I was recently working with a mid-sized business owner/CEO who wanted to know if I think we’re headed for a recession or if what he’s hearing on his favorite news show isn’t true, and I said…
They looked at me and it was quiet for a few seconds, and I said, can you open up to a discussion? They said absolutely! I said, “Is the #1 thing on your mind that we really need to talk about?” The man looked away, took a deep breath and said: “I’m really stuck deciding where to prioritize my organization because of all the uncertainty I’m hearing.” Then they bounced around several ideas, all of which seemed like great ideas to grow, and the guy was very excited and passionate about all of them. They share all the risks of moving, but they know they need it.
Sound familiar? It led us down a very different path, which ultimately uncovered what many leaders struggle with when there is so much uncertainty.
When it comes to small and medium business owners/CEOs, there are generally three reasons that lead to them stalling in their growth.
Reasons why CEOs get stuck in their businesses
A. They become paralyzed and work to rationalize why they didn’t change what they should have done, knowing they needed to. “I’m too busy,” “Do you know how hard it is to find good help,” “I’m still working on quantifying the market,” “I think this or that,” “Do I invest, withdraw and ride it out and hope for the best?”
B. They don’t know where/how to start or don’t stick with what they know. This often explains why they use the above phrases as excuses for not moving forward.
C. FOMO (fear of missing out). If they prioritize, they lose something else so they keep all options open and see what happens.
The problem with the above three reasons is that they risk creating financial, operational and emotional problems that can eventually bring down the company and result in employees losing their jobs.
The Costs of CEO Negligence: Financial, Operational & Emotional
When CEOs fail to address their reasons for being stuck, a lot can go wrong. Financially and operationally, there is a decline in potential revenue and profits, market share losses and higher costs. Without a clear vision and an effective communication plan, psychological well-being will decrease, stress will increase, trust will decrease, and anxiety will prevail.
Fact: The #1 mistake small and medium business owners make in uncertain times is failing to adapt quickly enough to changes in market or consumer behavior.
This manifests itself in a few different ways:
According to the status quo: Some business owners are reluctant to change their business models or processes, even when it becomes clear that the old way of doing things is no longer effective.
Sticking to known methods or routines: Usually, with fear of the unknown, business suffers.
Cutting too many corners: Conversely, other business owners may panic and overreact to uncertain situations.
Trying to save money in the wrong places: They may lay off many employees, cut marketing and advertising budgets, or stop investing in new products or services altogether.
Failed to communicate effectively: In times of uncertainty, it is important for business owners to communicate clearly and frequently with employees, customers and other stakeholders.
Hesitation to share bad news or admit uncertainty: Holding back the truth leads to confusion, mistrust and frustration.
Overcommunicating: Sharing too much or too vaguely can also create confusion and uncertainty.
The above decisions may provide some immediate relief, but they can damage the long-term health of the business.
How CEOs can correctly assess business opportunities & challenges
Here are ideas on how to assess the various opportunities and challenges you face:
- Conduct a risk assessment: A risk assessment helps you identify potential risks and opportunities that may affect your business. You can do this by analyzing your business processes, reviewing your financial statements, identifying potential legal or regulatory issues, and assessing your competition. Once you identify these risks, you can prioritize them based on their likelihood and potential impact on your business. Strengthen your current business foundation first!
- Develop a strategic plan: A strategic plan helps you prioritize opportunities in line with your business goals and objectives. This plan should outline the steps you will take to achieve your goals, including the resources needed and timelines for completion. By prioritizing your prospects, you can focus on those that have the most potential to drive growth and profitability.
- Seek expert advice: As a business owner/CEO, you may not have all the skills necessary to identify and prioritize risks and opportunities. Seeking advice from experts such as consultants, lawyers, accountants or industry peers can provide valuable insights and help you prioritize your risks and opportunities effectively. Joining peer advisory groups to bring outside perspectives in a confidential/safe space can confirm your decisions, catch risks you may not have seen, and/or give you new ideas to consider.
In summary, it is important to have a solid business foundation before proceeding with new products or services, as it provides them with a clear understanding of the market and financial stability, operational efficiency, risk management and strategic planning capabilities.
Overall, small/medium business owners need to prioritize to effectively manage their workload and achieve their goals. It is important to identify any obstacles to prioritization and work to overcome them to ensure that tasks are completed in a timely and efficient manner.
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