Why businesses fail

By Newsday | Jun. 29, 2014

THIS week’s contribution seeks to conclude the topic which was unveiled last week on the importance of a firm’s vision and mission statement.

The pertinent question that must be answered is why businesses which promised to be future hit predictions in the past have fail dismally.

How does a firm or business with an excellent mission statement flounder and drown in the choppy water of economic downturn? How can one connect ideas and thoughts with practical action?

The mere existence of a mission statement and a company vision which is as bright as the Milky Way galaxy does not guarantee success. There are many homes with good gardening books yet their yards are suffocating with weeds.

Similarly there are many households that boast libraries of recipe books yet meals that are prepared by their members are lousy to say the least. To guarantee success and run faithfully with a vision the company ought to have managers and executives that marry theory to practice.

There are basically four cardinal qualities and four cardinal resources that are fundamental to enlivening a firm’s vision and achieve a company’s mission.

The four cardinal qualities that all company executives or all leaders ought to possess so as to successfully pursue a vision are integrity, diligence, humility and creativity. The resources that a firm or an organisation must have to achieve its goals are workers, customers, products and reliable sources of funding. Integrity There are many companies which could have disappeared in the past if their leaders did not have integrity. Take for instance banks in Zimbabwe from 2004 to 2008, many of them if not all of them were under serious temptations to engage in fictitious or cosmetic accounting techniques whilst siphoning depositor funds to illicit or misguided business ventures.

Those banks that yielded to such temptation are now the material that makes the annals of history while those banks that believe that success comes one step at a time not like cherries falling from a tree, exist to this day.

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Integrity implies being true to one’s cherished personal values and principles and refusing to sacrifice them on the altar of short term gain at any given point in time. The corruption which is endemic in our generation does not start from the top to bottom of society or from the lowest social stratum to the highest social grouping. When corruption is interrogated as a psycho-social problem it is found germinating from a deceived human heart.

The corruption we see manifesting openly in society is an internal human problem of integrity deficiency. The question is what erodes integrity? Integrity is undermined by a culture of recklessness among those who hold strategic positions in society. It is the belief of this article that unless schools and other institutions of learning deliberately teach about the essence and importance of integrity, our society will suffer from a scarcity of leaders with this important attribute. Diligence Diligence may be interpreted as hard or smart work or tenacity even in the face of the temptation to give up. A true leader who genuinely desires to fulfil the mission of his or her company never gives up. It is only quitters who live to tell the tale as losers.

Winners never quit.

They hang onto what they believe in until they have convinced their world to believe in what they are doing to make society a better place. Most firms or organisations that fail either lack executives with an indefatigable zeal to see them succeed or they are populated with dead wood that has attained the proverbial plateau and are thus suffering from burn-out.

Diligence is to be distinguished from mere effort or activity because when one is diligent this speaks of focus and a burning desire to achieve certain goals.

Humility Humility refers to the ability to realise that even if one was the tallest person on earth, one’s height is still a far cry from reaching the sky. A humble disposition also implies realising that success is never an individual experience (though it may be celebrated by individuals as if it is such). Genuine success is always a communal experience.

A leader/entrepreneur (and the firm they lead) is on the road to guaranteed failure the moment he or she starts nursing warped ideas of one’s indispensability or one’s superlative wisdom.

It is only providence that is ultimate; all of humanity is searching for meaning and space in the modern world.

A humble leader knows that though he or she may be talented and even capable of multi-tasking, he or she needs the wisdom, knowledge and guidance of others. All successful companies such as Stanchart, Adidas, Sony, LG, Coca-Cola, CNN and Econet have visionaries/leaders that believe in the potential of others to duplicate them and reproduce (if not better) the skills and competencies that they possess.

Modern society which is characterised by a nearly free flow of information requires leaders who are capable of leading from the front, the middle and the back. Successful business leadership has very little to do with the position that one occupies. Business leadership has a lot to do with synchronising one’s skills and abilities with those of others. Creativity All companies that exist are actually manifestations of the intangible yet timeless ideas of their sponsors. Sustained creativity is the life-blood of a business that will continue to exist long after the death of its founders.

Creativity harnesses the best from employers and employees alike and shuns the archaic philosophy of one class of people using or exploiting others. The creative instinct in any living person can only be stimulated and sustained by distributing justly and honestly the proceeds of a firm’s success.  Ian Ndlovu is an economist based at the National University of Science and Technology skilled in data analysis using SPSS, Gretl, Stata, Eviews and Microsoft Excel software packages. His research interests cover business, development, economic and e-commerce issues. He writes in his personal capacity.