Secrets of the CEOs: 100 Reasons Why Good Businesses Go Bad

By Hank Moore
The Speaker's Platform

Failure to take pro-active business strategies and steps becomes a habit in any organization. Let one thing slide, and another layer of problems will appear. It`s easier and more comfortable to look the other way.

Organizations try to maintain the status quo, thinking it to be their best course, by finding greater comfort with the "same old, same old," rather than new concepts. Habits become annointed as "traditions" by the organizations denying the implications of change, hoping their problems will go away and focusing anywhere besides their own culpability with problems. Problems are seemingly swept under the carpet by blaming mistakes away, refusal to take personal accountability and failure to emphasize the positives.

There are costs attached to neglect, indecision and non-actions. Failure to take pro-active measures costs the organization exponentially each year by six.

You and your company will pay the bills for damage caused by inertia or lack of progress. Waste, spoilage, down-time and empty activities currently may exist bringing down productivity and profitability potential.

Lack of having a cohesive marketplace strategy means you`re chasing too many of the wrong leads, prospects or markets, which sets the company back.

By sticking to "business as usual," even when it is clearly not what it used to be, companies began telling themselves the great lies which justify their refusal to change...and believe them to be truisms.

Long-term expenses incurred by adopting quick fixes and applying "band-aid surgery" to problems usually result in opening new ones. Possessing an inability to spot where the current and upcoming opportunities lie result in the company abdicating its marketplace to others. The company falls behind the competition...out of failure to change, grow and succeed, plus failure to recognize and reward the strengths within your own organization.

These are the 100 Reasons Why Good Businesses Go Bad, categorized per each branch of The Business Tree™ . Take the following test. Grade your company. More than 40 bullet points checked is a failing score. Consider these negatives as opportunities to improve growth and success.

The Business You`re In...

1. Service is rendered, and products are designed and manufactured the same way in which they always were.

2. Technical abilities and specialties are not further developed after the company's initial successes in creating their widget.

3. The presumption held is that, if it worked for the company founder(s), then it still works for the rest of the industry and all competitors within it.

4. Management doesn`t see the need to use industry consultants or technical specialists.

5. Core business supplier relationships have not been examined or updated lately.

6. No investment has been made toward quality controls.

7. The company applies "band-aid surgery" toward core business issues and problems...but only at such time they absolutely have to or are forced to.

Running the Business...

8. The business continues to be run as they always have operated, citing the first way of doing things as a "tradition."

9. Top management subscribes to the philosophy, "If it ain`t broke, don`t fix it."

10. Lack of formal organizational structure leaves many company executives blamable but not accountable, with many unclear as to their roles and responsibilities.

11. Practices, procedures, operations, structure are not documented in writing, nor are they communicated to employees.

12. Measuring performance is not factored into the production continuum. Management asks, "Why bother to review everything? Let`s just do it."

13. The physical plant is not regularly studied, updated or modified. Management contends, "It was good enough when we built it and still fits our needs."

14. Cost containment is the main driver of all process applications, technologies, equipment, supplies and systems.

15. Distribution standards are not documented, practiced or measured.

16. Time management is not observed, studied or utilized. The attitude is perpetuated, "When it`s ready, it`s ready."

17. The company continues to stockpile inventories. No efforts are made to reduce surplus or adopt practices such as "just in time delivery."

18. Management does not consult the lawyers until the company gets in trouble or sued.

19. The organization rarely outsources, if ever. The prevailing attitude is: "We have enough engineers and technicians working for us. Why pay others on the outside?"

20. Executives believe that computer software is the one and only answer to take care of all company problems and that computer consultants are expert business strategists.

21. No telecommunications system or strategy exists. "We already have telephones," they cry, as a rag-tag setup angers customers and diverts business.

22. The administrative function does not have a written, formal purchasing plan. "When we need something, just send out for it."

23. To cut expenses, repair and maintenance contracts are not held and are often not renewed.

24. Equipment is bought outright, rather than leased or financed.

25. Continuous quality improvement is not practiced. No consideration is given toward creating or implementing such a program.

26. The company applies "band-aid surgery" toward process and operations facets...but only at such time they absolutely have to or are forced to.

