A while back I wrote an article on the biggest problems facing small business in general. It generated a lot of interest and is by far my most read article. That tells me that business leaders are not only searching for answers but are also searching for the right questions.
To clarify that point, many business leaders know their organizations aren’t doing as well as they want they just don’t know why. Things such as declining revenue, shrinking profit margins, and losses of customers are obvious, but they are the result of problems not the real issue. This is further confused by a poor economy, is my company doing poorly because the economy is slow, or are the causes internal?
Poor economic times allow weak organizations to fail. That may sound harsh but think about it, dollars are still in circulation, there are just fewer of them. Consumers still need goods and services, they are just more cautious about buying them. I used the example if there are five auto repair shops in an area, people still need their cars repaired, they just won’t do it as quickly or as often. The top service providers with the loyal following will survive, the marginal ones will not.
The top problems for small business in 2010 aren’t new, they are simply being magnified, and they will continue to become more and more critical. We need to accept that “business as usual” will never mean the same thing. Technology is making the world smaller. There are new competitors entering nearly every market every day. The Internet has created an environment where small companies can level the playing field with large corporations by reaching millions of people with their message with little or no cost. Good news as well as bad news on a product or service travels far and fast.
So the biggest problems for business in 2010?
1. Lack of a clear vision and plan – Most companies don’t have one. Throwing something at the market and hoping it will stick will become tougher and tougher. Find a niche and excel at it.
2. Lack of execution – When you decide on a strategy execute.
a. Over 90% of strategies that are developed are never executed.
b. 75% of improvement projects fail.
c. 85% of leaders spend less that 1-hour per month on strategy.
d. Over 90% of employees don’t know the company’s strategy. (This is a direct result of top management not documenting and communicating it)
e. Well over 90% of organizations don’t have meaningful performance measurements in place.
3. Ineffective leadership – Things are moving faster and are more complex, and an effective leader must develop an environment that fosters innovation and open communications to take advantage of all human and capital resources.
4. Sales and marketing effectiveness – this leads back to planning and leadership. Many companies have not taken the time to decide what their USP is. They try to compete in conflicting areas, such as lowest price and highest service. One takes away dollars and the other adds cost. Part of the planning process should include a very clear answer to one simple question, “with all of the products and services available to my customers why should they buy from me?”
In my book I had a chapter that stated flatly that all businesses have problems. While this may seem obvious my experience has taught me that not all leaders deal with problems in the same way. Many unfortunately try to deal with them by ignoring them, others by treating a symptom, still others by trying to blame someone. A few actually use meaningful data to get to the root cause and fix the issue.
The economy seems to be rebounding in 2010. The questions is what have you done as a business leader to position your organization to take advantage of it?