How not to run a business – Big or Small

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How not to run a business – Big or Small

One of the most interesting competitions in the world of athletics is 100 meters dash. If you are a lover of the sport you will definitely notice one unique aspect of the race. It is a sport that demands deep focus, high level of concentration from the competing athletes before and during the race. The intensity of their concentration to succeed is something everyone needs to learn to succeed in any areas of endeavour. I recall the master of 100 meter races I have ever seen in the life of Olympic Games. The race was dubbed as ‘the dirtiest race in history.’  It was Seoul Olympics of 1998. What makes it unique was not the record that was set at the competition because the speeds master, the great sprinter of all time, Usain Bolt has shattered that record over and over again.

On September 24, 1988, atthe Seoul Olympics,the calibre and collection of the best 100 meters racers in the world at any time were on the track for the final 100 meter race.  Ben Johnson, Carl Lewis, Calvin Smith, Linford Christie, Dennis Mitchel etc. Johnson won the 100m final at the Summer Olympics in Seoul, lowering his own world record to 9.79 seconds. Johnson would later remark that he would have been even faster had he not raised his hand in the air just before he finished the race. However, Johnson’s urine samples were found to contain stanozolol, and he was disqualified three days later.Ben Johnson won the race but his success was short lived because he was found to have cheated to win the raceand other ethical issues were raised against him and his coach.

The Guiding principles

Business, like any race has ethics and standards that govern how it should be run or managed. That is why the scriptures say that ‘Do you not know that in a race all the runners run, but only one gets the prize? Run in such a way as to get the prize.  Everyone who competes in the games goes into strict training. They do it to get a crown that will not last, but we do it to get a crown that will last forever. Therefore I do not run like someone running aimlessly; I do not fight like a boxer beating the air. No, I strike a blow to my body and make it my slave so that after I have preached to others, I myself will not be disqualified for the prize’. (NIV)

To succeed in life, business or even in government and for the victory to be enduring and unadulterated, youmust compete under a strict guiding principles relating to that venture.

Unfortunately, some businessmen like sportsmen looks like they are taking stanozolol or other banned androgenic agents like anabolic steroids, in running their businesses. These ‘substances ‘are injurious to the health of the business and the people associated with it.

The number one rule in business is keeping your house in order. Slow and steady wins every time. Remember the old tortoise and hare story. To serve your customers well you have to focus on your people, quality of your products, delivery process, follow-thru, and follow-up. Going after all the business you can get drains your cash and actually reduces overall profitability. When you go after it all, you usually become less selective about customers and products, both of which drain profits from your company. This is what the accountants called overtrading. Doing too much too quickly with little capital and structure to support the volume.

Next to that is issue of Poor or weak management. Management of a business encompasses a number of activities: planning, organizing, controlling, directing and communicating. The cardinal rule of all business management is to know exactly where you stand at all times. A common problem faced by successful companies is growing beyond management resources or skills needed to run the business.

How about planning? If you don’t know where you are going, you will never get there. No clear picture of success will lead to status quo or stagnation. To grow and be successful you have to actively work on your business. As the saying goes, failing to plan is planning to fail.

Business as a race

Business is like a race of life. The only difference here is that it combines the attributes of both relay and marathon race together. How do I mean?  A relay in the sense that you exchange baton of leadership at a particular stage of the business life and a marathon because that race can be for a period of 10 to 40 years before the baton of leadership is exchanged depending on the type of business ownership you have.

In an owner manager employee (OME) kind of business, otherwise known as self-owned, sole proprietorship or one man business,the baton may be held till that time death separate the owner and the business.

If the owner is enlightened, he prepares or passes on the leadership baton to his /her successor or the heir apparent after 30 to 40 years of personal involvement of the owner depending on when the business actually started.

In a more structured business which is called limited liability company or public limited company (PLCs). Which I like to refer to as SMEs (Shareholders,Management and Employees) setting, change at the top is well programmed to some large extent.  This can be between 8 to 10 years depending on the company’s succession policy or what the law of the state says about issue of corporate governance.

