Yesterday (at the time of writing this post) England made it through the first group round of Euro 2016 with a lacklustre performance against Slovakia. (Well done Wales for a great performance and coming top of the group table.)
At half-time what do you think the team managers were saying to the players? If you were the England manager what would you have said?
So let’s make this an analogy and apply it to your business. We’re half-way through the year and it is time to step back and review how the first half has gone. (Hopefully this isn’t your first review and you carried one out at the end of Q1.)
Aside from observing just how quickly the first half went, what would you review?
Of course you would check your financial status and figures such as revenue and profit actuals against your forecast and future business you expect coming through. You may also assess your lead attraction to conversion percentage, average customer value and lifespan and so on – all good metrics.
If you hit targets and are on track do you know why? It’s important that you do so that you can see how to exploit your successes and build on them. You also need to be sure that your success wasn’t down to a lucky break like winning an unexpected contract because you happened to speak to someone who needed what you were offering.
But if you didn’t hit your targets it’s even more important that you know why.
When targets are missed, most companies, large and small, will look at the tactical level and observe what did and didn’t happen. “We lost that large contract.” “Our Northern office didn’t hit targets.” “I didn’t manage to attract and convert enough leads.” “The average value of my customer was less than I thought.”
What then? Will you ask why? “Our competitor came in with a more attractive solution.” “We lost our best sales guy.” “I don’t know.” “They didn’t want all that I had to offer.”
Would you then leave it at that or would you again ask why? If you leave it at that then you won’t find the root cause and history will undoubtedly repeat itself. So, keep asking why.
Businesses that struggle and often fail do so because they don’t get right down to the root cause of the problem. If you did keep delving down, you would finally reach the ultimate cause. And if you looked for commonalities amongst these causes you would be able to narrow them down to 1 or more of only 3 possible causes.
You either didn’t create and implement the right strategy and/or you didn’t set-up the right systems and processes that would allow you to step back and focus on delivering what your customers wanted and/or the right leadership skills and attributes weren’t in place to stay on course, keep relationships strong and people motivated and inspired.
I know this might appear to be a huge leap from reasons to these 3 root causes, which is why I wrote the report, Why Most Businesses Fail, which you can download from my library of free resource.
In this report, I’ve used examples like this but have shown the logical steps that lead to these 3 root causes. I have studied many reasons behind why a business may struggle and fail and drilled down to root causes and each time the root cause has been either a lack of strategy, systems or leadership or a combination of all 3.
Read the report and see for yourself and come up with your own reasons, then follow these logical steps and you too will reach these same root causes.
So, assuming that you are going to review how the first half has gone, make sure that you keep asking why and that you drill down far enough to find out the ultimate cause for hitting or missing your targets. Only by carrying out a deep and thorough analysis can you truly diagnose the problem.
And ask yourself…
- “Is my strategy the right one and is it working?” (Do you have a strategy?)
- Am I able to step away from my business enough, and it still runs efficiently and effectively, so that I can focus on the right things? (Even a one-person, solopreneur can systemise their business to a degree and give themselves more valuable time.)
- Do I, and my people if I have them, have the leadership qualities needed to drive my business forward and hit my targets? (This includes core qualities like attitude, self-confidence, self-discipline, self-belief, and self-reliance, which are vital leadership attributes.)
If you can’t answer a definite “yes” to any of these 3 questions then at least one of these elements missing from your business will be the reason for missed targets.
And if you did hit your half-year targets make sure these 3 fundamental elements are in place so that you can continue to hit them and grow your business with certainty and control and not hope and luck.
Related posts you may have missed
Every day thousands of new businesses are formed. New entrepreneurs make that massive leap to starting their own business with feelings of excitement and trepidation as they take that first step in a long, difficult but highly rewarding journey.
Everyday a similar number of businesses close, the majority having struggled for a while and finally called it a day. Their owners doing so with feelings of despair and dread as to their future and that of their families.
The deeply sad thing about many of their businesses is that they needn’t have struggled and failed. Here’s why.
If, as a small business owner, you haven’t planned how you will manage the growth of your business, then all that will happen is that you will work longer hours, weekends and increase your stress levels. If you’re going to do this then you might be the owner of a business but really you may as well have a job.
You see, the reason I say “you may as well have a job” is because that’s essentially what you’ve got and you are not reaping the rewards of owning a business. To add insult to injury, especially if your business is still young, you’re probably working harder for less money – you’ve gone from a better-paid job to a worst paid job.
If this is the case then here’s what you need to do.
Photo credit: adil113 at Flickr