As the end of 2018 approaches and we face a new year filled with hope and opportunity, many of us take time during the Christmas break to take stock of our successes and planned improvements for 2019.
And while I love the concept of taking the learnings and leaving the emotions behind for those areas of my life that didn’t quite go to plan, for some, especially those who have put their blood sweat and tears into business only for it to go belly up, leaving those emotions behind isn’t that easy, especially when we brand those learning opportunities as failures.
I found it interesting that research collected by the Australian Centre for Business Growth found the main reasons for Australian SME’s failing was due to a lack of leadership by the CEO, poor planning, insufficient market research and sales skills, mismanagement of financials, underestimating the impact of market conditions and poor governance structures. (Take a look at their article here).
It made me wonder whether CEOs are wearing too many hats (founder/owner/CEO/chief bottle washer) or whether the hats they wear just don’t fit them properly. That might be in the form of managing tasks they didn’t have the knowledge, skills and experience for in order to do the job effectively. Or maybe they’re stuck doing tasks that need to be done adequately enough, but they’re lacking in drive and passion to really kick that part of their business up the notch it needs.
For me, each of the failure areas above, are all key fundament components of effective governance structures or frameworks and this skillset is rarely valued until something significant occurs within the business environment.
How the CEO operates and manages, or better still, leads the business is a fundamental component of good governance and, as Dr Matthews indicates in the article, “they need to ensure good governance and alignment, and create a learning organisation and when these leaders do not understand or fulfil such responsibilities, companies fail to grow and sometimes fail completely”.
Right-sized governance in any business is critically important. It not only facilitates accountability and transparency, it also instils trust and confidence, provides protections and improves overall business performance. Of course, as with all things, there isn’t anyone ‘one size fits all’ approach to governance – each company varies in size, culture, complexity and dimension. And what’s right in the early days of a business’ life might be completely different to what’s needed say 10 or 20 years on.
Failure is such a harsh word and it can have harsh consequences. No-one likes failure and fewer want to actually face it. So if success is what you’re planning for as you to move towards 2019, consider what oversight your operations have, how you’re managing it and how effective the governance frameworks are in your organisation.
And that’s where we can help. If you’d like a review of your organisation’s governance or you’ve got something that’s just not coming together in your organisation as you’d like it to, we’d love to chat. You can call Lisa on 0418 218 157.