1 Failing to Employ a Structured Decision Process
Decisions made without a structured, systematic process may be less than optimal.
Business school courses, academic textbooks, and training programs concerning decision making provide structured approaches, decision models, and tips to make better decisions. The classic approach involves defining the problem, identifying alternatives, undertaking quantitative analyses and qualitative assessments, exploring the risks, and then choosing the best course of action. While a structured decision making process is central to management, too often that approach is ignored.
Failing to employ a structured decision process can be a mistake.
2 Not Understanding the Costs of Implementing a Structured
Decisions have costs.
While a structured decision making process can result in a better decision and a more cost-effective and proper use of resources, you must also consider that decision making is not free. There is cost involved in implementing the decision process itself.
If you do not understand the costs of implementing structured decision making processes, you may make a mistake.
3 Disregarding Costs of Deciding on a Managerial
Business schools, management treatises and training workshops are devoted to teaching managerial methods and decision making.
Despite all of the resources and attention devoted to teaching managerial methods, seldom is the question of the cost of implementing a management method addressed.
Most approaches to management practice seem to presume that there is no cost of implementing a particular method.
Some of the costs involved in implementing management methodologies are:
- Acquiring valuable software tools;
- Supplying training and continuing education to use software and management
- Accessing, developing, and procuring information to be utilized in the analysis of
which methodology is needed;
- Time spent in evaluating the results of the analysis to make the decision; and
- Time spent in implementing the methodology.
If you fail to consider the costs of applying different management methods, you may miscalculate, by adopting business approaches that have much greater costs than realistically recognized.
Failing to recognize the costs of employing management methods can be a mistake.
4 Unwillingness to Shift Priorities
A basic Business 101 lesson is to establish priorities and stick to them.
Students of business are taught the importance of establishing priorities and sticking to them. By determining what is most important and then doing it, superior outcomes can be achieved. However, as important as establishing and following through on priorities is, it is a mistake to resist shifting priorities when evidence of different conditions and new opportunities suggest it would be advisable to do so. Markets change, established approaches are threatened and new opportunities emerge, with the result that sticking to initial priorities can result in disappointment, if not worse.
To stick to priorities when evidence suggests it would be better to alter them can be a strategic mistake.
5 Persist in Doing What You’ve Always Done
There is a saying that if you always do what you’ve always done, you will always get what you have always gotten.
So long as you keep doing what you have always done, you will likely get the same outcomes. If those outcomes are exactly what you want—fine. But if those outcomes are in any way short of what you want, then you need to reassess whether improved outcomes would be brought about by continuing to do what you’ve always done—or whether improved outcomes might more likely be achieved by doing something different.
By doing different things and things differently, you can meaningfully improve the results you might achieve than if you just do more of the same.
To keep doing what you’ve always been doing rather than doing something new can be a mistake.
6 Lack of Executive Support for New Initiatives
When a company embarks on a new initiative, support of senior executives is critical.
Studies of what makes for successful change programs are virtually unanimous in identifying the most important factor as the commitment and support of the chief executive. If senior executives’ support is lacking, the prospects of the new initiative being successfully implemented are remote. Without senior executive support, the prospects of achieving success are much diminished.
To embark upon a new initiative without senior executive support is a mistake.
7 Failing to Confirm the Integrity of the Underlying Core
Sometimes, the excitement and appeal of heading off in a new business direction can cause leaders to lose sight of the fundamental importance of the company’s core competence.
If the company does not possess fundamental integrity and vitality in its most basic capabilities—if its core competence is somehow flawed—then the company’s capacity to achieve its objectives is inherently comprised. No amount of emphasis on new business directions can make up for defects in the company’s core competence.
Emphasizing other priorities, when the company’s core competence is compromised, can
be a mistake.
8 Not Considering How a New Venture May Impact an Existing Commitment
In strategizing a new enterprise commitment, it is important to look not just ahead but also to look back.
Why is it important to look back when strategizing a new commitment? Any new commitment must be built upon not only the foundation of the present, but also and especially the past. Prior decisions, undertakings, and commitments all influence future commitments. To plan a new undertaking without considering how prior commitments may impact that undertaking can result in disappointment, liability and damages.
To plan a new commitment without considering how that new commitment may be impacted by prior commitments can be a mistake.
9 Persisting with a Business Initiative in Light of Contrary Market Feedback
Sometimes, when expected results are not achieved, the conclusion is that more time is needed. The idea is that you can just keep working at it, and eventually results will come.
In many circumstances, that can be the outcome, but not always.
If expected results are not achieved, it is important to consider why not. It may be that some modification, adjustment and refinement are called for. Perhaps some slight change can have a dramatic impact upon the desired outcome.
To persist in doing something, without assessment or modification, can be a mistake.
9 Big Picture Blindness: Bridge Over the River Kwai Effect
Excellence in performing a given task does not necessarily mean that the task will help achieve a desired outcome or even should be performed at all.
In the Second World War, a group of British soldiers, imprisoned in a Japanese prison camp, were forced to build a bridge over the River Kwai. With admirable and typical esprit de corps and a can-do attitude, the British prisoners built a magnificent bridge.
What they did not appreciate or consider sufficiently was that the bridge they were building was intended to assist their enemy in winning the war. Focusing on the task at hand distracted them from consideration of the larger purpose.
Emphasizing the immediate task at the expense of the larger purpose can be a mistake.
10 Emphasizing Revenues Over Profits
Some companies are committed to maximizing revenues, with the idea that if revenues are high enough, profits inevitably follow. Not necessarily.
The crucial metric is business profit, the difference between revenue and expense. If one consequence of maximizing revenues is to increase expenses dramatically so that profits are diminished, the outcome may be much less satisfactory than a much smaller revenue volume with a much higher profit. The astute strategist focuses on the spread between revenues and expenses, rather than just the overall magnitude of revenue.
Emphasizing revenue at the expense of profit can be a mistake.
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