Financial...

27. The belief is steadfastly held that every product must make a profit, at all times.

28. Few, if any, profits are plowed back into the business. Few long term investments are made.

29. The company`s book of assets are not adequately valued or managed.

30. Owners believe that the only reason for being in business is to make as much money for themselves as possible.

31. Cash flow, forecasting and budgeting are inconsistent, if monitored at all.

32. Policies with receivables are not formal, and squeaky wheels get the grease.

33. The business officer does not concern himself about equity and debt financing. The contention is that such things are only applicable to public companies.

34. The company doesn`t call or consult the accounting firm until income tax season or audit time.

35. Banking and investing relationships are not fully valued and are perceived as free advice from vendors.

36. Creditor payments are drug out as long as possible...even paying past-due interest when charged. The game is to keep them waiting...using their money interest-free, without realizing the costs of administrative minutia.

37. The company has gotten a reputation for being slow-pay. The accounts payable officer never mediates differences with creditors until they sue, figuring that if one wears creditors down, they will hopefully go away.

38. Finance charges are paid at maximum rates. No attempt has been made to negotiate volume discounts.

39. The company buys the cheapest insurance, which leaves company employees under-covered, unnecessarily bothered by third-party red tape and not as focused on company loyalty as they could be.

40. Management does not see any relationship of benefits packages toward heightened employee productivity.

41. The company applies "band-aid surgery" toward financial dynamics...but only at such time they absolutely have to or are forced.

People...

42. The corporate culture is slow paced, sluggish and without professionalism.

43. Employees are complacent and rarely carry the company banner forward. Low morale persists and builds upon itself.

44. Human resources does not pay recruiters and personnel firms. They run ads only when they need people to fill specific job titles.

45. Human resources hires only to fill vacant jobs, rather than available and recruitable talent matched to potential company opportunities.

46. Top management does not see itself as needing to have People development, skills or team building responsibilities.

47. Human Resources department perceives that it knows what the company is all about...is expected to take care of all problems, without top management intervening.

48. Only executives get bonuses. Others should be grateful to get a regular paycheck.

49. The boss takes the attitude, "Those people work for me. I don`t work for them."

50. A regular paycheck is thought to be the only and best incentive for people to work.

51. Upon hiring, employees are handed nebulous job descriptions and are supposed to perform. If they don`t, they`re fired.

52. Management believes that troublesome employees are easily replaceable and does not realize the economic sense of saving productive workers.

53. Executives see themselves as being the heart of the company. "They do the real work, especially the ones whom the CEO brought on board."

54. The value of training is not understood, appreciated or related to employee performance or the bottom line. They ask, "Why spend money on professional development?"

55. The company develops and teaches all workshops and seminars with in-house talent. The value of outsourced training by niche experts is not comprehended.

56. Management does not know how to discern among or properly utilize business consultants. To cover its lack of analytical ability, it queries, "Why do consultants keep looking at how the organization operates? They cannot possibly know what we know."

57. Performance reviews are arbitrary and are never held with any regularity, nor are employees judged against viable corporate objectives.

58. Empowerment, team building and people skills programs are seen as necessary evils and are minimized.

59. The company applies "band-aid surgery" toward people and their issues...but only at such time they absolutely have to or are forced.

Business Development...

60. The company does not have a clearly defined image or communications strategy.

61. Branding depends upon the boss` latest whim or whatever company he wants to copy.

62. The communications section manager is never in the planning or production loops, nor is asked to advise corporate management.

63. No formal, written or measurable sales plan exists. Goals are either unreasonably high, or dangerously low.

64. Marketing and sales are viewed as the same thing and, thus, are lumped together in management`s consciousness.

65. No formal marketing plan exists. Marketing is done either on a whim or after the fact.

66. The sales force is not valued and is seen as a necessary evil. "If sales slack off, then we fire people and go hire those who can sell."

67. Sales and marketing people are under-trained, under-managed and threatened with termination for not meeting quotas... always with an axe poised over their heads.

