Why do we fail

22 12 2006

No one likes to fail.

We can feel foolish, outmaneuvered, incompetent, insecure, unlucky, silly, angry, overwhelmed, frustrated and in some cases afraid to try again. after suffering a defeat.

Failure is an integral part of the learning process.

Failure is required in order to become successful.

Rare is the successful individual, product or organization that has not met adversity, failure, defeat and loss.

One of the keys to success is the ability to accept failure, learn from the experience and try again.

The fear of failure is so great in some organizations that it freezes innovation, thwarts change and stifles growth.

Organizations try to reduce or limit failure by passing on historically successful methods and accumulated knowledge to new members.

Many times this information is not useful and out of date because the elements, players and dynamics of today’s challenges are quite different from those of the past.

Use the following list to analyze your current projects (and possibly prevent or limit failure), or use the list after a setback or defeat to identify where you can improve.

Reasons for business failure can be broken into 4 main groups:

Planning

  • No plan
  • Incomplete plan
  • Wrong calculations
  • Poor or incomplete interpretation of data and research
  • Failure to take into account all factors
  • Lack of experience
  • Failure to evaluate competitor reactions correctly
  • Failure to anticipate consumer response
  • Significant difference between planned and actual costs
  • Poor cash flow calculations
  • Unrealistic goals and expected outcomes
  • Underestimate risks

Information

  • Didn’t collect all the pertinent information for planning
  • Product or service was not wanted or needed by customer
  • Lack of knowledge of market
  • Lack of knowledge of customers
  • Lack of experience in the industry
  • Lack of experience in manufacturing
  • Lack of experience in sales and marketing
  • Lack of experience in administration

Operations and Follow-through

  • Lazy, didn’t do the work required
  • Undisciplined
  • Unorganized
  • No control of suppliers
  • Did not stop in time and take corrective actions
  • Did not recognize warning signs
  • Ignored warning signs
  • Did not seek professional assistance
  • Lack of attention to logistics details
  • Failure to focus on customers needs, desires and wants
  • Poorly trained personnel
  • Lack of initial capital
  • Not enough capital to maintain operations for first years

Factors outside of our control

  • Important changes in technology
  • Environmental factors
  • International, Federal, State or local government laws, regulations and legislation
  • Aggressive competitor(s)
  • Act of God
  • Change in fashion and trends
  • Theft and fraud

Related Links

Leadership lesson – A Message to Garcia

How to systematically analyze any decision for better decision making

10 things you should never do on a Friday afternoon

9 steps to better decisions





How to systematically analyze any situation for better decision making

24 08 2006

The ability to analyze and make decisions is one of the most important qualities of anyone in a leadership and management position.

How to systematically analyze any situation

  • What does the information I have really mean or reflect?
  • What are the questions I should be asking in order to increase my understanding of the situation?
  • Who are the people who have the information and answers to my questions?
  • Ask the questions and accumulate the required information.
  • What are the fears, expectations, limits and points of view of the involved parties?
  • What have I learned, and what am I going to do about it?

Example: Imagine that your salesforce reports that customers are demanding delivery of your products to their store two times a day, at 9:00 AM and 4:00 PM, instead of the current delivery schedule of 3 times a week. What do you do?

Begin the analysis.

What does this mean? The customers needs or desires have changed. Our salesforce has detected a change in the marketplace.

What questions do I need to ask to understand this? Why is the customer requesting the change? Who requested the change, is it driven by costs, lack of inventory space, new management, competitors? What do our people think about this? What customers are requesting the change?

Who are the people with the information and answers to my questions? Your sales-force and logistics department. The CEO, purchasing managers and warehouse managers of our customers. Who is going to contact them and get more exact information about the situation?

Expectations and points of view of those involved? The sales-force knows that without this change they will lose customers and market share. The customer’s executives and purchasing managers have found an method to reduce inventory and stocking costs with your competitor. The warehouse managers are losing personnel and control and are unhappy. There are significant costs associated with implementing and operating the program. Your competitors are aggressively investing in order to take away your market share.

What have I learned and what am I going to do about it? You discover that a competitor is providing deliveries twice a day, and stocking the customers shelves, reducing costs for the customer. They have made significant investments in trucks and personnel in order to provide this service. Your top 20 customers are affected now. Failure to provide equal or improved service will result in the loss of the customers and your market share. It’s time to bring in the company decision-makers and create an appropriate solution and response.

Related Links

Was Peter Drucker right, is it all about attitude?

9 Steps to better decisions





20 challenges faced by a family owned business

17 08 2006

Every business organization has a unique set of challenges and problems. The family business is no different. Many of these problems exist in corporate business environments, but can be exaggerated in a family business.

Family business go through various stages of growth and development over time. Many of these challenges will be found once the second and subsequent generations enter the business.

A famous saying about family owned business in Mexico is “Father, founder of the company, son rich, and grandson poor” (Padre noble, hijo rico, nieto pobre). The founder works and builds a business, the son takes it over and is poorly prepared to manage and make it grow but enjoys the wealth, and the grandson inherits a dead business and and empty bank account.

Prepare now and help your grandson avoid the poorhouse.