Back to the basics

Back to our contemporary issue on how not to run a business, we can say that some businesses have been taking ‘banned substance’ in running their business systems. That is why you see them posting some small results and thereafter, the nemesis of not doing the right thing catches up with them within a short time.

What are these banned substances?

  1. Personal  ideas

    Business, just like human body system needs a good balanced diet for it to function maximally. The body need full nourishment of food that contains sufficient nutrients to enable every part of the body respond to calls whenever the need arise. Deficiency of balanced diet usually leads to malnutrition. Similarly, a business run on owner’s or leader’s personal ideas, common sense or ‘as the spirit directs is susceptible to failure or stunted growth. Today there are businesses who do not know anything about the business they are in except for personal ideas of the owner most of which are not working. Organisations thrives on superior ideas or arguments, collective sense or better still costly sense acquired through diligent search from proven authors or accomplished business leaders.

    How do you ensure these types of ideas flow freely in the system?  That becomes essentially important because it is a serious determinant of your business success or otherwise. Any business willing to move from bad to good or good to great must first institute a program that support free interchange or expression of ideas from all and sundry in the organisation.

    The role of business leader in such organisation is to make conscious effort by facilitating good and conducive atmosphere, where individuals in the organisation can trade ideas freely among themselves in a decent setting.

    The organisation must also have mechanism in place to reap the harvest, that is the fruits of this intellectual discuss in ‘a collection box’ for the owner or leaders to select relevant ones which can be put through the refining fire of circle of execution for it to produce expected result.

  2. Misinformation

    Information is the food of great organisations. Business thrives on it. That is why you often hear people say that information is power. People pay serious amount to get it. I am sure you must have heard of such terms like espionage, trade secrets. You buy it and you don’t allow it to leak out to your competitors.  That is how valuable good information is to any serious organisation. They guard it jealously. They can go to any extent to search for it.When you have the right information to work with, couple with the knowledge of the business you are into and you apply wisdom which is the application of acquired sense, you then add the ingredients of success called diligence, what you will get out of the recipe is always assured good result. There is no doubt about it in the art of running a successful business. The end result is predictable and the probability of its success is always ninety nine per cent accurate.

    Information is a great asset in the world of business success. You must be informed in order to be transformed. The whole world is trading on information. You need the facts of whatever you are engaged in to succeed in it as it takes facts to become fat.

    Unfortunately, some business leaders encourage rumour mongering; tittle-tattle and out right misinformation to run their business. No business thrives in chaos, even the great author, Tom Peters in his book Thriving in chaos only used the term to explain how a company can come out of chaotic world and still remain relevant in the business world.

    Business, like money and human being prefer a decent and serene environment to flourish. Any business built on outright falsehood, misinformation or rumour is bound to fail.

    My living bible renders it this way, ‘Any enterprise is built by wise planning, becomes strong through ‘collective’ common sense, and profit wonderfully by keeping abreast of the facts’

    It is facts that make business to profit wonderfully and not story telling or misinformation.

  3. Working with Incompetent people

    This flows from the last point on misinformation. The quality of the people working in any organisation determines the success rate of the business. How competent are they? Are they professionals or amateurs? Competent people are usually professionals or demonstrate professionalism in their work ethics. They know what to do, how to do it, when to do it and where to do it. They operate from the position of knowledge acquired through quality education not schooling.People factor is a serious issue in business success equation. The reason is this, if all other factors are good and ready to go and you have problem with the competency of your team, then you aren’t going anywhere.

    Surrounding the business with incompetent and negative people will not only do untold damage to the business but it has the capacity to drive away the very good ones in the system. You know good and bad are not the best of friends, they are completely opposite.

    The cost of employee’s incompetence and poor performance can be staggering.  Failure to take immediate actionusually results in ineffective products and services, low employee morale, diminished public confidence, employer liability, and sometimes increased litigation.

