Your business will probably not last forever.
Fifty percent of start-up businesses fail within the first five years. The average lifespan of a Fortune 500 company is only 40 to 50 years. S&P 500 companies stuck around for an average of 67 years in the 1920’s. Today they last an average of 15 years. Richard Foster from the Yale School of Management predicts that 75 percent of today’s S&P 500 will be replaced by 2027.
While it is rare, even government agencies can be eliminated or radically altered. The Sunset Review process in the State of Texas has eliminated 37 agencies and consolidated an additional 46 since 1977. You wouldn’t confuse that with fast-paced change, but it happens.
Let’s assume that your business has made it through the start-up phase. Your downfall at this point could come from a catastrophic event. More likely however, you will sabotage your long-term success by repeated small mistakes that take their eventual toll. Here are three that you must avoid.
Complacency is the enemy of continuous improvement, innovation, and change. It occurs when people start assuming that being successful today automatically translates into relevance tomorrow.
You fight complacency with urgency. For most leaders, that means focusing on a crisis. Crisis works, and you shouldn’t waste one if it is present.
Increasingly however, crisis is not the best long-term strategy for maintaining a sense of urgency. There is a natural tendency to relax when the crisis has been averted. Operating in a perpetual state of crisis wreaks havoc with the energy of your team. Plus, moving from crisis to crisis means that you are always playing catch up and never distinguishing yourself as the market leader.
The better alternative for generating urgency is a compelling vision that challenges everyone to continually be better tomorrow than they are today. You accomplish that by continually showing people a better future and then contrasting that with today’s reality. A powerful customer-focused vision pulls your team to continued greatness when it is contrasted with today’s reality.
Not being intentional about your culture.
In today’s marketplace, products and services are – or quickly become – interchangeable. Your only sustainable competitive advantage is an intangible – a culture that attracts and engages top talent that values the opportunity to help you succeed.
A compelling culture enables the discretionary effort that allows you to move faster and run further. It empowers action to anticipate and solve problems at the lowest possible level. It makes people feel valued and keeps them engaged.
A culture that doesn’t engage, inspire, and enable continued greatness dooms you to eventual mediocrity.
Now is the time to identify the habits that need to be displayed at every level of your organization and compare them with what will be necessary going forward.
Your company has a culture today. Will that culture strengthen your ability to flourish in the future? Most important, what are you intentionally doing to either change or sustain it?
Ignoring talent development and retention.
The good news is that leaders recognize the need to develop and retain top talent. The bad news is that there is still a gap between intention and actin.
It is easy to understand why. Developing and retaining talent requires an investment of time, energy, and resources. It means that mangers must focus on the future while producing in the here and now. There is also the chance that you invest in developing your people and they leave.
Here is the reality: Your ability to grow and improve in your business is in direct proportion to the talent available and committed to helping you get there. The risk that talented people will leave is much less than the impact of poor performers staying with you. If developing and retaining talent isn’t a priority, you are destined for mediocrity, and that is a recipe for extinction.
Mastering the fundamentals is the minimum to stay relevant in the marketplace. Today, that includes overcoming complacency, being intentional with your culture, and focusing on developing and retaining talent. Anything else sabotages your long-term success.
Randy Pennington is an award-winning author, speaker, and leading authority on helping organizations achieve positive results in a world of accelerating change. To bring Randy to your organization or event, visit www.penningtongroup.com , email firstname.lastname@example.org, or call 972.980.9857.