U.S. Government data indicates that 8 out of 10 business start-ups fail. Even if the ratio improved to 5 out of 10 it’s not a very comforting thought for an entrepreneur starting a new business. What I find amazing is that many failures can be averted with a shift in a few leadership behaviors. Although critically important to small businesses, I encourage leaders from medium and large organizations to “read on” to avoid some common business pitfalls.
Vital signs, in medical terms, are defined as “measures of various physiological statistics in order to assess the most basic body functions.” My simple business translation is “things to watch so you don’t steer your business off a cliff.” All successful business leaders follow money – it is not the reason a company exists but it cannot survive without a steady flow. Revenue, expense and profitability require constant attention. But from my experience dealing with companies every day, money is only one of many important measures.
I’ll assume you are paying attention to money; but how are you doing in the other less obvious but highly critical areas? It’s time to take a mid-year inventory…
- Employee motivation and inspiration: Are your employees engaged in your business? Do they have a passion for what they do? Are they focused and determined problems solvers? Do they fully understand their roles and what it means to be successful?
- Team collaboration: In most organizations very little happens without teams, from leadership teams, committees and departments to project teams, cross functional teams, and other (often ADHOC) special teams. Are they efficient and productive? Do team members treat each other with respect? Are there healthy differences of opinion or unhealthy conflict? Do people feel free to constructively challenge each other? Is communication open?
- Creativity and innovation: Innovation is the single greatest contributor to long term business success – especially in this global marketplace – and it’s very difficult to achieve without the two items above. What new products or services have you developed? What improvements have you delivered? What contributions have been made to enhance internal processes and systems? How many new ideas were introduced and how many were implemented?
- Customer satisfaction: What is important to your customers? How do you know it is important – did you ask them? How are you measuring up? What needs to change? How should you communicate this to your employees and teams?
- Productivity and efficiency: Your business operations need to run smoothly to satisfy the needs of your customers and employees. From a “vital signs” perspective examine your value-stream (the flow of materials and information required to bring a product or service to a consumer), and identify key success indicators. Are you measuring them today? What are your performance gaps?
- Business plan execution: First, be sure you have a plan (you’d be surprised how many organizations do not have a current business plan) and then ask yourself, did we do what we said we would do?
It’s not rocket science and it doesn’t need to be; just a little pragmatism and discipline.