- September 4, 2018
- Posted by: track-admin
- Categories: Entrepreneurship, Leadership
Thinking back in time, one may think of many brands that were an integral part of their childhood but their name no longer exists in the market. What is the reason that something so popular in the 90’s or early 2000’s has no existence now? One may pause to think and contemplate that those companies who made it on the list of fortune 500 firms no longer exists!
No doubt luck is an important player for any business, but not the ultimate factor. Businesses that remained afloat after many decades have managed to do so with quick and efficient decision making, as well as taken calculated risks for the betterment of their company.
What are those decision making mistakes that the unsuccessful companies made, which led to their fall from power? The most important 4 decision making mistakes which should be avoided to keep a thriving business are:
Failure to anticipate
If one is in a business and assumes customer likes and dislikes to stay stagnant as well all the other competitors to not modernise; then they are at a serious loss. A business is ever changing and their mission should always be to improve their product and selling process for their customer. If they continue to give the customer the same thing that they have since the last decade, bankruptcy is their ultimate destination.
A great example of this would be Yahoo who was an advertising giant back in 2005. However, they focused on becoming a media giant and not improving customer search experience. Moreover, they backed out of their deal to buy Google in 2002 as well as lowered their offer to buy Facebook leading the deal to not happen. The poor decisions, as well as failure to anticipate customer trends, led Yahoo to be a faint memory in the minds of millennial.
Failure to adapt
Many businesses do not believe or are to risk averse to change their business model. They can strengthen or tweak their strategy and business model but not venture into any unknown albeit related field of business. This also serves as a ground for downfall of a business.
The perfect example for this mistake may just be Nokia, who was the global leader of in the early 2000’s. Other companies who may not be as successful as Nokia identified the onset of internet, technology and data as the future form of communication. However, Nokia still continued to focus on hardware instead of software as it did not want to alienate the chain of loyal customer base that it had.
With 2007 marking the arrival of iPhone which was literally a game changer in the mobile market; Nokia soon began to lose customers. It tried to stay afloat by finally adapting to customer needs and wants but its products were not competitive enough and were weighed down with poor user interface and operating system.
Failure to learn
Some businesses do recognize the new technology trends coming in the market but do not adapt at the right time. However, some businesses simply ignore any upcoming trends and choose to stay under the hood letting their business continue as it is on auto pilot mode. This mistake in present times would lead to instant death of any business. With technology revolution taking over every single business process, one must be up to date with every new, upcoming trend and use it for the betterment of their business.
An example of one of the world’s largest losses due to failure to learn may be General Motors. Once an automobile manufacturer giant from 1932 to 2007; General Motors chose to ignore competition and only focus on profits. They did not invest in new technologies that could have improved the quality of their products and brought it up to par with customer expectations.
Failure to execute
This poor decision making mistake comes with delayed decisions or not making the right decision at the right time due to concern about risks, market acceptance, finances, etc. In today’s powerful times, even a split second delay in executing the right decision can cost the company millions of dollars’ worth of business. With technology evolving so fast, one always has to be on their toes to keep astride with ever evolving new trends.
An example of this mistake would be Kodak, which has special memories for everyone in the 20th century. It was a leader in the photography film market but lost all market share due to the evolution of digital photography. Although Kodak even invented the first digital camera but the leaders hushed it up thinking that digital photography would be disruptive for their market and their films would not sell! Kodak was so focused on its film market that it failed to execute the idea for which they could have been pioneers! In contrast, Fujifilm went from the photography market to developing films for LCD panels in televisions and managed to stay afloat whereas Kodak went bankrupt in 2012.
These examples from the top brands of their times are clear proofs how important decision-making is; that too the right decision at the right time.