There will always be mistakes, oversights, and course adjustments made in any business. It’s human nature and how we learn. The goal of leadership should be to keep any one of those mistakes from being fatal. Here are three mistakes that can quickly lead to long term issues for your business.
Mistake #1: You build up capacity that you can’t scale back.
This is related mostly to capital good purchases and long term commitments. Buying a bunch of new tech infrastructure, signing a ten year office lease with too much space, or any other number of projects that consume capital dollars. We are moving to a utilization-based economy and those with excess capacity will find themselves in a difficult position when a downturn comes.
Mistake #2: You are working with vendors not partners in key business areas.
The “trusted advisor” label has been around forever and I would be wary of anyone that leads with this phrase. Trust is earned by actions over time, so let’s start off with the advisor part and earn that trust. I’m not talking about who you purchase office paper from. I’m talking about the groups you work with to help with financial , technology, and strategy areas.
It’s critical that these partners see the relationship as a two way street where both parties needs are valued. If you hire someone as a partner and then treat them as a vendor, don’t be surprised if they quit having your best interests in mind.
Mistake #3: You don’t measure your KPIs or even have them.
We are up to our eyeballs in data, especially data generated by our businesses. It is important to take the time to identify the ACTUAL DRIVERS of your business and measure them. Even if you have no long term plan, measuring KPIs that matter will give you clear feedback in the short term while you figure out the long term plan. Your profit and lost or income statement are not KPIs, they are a scorecard of what has already happened, also called lagging indicators.
Take the time to develop LEADING indicators that can be easily measured for your business and then watch them closely!
