We have compiled this list of five common business mistakes that can be crippling to any business:
1. Making poor hiring and promotion decisions and repeating this process over and over again. It is truly amazing the number of companies that do not have a sound hiring process in place. It is equally amazing that most organizations do a very poor job of matching people to jobs.
2. Lack of accountability. In addition to poor hiring and promotion decisions, employees are often not held accountable for meeting reasonable, but demanding expectations. This impacts the organization in many ways, but most importantly in overall performance, employee morale and customer service.
3. Operating without a GOOD long-range strategic plan. Too many companies live for today. Some have developed plans, but they often lack vision and substance. Developing a long-range strategic plan is often viewed as an exercise that needs to be completed because companies should have one.
4. Managing with a short-term mentality. At the expense of the long-term viability of the company, management is too often focused on maximizing profits over the short-term. A short-term mentality very often leads to numerous operating and customer service problems that do significant damage to the company’s credibility and image. This is often caused by cuts in the workforce that are too deep or simply unwarranted, an unwillingness to spend money on activities or infrastructure that might be important and a focus on the compensation of management which is often directly tied to short-term profits.
5. Lack of cost controls. In too many organizations, money is spent on the wrong things and not spent on the things it should be spent on. Far too often, budgets are prepared without good assumptions and justification leading to overruns and missed profit targets. This can obviously have an adverse impact on banking and investor relationships. The balance between cost control and maintaining a long-term mentality can be difficult for managers not well trained or well prepared to deal with these issues.
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