Start-ups and SMEs are failing because owners aren’t asking their business the right questions
Five ways to learn from your business and avoid repeating the same mistakes
SME’s account for at least 99% of the businesses in every main industry,1 yet 55% will fail to make their fifth birthday2. These are depressing statistics, but imagine what the future would look like if the business leadership team could always learn from its mistakes. A business will tell you everything that is going on, but only if you ask the right questions. A growing business is an evolving, dynamic entity that has ALL of the answers; getting stuck in the day-to-day and in a ‘we’ve always done it this way’ mind-set will block growth and limit learning potential.
It’s our experience working with entrepreneurs across 50+ sectors that business owners will feel overwhelmed and adrift in a business fog at some point; not knowing who to turn to or which way to go next. They’ll feel anxious and have many sleepless nights worrying about their business and all too often they’ll be running around like a headless chicken in a panic, reacting to ‘surprises’. Eventually the entire team will become frustrated time and time again as they repeat the same mistakes and it’s at this stage where self-doubt and disengagement creeps in.
Five ways to learn from your business and avoid repeating the same mistakes:
- Define your processes: in order to grow efficiently and scale your business, you must work out exactly what makes your business work and document the method. This includes having a clearly defined process that logs all issues (however big or small), and solves them. By noting these down, you can focus on striking them off, learning from each one, improving on it, and removing any barriers to growth.
- Set accountability: once you have a process and system for logging your issues, you need to identify the person who is accountable for each one, and the date they will be solved by. It’s important to ensure that everything and everyone who needs to be involved understands their role (and the goal). A set of progressive leadership behaviours have to be agreed and adhered to.
- Set the questions you want to ask your business and put measures in place; it pays to have a way to track progress against your defined processes and alert you to potential problems well before the alarms go off. We come across too many business owners who expect their business to magically change. They know their sales have plummeted for the third consecutive month, or that their star member is less willing than they were 6 months ago. But they don’t know why. Consider the following: why did you lose that contract? How do your staff really feel? How many of your clients are fans? By asking those questions most important to your business, on a regular basis by introducing simple tools and measures such as the Net Promoter Score®, will mean you are constantly learning and evolving and not making the same mistakes over and over again. To achieve this the business needs to follow the next step.
- Create the right environment, give the tools, get out of the way. The above will only happen if you have created the right culture and environment in your business. Those businesses that we work with who have successfully achieved this are constantly learning and refining because their teams have the will and the attitude to give and receive constructive feedback. In some ways they celebrate mistakes! These business owners aren’t constantly mopping the floor because of a leaky roof; they’ve mended the roof and moved onto the next challenge. If you don’t set the right environment then every decision you make will be an emotional one, based on short-sighted information at hand (at best).
- Get into a routine. Now you have set the right environment, you’re asking your business the right questions and you’ve got systems and processes in place, you need to embed a routine into your business. By having regular, structured meetings (same day, time, agenda) to capture, review and tick off issues, allows you to constantly learn from your business. It’s important to remember that these type of meetings are problem-solving meetings.
1 Business Population Estimates for the UK and Regions in 2015. The FSB. November 2015. http://www.fsb.org.uk/media-centre/small-business-statistics
2 The Business of Numbers. Fair Finance. February 16, 2016. https://www.fairfinance.org.uk/blog/the-business-of-numbers/