Marcia's Leadership Q and As: Why Businesses Decline

Q. Our company is declining in sales and profits after being successful for decades. What’s happening?

A. Your competitive edge is waning, and there are probably multiple reasons why you’re experiencing those results. Basic causes for decline are that a business loses its innovative leadership thinking and its direction; customers don’t want to buy your products and services; and, the team isn’t providing an engaging customer experience.

To turn your decline around, leaders need to create a compelling vision and communicate it. A healthy, productive culture emerges when management invests in its team and develops individuals who can contribute and find joy in working together to serve customers. Eventually self-organizing teams are directly engaged with customers and anticipate and deliver the customers’ needs.

Continually improving and innovating means being in touch with customers and deeply understanding what’s most important to them. Does it mean delivering higher quality, faster service, responsiveness? That is the role of management. Understand the customers and what they want and need.

Organizations that struggle are generally first, out-of-touch with their customers. Secondly, they don’t have the systems, processes, or teamwork in place to deliver the customers’ needs. Third, leaders are focused on arbitrary numerical goals and bottom-line numbers rather than delivering quality products and services which produce better goals. That thinking needs to pivot, or the decline will continue

In addition, leaders need to rapidly decrease the complexity, waste, fear, and toxic behaviors in the organization to allow productivity and progress to flourish. A rapid transition can occur and save the organization, but it requires a quick assessment and rapid action to achieve success.