Why do some companies succeed, while others fail? Although each family is unique and has its own share of “bad luck,” there are some common causes behind business failures.
Jeff Bezos, chairman and founder of Amazon, once wrote about 5 simple lessons drawn from his own experience in the famous E-tailer section of Amazon.com, in which the third lesson is: “Work efficiently and quickly fix even the smallest mistakes.” Jeff Bezos knows better than anyone what is hidden behind these words: He has raised Amazon.com to become a leading Internet brand, even though they have had years of business losses. On the other side of the ocean, Steve Case of American online also “knows” what speed and the race against time are. And this political science graduate has turned AOL into the first Internet company on the Fortune 500 list.
The CEO often likened managing AOL during its rapid growth to trying to control the engines of an airplane that could crash at any moment if not carefully controlled. If you apply Jeff Bezos's lesson to Steve Case's comparison, you can see that even the smallest failure has its own deep roots.
Improper planning
This is not surprising as it is one of the most common reasons, along with lack of capital or poor cash flow. It is important to create as comprehensive and detailed a business plan as possible. This can take time and once a plan is prepared, it can take weeks or months to complete. However, this is not wasted time, but time that can be used to achieve more certain success.
On the contrary, if you do not have a plan and still move forward blindly, you will most likely end up with a heart attack and tens of thousands of dollars gone up in smoke.
Lack of enforcement
When plans are not followed, mistakes are likely. And even when plans are not fully implemented, mistakes are common. When a CEO resigns or a CFO steps down, it is understood that it is because they failed to deliver on their expectations, or in the parlance of analysts, “management failed to deliver on their plan.” They are fired for obvious mistakes.
Perhaps, mistakes are more or less inborn (!). Employees in a company may have to take on a responsibility without being professionally trained or guided in the proper methods for this job. This is similar to when you volunteer to help someone do something without having an idea of what the job requires of you.
Not only that, subordinates sometimes try to impress their superiors, only to fail because they do not know that the results are the deciding factor. Worse, they do not follow the work order, and so they make mistakes right from the start.
A mistake can be a careless act, a slip due to lack of concentration, or even a lack of work ethic.
Lack of management capacity and experience
Many businesses are started by people with little or no management experience or training, because most entrepreneurs are self-made. Some people think that management is just common sense. But if managers do not know how to make appropriate business decisions, they will not be able to achieve success in the future.
Business risks, financial deficits
Financial management is about identifying risks and managing them. Mistakes happen when those risks are not adequately guarded against. Often, mistakes stem from a weakness in the business that goes unnoticed or unspoken, quickly turning into a financial scandal, such as a CFO who fails to warn investors when things go wrong, resulting in the CEO failing to meet his or her targets.
Good boss, bad employee
An enthusiastic, knowledgeable business owner can often be brought down or neutralized by inexperienced and unscrupulous employees. Therefore, the company needs good employees, who are well paid and share in the business ideas of the owner.
But once you fail, what to do next?
Consider the cause from yourself
It is important to find out what is causing your failure, because it will tell you what you need to change. Here are five things that can cause your failure:
1. Careless work: In any failure, the worst thing that can happen is intentional sabotage. If this is not the case, the main culprit is negligence. This is a sign of employee incompetence, as well as the impact it has on the entire company.
2. Urgent action: Lack of time can also be a factor. Evaluate your work progress and be more proactive with your time. Don’t take on tasks that you don’t have enough time to complete.
3. Bad judgment: The more experience you have, the better your decision making ability will be. Everyone makes mistakes due to poor judgment, the problem is that some people make more mistakes than others, that is why some people are leaders and some are employees.
4. Misunderstanding the job: Sometimes an experienced manager can provide a great guide for…something else. It’s important to stay focused on your current job, not on solutions to challenges that are yet to come.
5. Lack of information: Decisions are the “product” of available information. If a mistake is due to a lack of information, it is not the “end of the world” for the manager, but only a sign that an update of information is needed.
Be brave!
Besides considering objective and subjective causes, you yourself need to have the necessary factors to avoid continuing to "get stuck".
1. Know how to listen: The main reason for mistakes is that we are always on the defensive and need to defend our point of view, instead of focusing on analyzing and listening to the difficult problem.
2. Accept reality: You need to realize that the sooner you address your mistakes, the less you will be tormented by your “guilt” and the more experienced you will become as a manager.
3. Be a responsible person: There is nothing more impressive than recognizing someone who is responsible for whatever the situation is. So if you know you can’t hide that mistake, take a deep breath and admit it.
4. Be honest with yourself: Interrogate yourself about why you make mistakes. Are you really convinced that you are right, or are you just too stubborn? That’s bad, because nothing good comes from being stubborn. You need to break this habit as soon as possible.
5. Always stay positive: People will always remember your mistakes, no matter how small they are. Just remember that the difference between winners and losers is how they react and behave after each mistake. So when you lay your head on the pillow, think about your loss, but go to sleep knowing that you can overcome any difficulty.
And more brave
Now is the time to take action to save yourself from the mistake. Just because you made a mistake doesn’t mean you’re stupid. Everyone makes mistakes, even the best athletes and the smartest business people. The key is to remember that the higher you fly, the more dangerous it is, but there’s no escape from it.
You need to get your employees to agree on an action plan to fix the mistake. Tell them when you want to fix the mistake. Remember that sometimes you have to ask someone else to clean up the mess that you made. So if you have the opportunity to fix the mistake yourself and save face, make sure you don't make the same mistake again.
In short, we all make mistakes in business. Really, we all make mistakes. Just like in a baseball game, some players try to reach the first of the four bases to stay in their turn, while others block. No matter what position you play, you are likely to make mistakes.
If your role is to be a fence, chances are your ball will bounce off and break the window of a car parked outside. In any case, take responsibility, pay for the damage, and smile goodbye to the mistake.
