Sooner or later, your business will probably die.
The statistics for a start-up business are well known—50 percent fail within the first five years. Even the biggest companies are not immune from eventual obsolescence, however. The average life span of a Fortune 500 company is only 40 to 50 years.
Richard Foster from the Yale School of Management found that the average lifespan of an S&P 500 company has dropped from 67 years in the 1920’s to 15 years today. He also projects that 75 percent of the S&P 500 companies will be replaced by the year 2027.
While it is rare, government agencies are at risk to be eliminated or radically altered, too. For instance, the Sunset Review process in the State of Texas has eliminated 37 agencies and consolidated an additional 46 since 1977. You wouldn’t call that fast-paced change, but it can happen.
Let’s assume that you have made it through the start-up phase. Your downfall at this point could come from a catastrophic event. More likely however, you will collapse under the weight of many small mistakes that take their eventual toll.
Every organization occasionally shoots itself in the foot. The best don’t continually reload the gun. Here are three ways you might be setting yourself up to go from good to gone.
- Becoming complacent.
Complacency is the enemy of continuous improvement, innovation, and change. It occurs when people start assuming that being good today automatically translates into success 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 showing people a better future and then contrasting that with today’s reality.
- Not being intentional about your culture.
A compelling culture is the intangible that separates you from your competitors in a world where products and services are basically interchangeable. It 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.
Or ... it doesn’t.
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 number of leaders who don’t at least acknowledge the need to develop and retain talent is shrinking, but a gap between intention and action remains. 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 puts you on the path to go from good to gone.
Randy Pennington is a business performance expert, award-winning author and speaker, and leading authority on leadership, culture, and change. Through his engaging articles, books, and presentations, Randy teaches companies and associations how to make change work within their organization; achieve positive results; effectively lead through transformation efforts; and build a strong organizational culture to safeguard success.