Five Reasons Why Companies & Leaders Fail or Underperform

Whether it’s a high-profile company like GE or Mid Cap Privately owned company, companies often are their own worst enemies. Whether their challenge is declining sales or stagnant earnings companies are often their own worst enemies – it’s not the competition that create the problem it’s the strategy and leadership.

Here’s my Top Five list of why Leadership & Companies lose their way:

1. The Vision Thing (or The Lack of):  This might sound obvious, but is the future of your organization exciting? What strategy are you executing? What is the vision and does the organization understand it but more importantly do they believe in it? Did the organization contribute to the vision/strategy and is there a process to keep them updated and get their input on a regular basis. If the answer is no, there’s work to do — and fast.

2. Shifting Whims/Strategic Priorities : You often see this in weak leadership that embraces every new management program. An example is investing in that are trendy in the business media and books but your customers don’t care about. ISO or Lean Black Belts may be philosophically the right thing to do but if you are a small business and your customers won’t pay for it you must be smart about where you invest your limited resources.  I applaud companies trying to improve and evolve but the challenge for most organizations is not establishing a strategic priority. Do these new programs align with our strategy? A common flaw of weak leadership is to not stick with new programs in a strategic way and shift from one program to the next because you think the bankers, investors or stockholders will be impressed. This whipsaws the organization and wastes resources ultimately creating frustration.

3. Big Company Bureaucracy: This is often also found in small companies that think they are big. It’s no fun to work in an environment where you have to always do what you’re told. The best companies hire great people and cut them loose. No one likes rules that make no sense. But, when good people are complaining it’s usually a sign that leadership is failing. Yes large organizations need rules, structure and procedures but good leaders find a balance and include their top talent in creating these procedures not just making them follow them. A leader must of the ability and confidence to surround themselves with smart and talented people and courage to listen and learn from them. This does not however preclude the need for leaders to make the tough decisions and lead - its all about balance.

4. Lack of Open-Mindedness:  Sometimes referred to as Collaborative Leadership or Teamwork, Good people want to share their ideas and have them considered but more importantly a good leader wants and needs their ideas! However, a lot of companies have a vision/strategy which they are trying to execute against — and, often find opposing voices to this strategy as an annoyance and a sign that someone’s not a “team player.” If the best people are leaving or are under achieving because they disagree with the strategy, you’re left with a bunch of “yes” people saying the same things to each other. You’ve got to be able to listen to others’ points of view — always incorporating the best parts of these new suggestions.

5. Is the Boss A Leader? At the end of the day it starts with leadership and creating an environment where people feel like they are contributing and belong to something. It is my fundamental belief and experience that humans want to belong to something that is successful. Think about it – sports teams, clubs, schools, church, families, etc…we all want to be part of a winning team that we are an integral part of. A leader’s job is to create an environment where this can happen. It’s certainly not a one-way street but a leader must assume the responsibility and create the framework for people to be part of the solution.

Leadership is one of the most debated and misunderstood concepts in business and life. The one thing what we can surely agree on is that all successful organizations have leaders that have a vision, believe in people and they have the moral compass to do what's right not the right thing!