All too many companies are plagued by indecisiveness.
Indecisiveness actually reflects the decision not to make a decision. Not making a decision means embracing the status quo and rejecting the choices of what could be available, were a decision to be made. The advantages of making a decision, even if it is the wrong decision, is that one can gain feedback from the consequences of the decision and make adjustments as appropriate. But if you never make a decision you never have a chance to see what might happen and to incorporate that information into a future choice.
Indecisiveness is a mistake.
2 Shoot-from-the-Hip Decisions
Some companies employ a shoot-from-the-hip decision style.
The gunslinger of the old Wild West had to draw quickly and shoot quickly, from the hip, in response to whatever danger might come his way. Of course, certain of the legendary gunslingers were extremely strategic and calculating in how they set up their confrontations, manipulating circumstances to their maximum advantage. Others, who tended to have very short careers as gunslingers, were less anticipatory, less strategic in how they approached their confrontations, with the consequence that they had relatively few confrontations to worry about, for in a short period of time they came out on the wrong side of the shootout. By incorporating strategy, preparation and calculations into decisions, better decisions can be made.
Shoot-from-the-hip decisions can be a mistake.
3 Too-Late Decisions
Making decisions too late can have very dire consequences.
The aphorism about shutting the barn door after the horse is already out of the barn is applicable in many managerial settings. A decision properly made anticipates when the decision is needed, and then executes that decision on a timely basis. When a decision is made too late, the benefits that might have been achieved by a timely decision are lost.
Making a decision too late is a mistake.
4 Too-Soon Decisions
Just as it is inappropriate to make a decision too late, it can be inappropriate to make a decision too soon.
If a decision is made too soon, information that might later become available is not considered. A decision made too soon may motivate some people to be less focused and less concentrated than they might be, were the decision resolution still uncertain. While in some instances certainty can be a positive, in others, it can be a negative, as the benefits of uncertainty are inevitably sacrificed.
Making decisions too soon is a mistake.
5 Ignoring Strategic Significance of Key Provisions of
Although contracts necessarily and appropriately are the domain of legal counsel, contracts also have strategic significance.
To ignore the strategic implications of a contract—what its provisions make possible or constrain—can be a major mistake. A contract needs to be evaluated not just in terms of legal criteria, but also, and especially, in terms of strategic criteria. Contracts effectively specify what the company can do and what it cannot do.
To ignore the strategic significance of key provisions of a contract is a mistake.
6 Failing to Have the Right Business Model
If the company does not have the right business model, its prospects for success are meaningfully compromised.
The company’s business model can be thought of as a collection of the “hows”—of how the company does business, how it interacts with customers, how it produces the goods and services it sells, and how it organizes and coordinates the relationships among the different stakeholders. Having the right business model is fundamental to business success. If you have the right business model, you have a good chance to be successful. If you have the wrong business model, success is a long-odds proposition.
It is a mistake to have the wrong business model.
7 Fixed Rigid Business Model
Every business operates with a business model. If the business model is right for the times, the company may achieve great success. If it is not, the company will not.
As important as it is to get the business model right, it is also important to realize that the business model should be dynamic. To the extent the company’s resources change, a new business model may be appropriate. To the extent that competitors implement new ways of doing business, a new business model may be appropriate. To the extent that customers have changing expectations and resources, a new business model may be needed.
To stick unvaryingly to the same business model can be a mistake.
8 Refusing to Reassess the Business Model
If you have the right business model over time, your odds of success are much greater than if you do not.
Up until the time of the personal computer revolution, IBM dominated the information technology business because of its insistence on a proprietary environment for its computer systems. Once you bought into the IBM product line, you had few options to do business with anyone else. The decision to go with IBM also meant you had essentially agreed to be subjected to IBM’s virtual monopoly on your future options. But when the personal computer innovation revolutionized information technology, insistence on the proprietary system became a liability. By aggressively moving away from that business
model and embracing an open architecture standard technologies approach, IBM reemerged as a dominant technology player.
To refuse to revise your business model can be a mistake.
9 No Contingency Plan
Astute companies operate with contingency plans.
A contingency plan anticipates what could go wrong and provides for appropriate responses to what can go wrong. Effective contingency planning follows from the maxim to expect the best, but plan for the worst. If you do not have a contingency plan when something goes wrong, you may not be in a position to respond. Without a contingency plan, you could be stuck in a very awkward, inappropriate, expensive and embarrassing place.
Not having a contingency plan is a mistake.
10 No Answer to “What’s Next?” Question
Fundamental in business is thinking about how to answer the question “What’s next?”
The “What’s next?” question is important in many ways. Customers want to know what you’re going to do for them next. If you don’t think about what you’re going to do for the customers next, you will not be well positioned to provide an effective, responsive, helpful answer to the customer’s “What’s next?” question. You will not meet the customer’s needs. Even if you come up with some off-the-cuff, impromptu answer, you will not be in a position to deliver effectively on that answer, because you have not thought through sufficiently what you need to do to have an effective response to the
“What’s next?” question.
Unless you prepare to have a good answer to the “What’s next?” question, you are
making a mistake.
Stay Tuned!! coming up we will talk more about Operating Philosophies Mistakes