A lot of businesses fail because of a myriad of reasons; the loss of your market share because of a competitor, poor investor relations, and there are even instances where an idea has lost its profitability altogether. However, apart from the external factors that could cause a business a premature end to its life cycle, a business can already have been being set to fail internally.
- Hiring the wrong people
This is a definite no-brainer. Human resources are one of the most dynamic resources in any company and hiring the wrong people can lead to several problems down the line. In fact, the U.S. Department of Labor reports that a bad hire costs the company 30 percent of that particular employee’s potential salary.
- Underpaying Your Staff
Hiring the right people is already a challenge in itself and keeping rising stars is often a priority for growing companies that want the best manpower available to grow and expand. However, the biggest mistake that a budding entrepreneur or business owner can do is to underpay their staff.
To underpay is tantamount to creating an environment for dissatisfaction not only for the employee in question but also for the rest of your team. Not only does an employer come off as someone who does not appreciate their team members, but it is also wasteful for a company to have a high turnover rate – think about wasted resources in training etc.
- Not Being Able To Distinguish TheCreatives from the Analysts
It has been said that there are two sides to the human brain, a hemisphere that deals with the creative and a hemisphere that deals with analysis. People are also usually labeled as either creative or analytical, sometimes a little both.
It is understandable that even doing what you love involves a lot of grunt work, but it isn’t an excuse for your HR team or you as an entrepreneur being unable to distinguish a creative from an analyst. Misaligning either one can result in boredom and inefficiencies. One must be able to determine who can come up with graphic designs or manage your entire business plan. In addition to this, you can further maximize your team’s performance if they’re motivated, knowledgeable and well-aligned.
- Overpaying Incompetence
Overpaying incompetence is self-explanatory.
However, it does come with certain caveats, sometimes in order to properly motivate an employee, one must find the balance between “too much” and “too cheap.” It allows them to fix their eyes on a certain prize monetarily, but still be able to feel like their salaries are not being skimped on.
- The Wrong HR Team
This happens more frequently than we expect. Sometimes the HR department cannot even connect with employees, rendering any sort of relationship with them impossible.
- The Right HR Team That Doesn’t Know What They’re Doing
Here’s an exact opposite situation, your HR team can be the most creative people in their industry and they could even be in amicable relationships with every single person on your payroll. However, the effectiveness is still measured by how well policies are translated into the workplace environment. If they don’t know what they’re doing or if they’re implementing the wrong thing, it just won’t work.
- The Wrong Data
Data doesn’t lie. Some are oblivious to it and others attempt to disregard it, but at the end of the day, “data does not lie.” According to Tim Berners-Lee, said to be the inventor of the World Wide Web, “Data is a precious thing and will last longer than the systems themselves.”
Whatever form of management style we employ, we will never be able to assess how effective it is if we don’t have the right amounts of data. From employee feedback, post-interviews, personality profile assessment, everyone needs data to backup claims and reinforce a growing and efficient workforce.
- The Wrong Management Style
There are many management styles from Asian paternalistic, MBWA (Management By Walking Around,) autocratic and the list goes on and on. However, implementing the wrong management style for your particular service might cause the demoralization of your employees and lead to other problems down the line.
A study by Harvard Business School professors, John Kotter and James Heskett show that companies with flexible businesses cultures, considering everyone involved result in companies that have better revenue growth, 166% versus 682%.
- Refusing To Use Your Own Hands
Never be afraid to get down to the nitty-gritty with your employees, not only does it establish standards of excellence, but it is also a way to promote cooperation and a decentralized way of doing things, which in turn can boost synergy and morale.
- Not Believing Your Own Mandate
In order to lead, one must lead by example and stick to their mandates. The former governor, Paul Wellstone has stated that one should, “Never separate the life you live from the words you speak.” Which by any sense is the way many of our global leaders have been leading for thousands of years, in order to foster a movement, one must be engaged in that particular movement themselves and be able to inspire their teams.
- Your Own Detachment From Humanity
When the shift ends you have to remember that you people are human beings too like yourself, a little empathy, understanding and some heart can certainly go a long way.