Why good businesses fail?

It is widely accepted and acknowledged that businesses if they are not good, will automatically fail. But this does not always ensure that good businesses never fail. In this presentation, we shall look into some of the important aspects, which lead good businesses to failure!

What are the basic requirements for any business?

Four Ps - Product, Process, Pricing and People

What factors can be managed and

within the control of the management?

3 Ps – Product Process and Pricing

Why people are omitted from the above? Is it difficult or beyond the purview of the management? Why this exclusion? Any specific reasons?

Firstly, it is to be borne in mind that though the management can control the people, but some key people representing management may not have the sagacity and capacity to deal with the people

Secondly, such representatives have their own preferences, for people, placement, performance rewards and this motivates the chosen few and de motivates the rest even though all of them perform well!

Thirdly, such representatives should not have occupied such high positions in the first place. Probably the owners have committed a mistake

in recruiting and retaining them in crucial slots

Fourthly, such representatives being shrewd operators, pitch people against people and in the ensuing melee, they intervene as if to pacify them and the people also fall a prey to this game plan. This ensures that the representatives have an upper hand always.

Fifthly, these representatives have a tendency to criticize their seniors / fellow representatives at their back openly in the presence of their subordinates; the subordinates many times wonder whether these backbiters will do the

same thing with them also in their absence.  

Sixthly, these representatives have a unique problem solving technique. Whenever their subordinates approach them, they will give a very patient hearing. After that they will ask their subordinates with all seriousness, what are the possible solutions. The subordinates will list them out and the representatives will pick one and implement. If this happens once in a while, the subordinates would be happy – that they are being heard and their view points taken care off. However, if this tactic is adopted each and every time, the subordinates get the nagging feeling whether the representatives have any solution from their side. This erodes their credibility

Seventhly, these representatives will by pass their immediate second line and deal with the subordinates directly without their knowledge and shower benefits / incentives. Naturally, these subordinates will not have any respect for the middle level authority since they know they can get things from the representatives directly and without their recommendations / intervention

Eightly, these representatives will object and will not take it lightly, in case the second line happen to deal with or write to their super seniors who are the ultimate in command line even in the absence of the representatives. This will make the second line to feel – to say the least – totally let down

The list will be never ending.

What is the solution to this?

How to manage such representatives and still produce sterling performance?

Any of the following options can be pursued:

- the representatives on their own will have to change

- the management will have to change their representatives

Which one would be easier and less painful?

Of course, the first one – the representatives will have to change – will be the easiest one. Will they? They may change only if they are informed.

But who will bell the cat – by telling the representatives on their face to change?

It is a difficult question – but in case the good business has to succeed, may be some one down the line, will have to, and even risking their stake/job

But how many such dare devils and right thinkers and doers we have in our midst today?

Very few!

Well. The only way things can change for the better – either the population of our ‘representatives’ should go down or the population of daredevils, right thinkers and doers down the line should go up

Let us pray for any one of the above options!

For the sake of good businesses to succeed!

Thank you!