68. No formal written advertising program exists. The company simply runs ads without any planning.

69. No formal written public relations program exists.

70. Advertising and public relations are viewed as the same thing and are lumped together in management`s consciousness.

71. The cheapest possible promotional activities are utilized. Incentives, advertising specialties and customer appreciation items are not factored into the marketing budget.

72. All creative work is done in-house. No need to buy graphic, audio-visual, advertising, research or other promotional services is seen. Thus, expenses are incurred to fully staff a creative services department.

73. Top management does not see itself as needing to maintain or contribute to Business Development responsibilities.

74. Incorrect assumptions preclude an aggressive communications strategy. "The marketplace knows who we are. Why should we have to adapt?"

75. Marketing and sales are viewed only as necessary evils. Engineers and other core business practitioners disdain the concepts and refuse to cooperate with marketing and sales.

76. The company applies "band-aid surgery" toward business development...but only at such time they absolutely have to or are forced to.

Body of Knowledge...

77. The company maintains a false sense of success, rarely attributing the contributions of employees and scapegoating others for management`s own shortcomings.

78. Critical faculties toward pro-active change become low, and thus, the company remains stuck in a complacent mode.

79. Management has an inability to predict or stay ahead of trends. "Why worry about changing markets, opportunities, barriers, since we don`t need to change?"

80. Decision makers never learn the lessons of failure or the true reasons for successes.

81. The company follows its industry, rather than leading. Product and service development take place after its competitors do the innovating.

82. Management keeps its head in the sand. The rationale is, "Nothing that goes on outside our company affects our business in any way."

83. There is an unwillingness to invest in research or to comprehend how it might impact corporate growth.

84. There is a reluctance to joint-venture or work with other companies. Some contend, "They just want to steal our customers."

85. It is believed that government agencies and regulators are to be avoided, feared, fought or ignored. The concept of collaboratively volunteering to work with them in achieving mutual goals is not on the radar.

86. Company leadership feels that it does not owe anything back to the communities in which it works, nor has the need to interface with them.

87. The company applies "band-aid surgery" toward anything affecting the wholistic operation of the company...but only at such time they absolutely have to, or are forced.

The Big Picture...

88. Applying "band-aid surgery" to problems keeps the company from ever having to create, face or benchmark against a Big Picture.

89. No Shared Vision is ever crafted, let alone articulated and followed.

90. Low corporate self-esteem persists.

91. The CEO remains isolated from creative, contrary or augementive viewpoints. "Why share ideas and philosophies with anybody else? I know what I`m doing." Corporate purges result from isolationism.

92. Creative business practices are not welcome, sought out, or achieved.

93. Strategic planning is viewed as a superfluous exercise that is only applicable to companies other than ours.

94. Strategic planning is done when the boss goes away for the weekend and comes back with a list of things to be executed by others.

95. The assumption is that one corporate culture is held equally by all employees. "Whatever the company thinks, so will all of its employees."

96. "Outside-the-box thinking does not apply to us, nor will be tolerated. What is it, anyway?"

97. "We do not engage in unethical practices. What is an ethics statement?"

98. "The quality process means doing things the way we've always done them, without deviation or interference by unwanted intruders. What is Continuous Quality Improvement, anyway?"

99. No crisis management, preparedness or prevention program exists. Management deals with each crisis as it comes up.

100. At best, change will be tolerated. Most resources have already been expended to fight and prevent change from occurring.

Tallying the High Costs

On a scale of 1-100, how did the company which you rated fare? If the total number of bullets checked exceeds 40, this means assured failure. 20-40 means barely getting by...which is not acceptable in today`s competitive economy.

Think of the changes and improvements necessary to get the organization to have less than 20 bullet points checked...because that`s what it will take to succeed.

Most of the statements quoted above are voiced by poorly run companies which are clueless about sophisticated growth skills. However, pro-active techniques for actualized company growth can be learned. An articulated, well-implemented vision will pre-empt and prevent many of the mistakes that companies make.

There are two choices, completely up to each organization: (1) The company that does not champion change will falter and die. (2) The company that capitalizes upon change (which is 90% beneficial) will grow and prosper.

As each company pursues the strategic planning process, a deeper understanding of the business develops. The company begins to address and master change, rather than becoming a victim of it.