    Employee that is so negative and incompetent makes the lives of their bosses very difficult. This type of employee has a funeral all the time that they even forget and announce that an uncle has died more than once or the husband or wife is always on sick bed at the hospital every week.

    Incompetent employees with negative behaviours never complete assignments on time and to the best standards, no matter how often they are told of the urgency. They make so many mistakes that many times the boss makes a decision to simply do the assignment themselves.

    Often times the same negative attitude always translates to the customer or client. The employees are rude, they are never in a hurry to assist customer.

    To avoidthe case of proverbial “one bad apple”in the systemyou got to deal with the issue head on before they eat up the business and send everybody parking.  Set a high standard for your business and let everyonethat works there knows that there is a zero tolerance for poor performance in the organisation.

  4. Poor quality products and services

    A  Company’s reputation is based on many things – the experience of the senior management team, the company’s financial performance, its stock price, product innovation, delivery on commitments, etc.  The quality of its products stands high on the list as one of the major determinants of a company’s reputation.  Positive reputations are hard to achieve, and take a lot of time, effort, blood, sweat, and tears to build.  However, positive reputations are easy to destroy.  Deliver products late to market and you damage not only your company’s reputation, but also the reputations of some of your customers who depend on your timely delivery on your commitments.  Poor product quality can destroy the reputation of your company’s products, but in most cases has an even more serious impact – when people see a company put out poor quality products, they strongly associate those poor quality products as coming from a poor quality company.  You are what you make!

    What kind of company would knowingly release poor quality products except a bad company?  What kind of people must a company employ who are content to release poor quality products except incompetent employees?  What kinds of poor development processes must exist for poor quality products to get releasedexcept lousy processes?  What kinds of quality assurance and quality control processes allow poor quality products to make it out the door except a man operating on personal ideas?  If a company can’t control the quality of its products, which are what enable the company to generate revenues, then why should people have any faith in other aspects of the company – its financial reporting, its marketing plans, its sales projections, etc.

    Poor quality products and services not only have a direct impact on the reputation of the company, as discussed above, but also have a direct impact on the financials of the company as well.  They directly impact both the company’s top line (revenues) and its bottom line (profits).

  5. Lousy business processes

    One of the ways successful companies gain a competitive advantage is through creating process advantage. Companies like Toyota, Apple and Ford have built such amazing processes into their operations that support high quality product delivery.  The problem is most companies are buried in process disadvantage.

    Good process is sophisticated not complex, efficient but simple and effective, usable and value adding. Good business processes serve as the central nervous system for your organization providing a framework for every action, decision, activity or innovation to flow from and through.

    Good process serves as a catalyst for innovation, which in turn optimizes and accelerates engagement, collaboration, work-flow, and enhances the overall productivity of business initiatives.

    Good process comes as a by-product of clarity of purpose. It is the natural extension of values, vision, mission, strategy, goals, objectives and tactics. Process is the part of the value chain that holds everything together and brings and ordered yet flexible discipline to your business.

    Good process results in a highly usable infrastructure being adopted across the enterprise because it is effective for staff, and provides visibility and accountability for management, all of which increases the certainty of execution. Good process across all areas of the enterprise will result in elimination of redundancy and inefficiency, better engagement and collaboration, shortening of cycle times, better knowledge management and business intelligence, increased customer satisfaction, and increased margins. If this is missing in your organisation you need to talk to your consultants.

    In conclusion, the success of your business depends in the ability of corporate leaders to look at these five critical elements of business ensure that they are working in sync with the corporate objectives of the business and in line with best practices. You may subject each of them to a ‘dope  test’ or MRI scan (Magnetic Resonance Imaging)An MRI scan is one of the most sophisticated diagnostic tools available to help a referring clinician understand the cause of a particular health issue. Once the business passes this test you are sure that it’s on its way to the top. Despite the fact that the beginning may be small but the latter end surely shall greatly increase.