Common Ways of Business Failure – business.com


In a successful business, everything works like clockwork: every team member knows what they’re doing, every action is meaningful, and every plan is well thought out. In a bankrupt business, anything can quickly collapse: losses pile up, creating widespread chaos. A product undergoes constant change, and communication problems start to snowball. Customers don’t know who to contact with their questions, tasks are difficult to track, and results are impossible to measure.

Of course, no business is perfect. Every business can improve how it operates. This is often a gradual process, and as companies go through this journey, they often turn to the Japanese philosophy of kaizen. Kaizen aims to improve productivity, efficiency and communication, and reduce waste. Kaizen has an extensive classification of different types of waste, but they all boil down to three classes: muda, muri and mura. Muda, or inefficient process that does not add value, is probably the best known and most common of the three. But what is it that makes processes inefficient? And how can a company improve its efficiency to minimize losses and give meaning to its actions?

I’ve rounded up a few typical cases of how businesses suffer losses – and how they tend to get stuck in traps like overwork and missing every deadline. Through these cases, I also explain how you can break this vicious cycle by changing your mindset regarding goal setting or by selecting a dedicated goal management system.

Case 1: Losses due to constant changes

One of the most critical types of loss is caused by constant modification and remodeling. How many times have you heard a team member say, “Well, I thought this change would help,” triggering a new phase of product redesign? In a business, this often involves a mismatch between high-level vision or goals and the basic methods of achieving them.

Example

A company launches a new line of products, but the vision for the end product changes several times. The product is redesigned several times to take into account the ideas of the marketing team, the engineering team and key stakeholders. The development process becomes unacceptably long and yet, once the product hits the market, it lacks critical functions and does not meet basic customer needs.

Cause

The team focuses on the process rather than the goal. The goal itself lacks clear criteria: The goal of “creating a good product” allows for too much interpretation, creating a disruption in the team instead of bringing the staff together.

Company losses

  • Bad customer experience
  • Wasted resources
  • Low team morale

Solution

To eliminate this type of loss, it is crucial to clearly define your end goal and specify the benchmarks necessary to achieve it. Without a clear definition, your goal is little more than a shapeless dream.

The easiest way to visualize your ultimate goal (and your intermediate goals) is to create a goal tree interconnected and time-bound goals.

Case 2: Losses due to mindless work

Meaningless work is work that adds nothing to a business and accomplishes nothing. This often happens when staff see no purpose in the work they are doing and measure its effectiveness only by a narrow set of criteria, such as the number of lines of code written, meetings held, or e- read mails.

Example

Several teams jointly decide to add new features to a product and to develop an action plan. During the development process, it turns out that the features contradict each other and only confuse users. Therefore, management decides that the features cannot be used together in one product.

Cause

Each team works hard to achieve their own goal but fails to coordinate their work with the others. As a result, the efforts of at least one team fail.

Company losses

  • Wasted resources
  • Low team morale

Solution

Before your team starts any work, it’s important to have a clear understanding of how this relates to the bigger picture, along with the associated expectations and expected results. If the whole team shares a single, strategic vision and concept for a product, misalignment issues will go away.

Case 3: Losses due to mismanagement of human resources

Another key cause of business chaos is the inability to mobilize team members as planned. Imagine, in a hockey game, if the coach put a strong forward to the net as a goaltender. The result would be a disaster. A strong company values ​​the ideas of employees and supports their ambitions to learn and grow. To get the most out of your team’s talents, it’s essential to find a role for each team member that best matches their abilities.

Example

A customer service star is promoted to a position in the sales department. However, this employee struggles in his new job, finds that his efforts are not producing results and ends up resigning. This employee’s talent was caring – and a drive to achieve the best results by supporting people. The sales role focused more on assertiveness than empathy and caring, which made it a bad fit for the employee.

Cause

The company did not understand how to unlock the potential of employees. First of all, management did not have a clear vision of the basic needs of the business or the specific skills required of an employee to add value to the business. They also lacked sufficient knowledge of the employee’s strengths and qualifications to match them with the most suitable job.

Company losses

  • Low morale and high staff turnover
  • Head hunting costs (to replace the employee)
  • Time devoted to training and integration
  • Risks associated with hiring a new employee

Solution

The key starting point is understanding the purpose of your product or service – the specific problem it solves – and how value is created throughout the production process. This will help you anticipate customer requirements and expectations and determine your specific skills and resource needs.

Case 4: Losses due to staff turnover and inactivity time

Constant changes and misalignment of goals aren’t the only reasons businesses fall into chaos. Adding staff to a team at later stages of a project can significantly slow down the development process, resulting in additional losses.

Example

A business often adds new projects, and each new project has a different set of requirements, technical stacks, and necessary skills. As a result, most of the company’s time is spent on onboarding and staff transitions, rather than actual product development.

Cause

New team members always need time to level up. Repeated adjustments to ever-changing needs and circumstances prevent the team from focusing on bigger and more important goals. More time is spent learning than adding value to a specific project.

Company losses

  • Exhausted team
  • Time devoted to training and integration

Solution

Bringing your team together around a common goal is a key action in leading your business to success. Strategic approaches to planning, such as balanced dashboard goal setting framework, allows your team to plan for the required resources and skills – and to achieve synergy between multiple goals.

Put it all together

These examples show that vague goals or a lack of shared vision can kill any project, resulting in loss of reputation and operations for a business. To reduce waste, it’s essential to set achievable goals, define clear criteria for success, and then break each goal down into a hierarchy of measurable benchmarks. Management studies have produced multiple frameworks that any business can use to aid in setting goals and creating a goal tree – a structure of interconnected goals and the actions needed to achieve them. Whether manually or with a carefully selected goal tracker, setting the right goals will streamline your business processes, more effectively target your team’s needs and requirements, and reignite employee contract.

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