Lack of leadership causes business failures

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Lack of leadership killing your business?

Lack of leadership causes business failure by business rescueIn a recent study conducted by Bloomberg, it was revealed that 80% of start-up businesses fail within their first 18 months. Business failure can come down to a number of factors, but one of the leading causes in businesses big or small is a lack of leadership. In fact, there are some disturbing trends globally which point to both a lack of leadership and a lack of confidence in leadership from their employees.

A survey of global executives and senior talent development professionals published by Harvard Business Publishing in September 2013 revealed that only 31% of respondents were confident their leaders have the right skills to successfully lead their business in the current global environment. Many believed their leaders did not have the appropriate leadership skills to achieve strategic goals. In another survey conducted by the University of Melbourne and the Australian Institute of Management, poor leadership was identified as the main reason that businesses failed to innovate and thrive.

So, what do we mean by lack of leadership? Here are a few of the classic signs;

Unclear Expectations – If expectations are not made clear to employees it hinders their ability to get the job done successfully. Leaders who are unclear may give vague instructions or constantly shift deadlines. They may also be complaining often about work that is not done up to standard.

Poor Communication – If communication with employees is not a priority, then low standards and low morale can be a result. Signs of this include leaders who are never in the office, don’t make time for employees and don’t reply to communications such as emails.

Poor People Skills – Leaders with poor people skills don’t listen to the opinions of others, spread negative sentiment, don’t respond well to complaints or suggestions and have no idea how to motivate others. They may intimidate or bully employees, or may feel the need to micro-manage, causing further resentment.

Failing to Get Advice – there is no one who can claim to know it all, so being able to acknowledge this and get appropriate professional advice is a sign of an intelligent leader. Poor leaders will be too arrogant to acknowledge when they need help and may refuse to get advice right to the point of business failure.

If leaders display any of the tendencies above, their workforce may be characterized by high turnover and poor morale, leading to poor company performance and even business failure. However, if a business is suffering from lack of leadership, it is still possible to implement a business turnaround and reverse those leadership problems. What you need is a well-researched plan to bring strong leadership into your company. Here are a few ideas;

Get Back to Basics – this means going back to the very core of your company and identifying what your goals as a business are. What does your business do and why do you do it? Once you have identified these things you can plan out the steps to achieve these goals, including what you need from employees and bringing in the leaders who are the best fit for those objectives. You may need to make some tough decisions with regard to letting go those who don’t fit, but if you want a business rescue, these things need to be done.

Train Supervisors – if you want to achieve growth, you will need more employees who are trained in supervisory positions and are on board with the objectives of the company. You could introduce a supervisory training program and look out for employees who display motivation, adaptability and leadership potential to bring into the program.

Get a Mentor – there is nothing quite like learning from those who have successfully gone before you. Find someone who is successful in your niche area and hire them on a consultancy basis. Allow them to come in and observe your business for a few days so that they are able to formulate a report with suggestions. Their plan should include leadership suggestions for achieving your company goals.

Establish your Business Culture – nothing kills a business worse than a toxic culture, and a toxic culture will not exist if there is good leadership in place supporting the type of culture your company wants. Lead by example and ensure that all other managers/supervisors in your business follow suit. This may require additional training and activities so make sure these are part of your plan.

Lack of leadership is a scourge upon the potential success of businesses the world over. If your business is showing signs of poor leadership, it may not be too late to establish a business turnaround. Get some help and devise a detailed plan, you just may be able to save your business before it joins the ranks of the many who have failed.

 

This entry was posted in Articles, Blog by Trevi Lim. Bookmark the permalink.

About Trevi Lim

Trevi Lim is a businessman, pharmacist, coach, mentor, entrepreneur, philanthropist, author and speaker. He went from working over 80 hours a week as an employee to now multi-business owner in less than 7 years. As founder and CEO of BusinessRescue, he specialises in helping turning businesses around and grow businesses to the next level. He is a passionate mentor and teacher who wants to show people how to achieve financial freedom through their business.

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