I think business failure boils down to one root cause: POOR DECISIONS.
Here are some of the common reasons business fail, selected from a variety of sources:
- Not taking care of customers: is really just a series of bad decisions
- Running out of money: another set of poor decisions
- Not pivoting properly: bad decisions written all over that
- Poor planning: bad decisions to not plan is the real culprit
- Inadequate financial management: more bad decisions to neglect
- Failure to innovate: decisions were made to not innovate
- Customer concentration: this was a series of conscious decisions
- Natural disaster: we can't even pass all of the blame on this one, especially since some decisions can be made to minimize the impact a natural disaster can have on a business
- Recession: if we stop and think about this one, we'll realize we could have done a lot to minimize the impact of the recession on our businesses.
So, if poor decisions is the root cause of business failure, how can decision-making be improved? In my recent article on American Express OPEN Forum, I explain how the Proper Use of Numbers Can Improve Decision-Making and give businesses the best chance for success.
1. Take responsibility for your failures and successes, don't point fingers of blame.
2. Evaluate your decision-making process and find ways to make it as successful as possible with the right numbers in the right format in the right context at the right time in the hands of the right people.