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In the Comments section below, tell us about the biggest mistake you think a leader can make during sluggish economic times. On March 31, we will choose five winners to receive a copy of Gary Vaynerchuk's newest book about social-media strategy. Contest details.
Now that we’re basking in the glow of economic recovery, let's assess where we've been, the mistakes we've made, and how to prepare for the next burst of growth. You'll want to avoid these whoppers, or quickly course-correct if you've made them. Note: I've made them all, so you're among friends!
1. Hasty Hiring.
Result: Bad hires who are costly and time consuming.
When you’re overwhelmed and overworked, it’s easy to make hiring mistakes. That’s why relying on contractors is a great policy. Check out sites like TaskRabbit, Assistant Match, or Marketing Sherpa for administrative, bookkeeping, virtual marketing, and other help. Rates can be surprisingly low. Have a lean team, and hire extra hands for the heavier times. Try out your team members as contractors first. Then, once they click with your team and share your values, bring them on as permanent hires.
2. Not Watching Your Profit.
Result: Financial pressure due to propping up ailing products, divisions, and accounts.
Sometimes you can sell your way out of a recession, yet at all times you need to streamline expenses and adjust your financial strategy. One of our clients recently outsourced an entire division of their company. It hadn’t been profitable, and the other divisions were supporting it financially. Yes, the decision was painful and resulted in a lay off. Yet it had to happen for the health of the company. The outsourced division now generates a healthy profit.
Another client pays increased commission for selling higher margin products. We laid out a compelling plan, and the sales force is now focused on the products that are best for the company’s bottom line, and coincidentally, best for the customer.
3. Chasing All Sales Leads.
Result: Wasting time on “prospects” who will not become clients.
A CEO of a consulting company complained recently that she had chased a key account for four months. Four months! She finally lost hope that they would ever become a client. When asked if she had a disqualification process, she hesitated. Create a disqualification process so you only spend time with real prospects. In tough economic times especially, you must focus your energies on productive revenue streams.
4. Skipping the Six-Month Plan.
Result: “Strategy of the second” and very little accomplished.
It’s better to map out the next six months, and if a new project comes up, swap it out with one of equal complexity that is already on your plan. Entrepreneurial leaders can be excessive idea generators. With a six-month plan, you will have mapped out the projects for the immediate, foreseeable future and can skillfully avoid manic distractions with poor results.
Consider the perils of one company, with the painful “strategy of the second” plan. Each time its mercurial CEO returned from a conference, he’d have a new idea. Were they good ones? Often. But his already stretched staff had no spare energy. Since they had not learned to communicate clearly with one another, they would take on the new project, but all sorts of key tasks would (of course) get dropped or delayed, and no one was happy.
Ultimately, you need a gatekeeper for the six-month plan if you want your company to run efficiently. This is someone who will ensure the new projects are either scheduled later or will replace existing project(s) of equal size. Someone who will constantly see the big picture, tackle the small details, and facilitate real results every step of the way is crucial.
By the way, once the CEO in question put a six-month plan in place, his staff was happier, fewer tasks were dropped, and their revenue ramped up considerably.
We have all made mistakes in business. The point is to course-correct constantly. Spot a mistake, and take action to correct it. What are you grappling with right now? What mistakes did I miss mentioning?