From Boardroom to Bankruptcy: How Bad Decisions Wipe Out Companies
What Mid-Sized Businesses Fail to Do: The Cost of Neglecting Growth, Innovation, and Long-Term Success
Imagine your business as a meticulously engineered car poised at the starting line of the Goodwood race track.
Whether you're competing in a classic car rally or a high-speed supercar event, the journey to this point has demanded significant investment of time, money, effort, creativity, innovation, and teamwork. Just as in all motorsports—be it the Paris-Dakar Rally, Le Mans, or Formula 1—victory is unattainable without relentless dedication and continuous fine-tuning.
Anyone who follows F1 is aware that Redbull, McLaren and Mercedes are all in constant battle and this year has had its surprises too (with Redbull being knocked from its lofty heights recently)………but that is a debate for another time, I digress! Imagine you’re at the starting line of a high-stakes race. The competition is fierce!
Much like in F1, in business there is a constant jostle for the top spot! The preverbial engines roar, and the business innovators and disrupters are lined up, ready to take off. They are more agile, less stuck on old school ideas and looking to constantly shake things up! Even when considering the 'magnificent 7' - they are driving significant market growth "driven by technological innovation, market dominance, financial performance, brand equity, research and development, and global economic conditions." (Investopedia) Obvious, but these businesses stay as the megoliths they are due to constant investment, innovation and strikes away from their known base!
The Pursuit of Perfection: Continuous Improvement
In racing, unforeseen challenges are inevitable: engines misfire, clutches stick, fuel injectors clog, or tires underperform. Each setback requires diligent tinkering to optimize performance. While absolute perfection may be elusive, each triumph brings you closer to an ideal setup. Reflecting on these experiences often reveals areas for further enhancement.
In the business realm, this philosophy mirrors the principles of the Gibbs Reflective Cycle, encouraging organizations to evaluate events, meetings, reviews, performance metrics, and communication strategies. Regular transformation is essential to adapt to external factors, innovations, and technological advancements.
The Human Engine: Investing in People
Beyond mechanical components, the human element is paramount. Identifying the right coach or consultant—your "David Schumacher" leading the team to success or your top engineer fine-tuning the engine—is crucial. This encompasses not only the core mechanics but also the oil, tires, handling, seat comfort, and interior design—the holistic user experience.
However, businesses often grapple with justifying investments in what might be perceived as "soft" aspects. Yet, data underscores their tangible impact.
For instance, companies with best-in-class cultures are 72% more likely to invest in leadership training compared to others (67% vs. 39%) Arbinger
Moreover, 88% of employees believe a strong company culture is key to business success. Built In
Yet, many mid-sized businesses roll up to the starting line unprepared, failing to invest in the critical components that ensure long-term success.
Whether you’re in the race for market dominance or steady growth, too many businesses make the same costly mistakes—neglecting innovation, failing to develop leadership, and resisting transformation until it’s too late.
Too often it is stories of scaling fast and not building in culture, vision, values, optimised processes, platforms and structures as you go along. Its basic mistakes like not listening to the opinions of those in your team at the coal face - they often have the best innovation ideas as well as savings!
Or maybe its complacency, arrogance and ego - all just popping up and saying - hi - Im the HIPPO* here so don’t even bother to speak up! = the decision bias !
1. Ignoring the Need for Continuous Tuning
In racing, a car that isn’t continuously optimized will inevitably fall behind. The same applies to businesses. Many mid-sized companies get comfortable with their existing processes and fail to fine-tune their strategies. They overlook inefficiencies, fail to assess their market positioning regularly, and refuse to evolve with new technologies and customer demands. Without regular refinement, even the strongest business engines begin to misfire.
2. Underestimating the Importance of Leadership Development
Would a top racing team put an untrained driver behind the wheel? Stupid question!? Yet, many companies promote employees into leadership roles without equipping them with the necessary skills. Leadership isn’t just about managing tasks; it’s about inspiring teams, navigating challenges, and driving sustainable success. Research shows that companies investing in leadership development see a 22% increase in productivity (Deloitte Insights). Yet, so often, leadership training is seen as a ‘nice-to-have’ rather than a necessity
3. Failing to Invest in People and Culture
A finely tuned engine is useless without the right fuel. Similarly, businesses that neglect their workplace culture and employee engagement struggle to perform. Studies show that businesses with strong cultures are up to 60% more valuable than those without (Harvard Business Review). Yet, many mid-sized businesses dismiss culture initiatives as ‘soft’ expenses, ignoring the direct impact on retention, collaboration, and innovation
4. Resisting External Expertise
Even the best F1 teams rely on expert engineers and strategists to maintain peak performance. Yet, many mid-sized businesses hesitate to bring in external consultants or coaches, fearing the cost or believing they should have all the answers in-house. The reality? Companies that work with independent consultants see improved efficiency, better strategic decision-making, and faster problem resolution. According to the International Coaching Federation, businesses that invest in coaching see an ROI of 7x their initial investment (ICF Report).
5. Viewing Change as a Threat, Not an Opportunity
Markets shift, customer expectations evolve, and new technologies emerge—yet many mid-sized businesses cling to the status quo, fearing change rather than embracing it. Instead of proactively adapting, they wait until crisis forces their hand. The signals are always there! People leave, toxic culture beds in, little management and leadership skills training is provided, and innovation dies! The best companies continuously analyze trends, experiment with new approaches, and stay ahead of disruption. Those who don’t? They risk obsolescence.
The Solution: Investing in Long-Term Success
The businesses that consistently win aren’t just lucky; they are strategic. They invest in leadership, culture, innovation, and external expertise to fine-tune their operations and stay competitive. CXOs and decision-makers must recognize that growth isn’t accidental—it’s engineered.
*HIPPO - Highest Paid Person’s Opinion.
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