
Borders was a pioneer of the mega bookstore category, but when things began to go digital, it bet big on in-store media downloads. Instead of making midcourse corrections, it rode its strategy all the way to bankruptcy.
Houston, we have a problem
Business mistake # 8 – Blind to disruptive changes in the marketplace
In a fast-moving and changing world, a sleepy or steadfast contentment with the status quo can create disaster.
Organizations, and the people within them, must constantly re-invent themselves to remain competitive. Sustaining success depends on an organization’s ability to adapt to a changing environment.
Smartphones and tablet-PC have already disrupted or is disrupting many different business. The potential to disrupt several other businesses is huge, so is the opportunity for incumbents to adopt the smartphones and tablet-PC before more agile start-ups disrupt their business.
Business mistake #9 – The impact of collaborative consumption
The advocates of collaborative consumption claim that the rapid rise of sharing and swapping represents a social change that is as profound as the industrial revolution. While the industrial revolution marked the beginning of mass production and ownership, collaborative consumption is slowing down the rate of production and consumption by creating new ways to get access to things without proclaiming exclusive ownership.
Business mistake #10 – Lack of employee engagement
The best-performing companies know that an employee engagement improvement strategy linked to the achievement of corporate goals will help them win in the marketplace.
Business mistake #11 – Not involving employees and customers in creating new ideas
As the modern business environment continues to evolve into a more complex and competitive landscape, it’s become increasingly important for companies to tap into their creative side and push boundaries with new ideas.
Engaged employees share their ideas more often, generate more ideas, and generate better ideas.
Business mistake #12 – Neglecting the impact of social media
Businesses to consumer industries are facing tremendous changes in the way customers wish to be served. This puts a lot of pressure on management to understand that if the consumer’s or customer’s way of behavior changes, this means that the company’s customer service needs to change.
Business mistake #13 – Lack of innovation
Unfortunately, many companies fail to unleash their most valuable resources: human creativity, imagination, and original thinking. They lack a systematic approach to building a culture of innovation, and then wonder why they keep getting beaten to the punch.
Business mistake #14 – Ignoring the two orders of value
If you assume that rational and emotional value propositions are all you need to consider, think again. There’s also a “higher order” value proposition: the symbolic. Customers symbolically attach to the product or the company that sells the product. They come to identify with the purpose of the product and what it stands for. Organizations that are able to transfer and connect market momentum into value to the customers that emerge from a transformation will gain market share and be very successful.
Business mistake #15 – Customers are not relevant
Company leaders who don’t listen to and respond to customer needs are facing financial trouble. Sadly, these managers believe their products are compelling – that they are well designed and correctly manufactured. They see no need to talk to potential buyers. They also see no reason to innovate to develop new offerings. They suppose customers will never seek improvements or that competitors will never surpass them. They allocate no funds to research. Customers don’t care for their products and don’t buy them.
Business mistake #16 – Dreadful customer service and support
Managers who do not take care of customers are destined to fail. Leaders who over promise and under deliver will watch a steady stream of their unhappy customers head for the door, while also telling their friends to shop elsewhere. Managers who mistreat, abuse and disrespect customers will not be successful.
Business mistake #17 – Customer concentration
Companies that engage with one very large customer are at high risk. This assumes that the predominant client represents more than 50% of company revenues. Several companies have declared bankruptcy when the big buyer selected another vendor or pursued another strategic direction. In either case, these small providers could not recover the enormous loss of revenue and were unable to sustain the business.
Business mistake #18 – Slaughtering tomorrow’s opportunity on the altar of yesterday
Although IBM once dominated the personal computer business, it was subordinated to mainframe sales – their old cash cow – even forbidding the sale of PCs to potential mainframe businesses. Instead of creating new mainframe sales, PC sales were stunted, opening the way for “clones” to take over the market. IBM no longer sells PCs.
Business mistake #19 – Mispricing a new product by charging what the market will bear
Xerox charged the highest prices possible when they first produced the photocopier. New Japanese competitors charged about 40% less and came to dominate the market.
Business mistake #20 – Worshiping high profit margins and premium pricing
Xerox Corporation, which invented the photocopier, began adding ever more features to drive up the profit margin and increase the stock price. Most consumers, however, wanting only a basic machine, turned to Xerox’s competitors instead. Xerox barely survived.
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