In today’s business marketplace, many businesses come and go. When a business fails, or finds itself in troubled waters, the question often asked is: Why did the CEO fail?
There is a universal, common factor as to why so many CEOs fail: They don’t understand what business they are in.
You see, it’s not the obvious answer one would think it to be. So let’s take a closer look at 3 reasons why CEOs fail and how they contribute to a company’s success – or failure.
- Every company, whether it’s a startup or a corporation, is in the people business. Business is about people. Whether its employees, customers or vendors, without people there isn’t any business. Otherwise, how do you make any money; or a profit? Without people your company ceases to exist. That’s why you need to understand people and how to effectively communicate with them.
- Every company, regardless of industry, is in the prospecting, sales and marketing business. Sales are everything. To get the desired amount of sales you have to prospect and market your business every day. You must have a consistent plan of action. Then strategically execute your plan daily. This is one of the biggest failures CEOs, founders and business owners make with their company – not prospecting and marketing enough to get the necessary sales. Your company may produce software or manufacture widgets, for example, but your company really needs to be a sales organization first. That’s why you can’t sit behind your desk and wait for sales to come in. As the leader of your company you need to understand sales and marketing. It’s important to know when you need to work side-by-side with your employees and meet with your customers. Too often when sales pick up at a company and there’s more than enough work to do, the prospecting and marketing is put to the side. Then one day, the business dries up and the company is in trouble. Prospecting is hard work. It’s probably the least favorite thing business people like to do. But it’s necessary in order to sustain your company and its goals.
- Your company’s product or service is what it is. The product or service your company provides is important. BUT as the CEO, founder or business owner if you are not successful at the first and second points listed then you’re not going to be successful on a long term basis with your product or service. You need to be a student of your business. Always paying attention to the business. Not accepting excuses from yourself or others. When you observe or experience failure ask: Why? Study the failure, yours or of your competitor. Don’t allow failures to happen twice as it could cost you significant business – and profits.
In most cases, it’s not the company that failed. It’s the leadership. Leaders lead. Lead your company in the right direction for profit and success.