Running a company is never easy. Obstacles to success emerge almost from the outset of any commercial endeavor. Challenges arise from conditions in the marketplace, competitors’ efforts to improve their market share, consumer whims and trends, and numerous other circumstances.
While a CEO can’t control external economic or political conditions, internal factors – such as corporate debt, cash flow, employee relations, or interactions with suppliers and distributors – can be managed to an organization’s advantage. If not, these factors of daily business activity become obstacles that interfere with your success. Overcoming them is the key to improved performance and profitability.
Quality of Leadership
Quality of leadership determines an organization’s capacity for overcoming impediments to business success. A CEO’s influence stems from sources of internal corporate power that include: (1) rewarding subordinates for good performance, (2) holding team members accountable to the tasks necessary to achieve strategic objectives, (3) acting legitimately within organizational structures to focus strategy and most significantly (4) relying on managerial expertise to ensure the firm achieves appropriate and measurable success.
To generate business success, the traditional management functions — planning, decision-making, directing others, external and internal communications — need to be implemented in accordance to the firm’s strategic guidelines for performance and profit. Not all obstacles can be avoided, but all can be managed to generate a better outcome.
Five Methods for Overcoming Obstacles to Business Success
For CEOs and upper management personnel, exercise of these supervisory skills is essential to overcoming obstacles to exemplary business performance and success:
Perfecting Your Business Management Techniques: An effective CEO is able to adjust for strategic short-comings that obstruct reliable business performance. Acquiring specialized management training and business skill is increasingly necessary to efficiently mobilize organizational resources and corporate power. Successful CEOs demonstrate proficiency in managing every-day business activities like capital assets/finance, hiring/human resource administration, information technology (IT), marketing/sales, production and purchasing, among many other functions. They’re also adept at selecting qualified management subordinates and delegating authority to them, to assure objectives are met and obstacles overcome.
Developing a Powerful Mission Statement and Business Plan: Successful firms need organizing principles, comprised of a mission statement, explaining why you’re in business, and a business plan – which describes how you’ll get there. Strategy is important to success, and seldom is effective on-the-fly. A successful organization requires a definite purpose, something to work toward; vague ideas must be eliminated or transformed into tangible goals. These generate a verifiable basis for business decisions, as they affect your operation short-term and their impact on longer-term corporate objectives. Eliminate outmoded ways of doing business, replacing processes that don’t work. The business plan needs to be flexible, abandoning what is no longer successful for fresh ideas that generate customer enthusiasm and corporate growth. It should also include a clear schedule for implementing strategic events and attaining primary objectives, so you can monitor your progress and adjust the plan to eliminate obstacles, for better performance.
Perseverance: Obstacles to success are often persistent, and may require constant attention before they’re overcome. Concentrate on your firm’s core competencies – IT, marketing, production; whatever they may be. Make all aspects of your core product[s] the focus of your corporate strategy and development. Add value to what you do best, improving performance in the marketplace, before you seek to diversify. If obstacles to improved performance and growth endure, remember the objectives of your business plan. Make adjustments to your strategies as necessary, but persevere until goals are met. Doing so requires the discipline to identify and prevail over obstacles that limit optimal performance. Periodically evaluate your business activities and their success achieving your overriding objectives; don’t be diverted from your corporate mission.
Create a budget: Success costs money; you’ll need to re-invest revenues in the firm to grow and meet the demands of the marketplace. However, you’ll have no money to invest if you don’t effectively manage the finances. Poor financial management often results in wasteful spending and minimal cash reserves, significant obstacles to success. Witness the unfortunate consequences for many firms during the recent recession; too often, reckless spending left them without the cash reserves needed to sustain their basic operations. Having cash-on-hand provides a financial basis for remaining in business until obstacles are overcome.
Courage: Don’t panic if obstacles seem overwhelming. Maintaining professional composure in the face of adversity allows you time to organize your response to difficult conditions and developments, transforming them into opportunities for progress, rather than decline. The results might not always represent improvement, but will be better than ignoring the issue. Such behavior has the added advantage of motivating staff, generating confidence in your leadership, conviction in the firm’s ability to arrive at a useful solution, and loyalty toward the organization. The consequent organizational resolution makes obstacles more manageable, even if they continue to present problems.
Obstacles to business success are inevitable and can occur in almost every phase of operation, regardless of preparation and strategy. While they can slow down progress, obstacles also represent opportunities to develop solutions that improve performance and profits. The five methods discussed above provide a suitable foundation for meeting obstacles directly, as they emerge, so your business can succeed.
Brad Smith is CEO and co-founder of Rescue One Financial, headquartered in Irvine, California. Rescue One Financial helps individuals resolve unsecured debt during troubling times. Brad’s 18-year financial services career includes Wall Street with Merrill Lynch, where he helped pioneer the restricted stock diversification business at Morgan Stanley. Brad holds a BA in Economics from the University of Southern California.