20 challenges for the family business

  1. Emotions. Family problems will affect the business. Divorce, separations, health or financial problems also create difficult political situations for the family members.
  2. Informality. Absence of clear policies and business norms for family members
  3. Tunnel vision. Lack of outside opinions and diversity on how to operate the business.
  4. Lack of written strategy. No documented plan or long term planning.
  5. Compensation problems for family members. Dividends, salaries, benefits and compensation for non-participating family members are not clearly defined and justified.
  6. Role confusion. Roles and responsibilities must be clearly defined.
  7. Lack of talent. Hiring family members who are not qualified or lack the skills and abilities for the organization. Inability to fire them when it is clear they are not working out.
  8. High turnover of non-family members. When employees feel that the family “mafia” will always advance over outsiders and when employees realize that management is incompetent.
  9. Succession Planning. Most family organizations do not have a plan for handing the power to the next generation, leading to great political conflicts and divisions.
  10. Retirement and estate planning. Long term planning to cover the necessities and realities of older members when they leave the company.
  11. Training. There should be a specific training program when you integrate family members into the company. This should provide specific information that related to the goals, expectations and obligations of the position.
  12. Paternalistic. Control is centralized and influenced by tradition instead of good management practices.
  13. Overly Conservative. Older family members try to preserve the status quo and resist change. Especially resistance to ideas and change proposed by the younger generation.
  14. Communication problems. Provoked by role confusion, emotions (envy, fear, anger), political divisions or other relationship problems.
  15. Systematic thinking. Decisions are made day-to-day in response to problems. No long-term planning or strategic planning.
  16. Exit strategy. No clear plan on how to sell, close or walk away from the business.
  17. Business valuation. No knowledge of the worth of the business, and the factors that make it valuable or decrease its value.
  18. Growth. Problems due to lack of capital and new investment or resistance to re-investment in the business.
  19. Vision. Each family member has a different vision of the business and different goals.
  20. Control of operations. Difficult to control other members of the family. Lack of participation in the day-to-day work and supervision required.




Build your organization, don’t destroy it

14 08 2006

Pragmatic business people know that strategies must be reviewed before, during and after implementation. Difficult questions must be asked and answered throughout the organization. Results analyzed and reviewed in order to identify flaws and errors.

Many times this exercise can push us into seeking and identifying problems instead of solutions. Too much time spent on what can go wrong and not enough focus on what can be created. Gridlock sets in, no solution is good enough, there is always a flaw.

All to often we find ourselves criticizing the work of others and the efforts that did not succeed as expected. We spend time taking things apart to find out what went wrong, and seeking to identify who was responsible for the “failure”. Our days are spent destroying the ideas of others.

Why not focus an equal amount of time on the positive aspects?

What did or will work, and why?

Creation is much more difficult than destruction. Support the creation of ideas and solutions in your organization, make your first analysis focus on the successful or positive aspects.

Ask yourself, “what am I creating today”.





Leadership by default

12 08 2006

I have had the misfortune to have worked in organizations where the leadership, management and decision-making style could be called leadership by default. This is characterized by leaderships and management’s inability to make decisions on-time or to make decisions at all.

Leaders who are consistently unable or unwilling to make decisions can be a dangerous element in the organization. Often they are insecure about their position, or don’t have skills and abilities required to fulfill the obligations of leadership.

The usual excuses are often repeated to cover up and justify the absence of decision making. These would include; we don’t have enough information, the situation is volatile, and that there is too much information available. The excuses are covering up the inability to sort, organize and prioritize data and the inability to identify and recognize opportunities. Grave leadership errors.

By not making a decision on-time, the options become limited, and with more time, factors come into play that eventually corner the organization into a situation where a decision is virtually forced upon them. It is the only remaining option. The decision maker says they are ready to make the decision, everyone reviews it and agrees it is the right decision (as it is the only option remaining), and life goes on. The decision maker feel validated. It’s leadership by default.

If you go to purchase tickets to the theatre for an event that will be presented in 3 months there are plenty of choices, all different. If you purchase tickets on-time you can have your pick of the event, the seat you desire and the date that is just right for you. By waiting until 5 minutes before an event begins your options are extremely limited, perhaps the event you really wanted is gone. You made a decision, and got tickets with both scenarios, but the results (seats and events) are very different.

It is not fair to the shareholders, customers or employees to allow management to consistently stall and postpone decision-making. Efforts should be focused on finding the right people in the organization who are willing to research, evaluate and identify opportunities and make important decisions on-time, every time.

Related Links

Thanks to Lori for the inspiration – Iwan Cray Huber Horstman and Van Ausdal LLC





Current Resume – Lee Iwan – March 2007

27 04 2006

 

Lee Iwan

International Business Development

Sales & Management Executive

Accomplished bilingual and bi-cultural executive with broad based domestic and international experience in business discovery and development; sales, marketing and operations for start-ups, growth and mature organizations.

Results oriented, proven success in new market identification, strategic thinking, negotiations and pragmatic problem solving. Track record of “hands on” leadership increasing communication, sales, efficiency and profitability.

Thrive in dynamic and fluid environments requiring enthusiasm, creativity, communication skills and organization.

Core competencies include:

Relationships and Communication

Team Leadership

Cross Culture Liaison

Innovation and Change Management

Global Focus

Entrepreneurial Focus

Contingency Planning

PROFESSIONAL EXPERIENCE

QUIMICA CENTRAL DE MEXICO S.A. de C.V. Leon, Gto., México July 1998 – Present

Business Manager, Strategic Business Discovery & Development May 2005 – Present

Serve as independent executive working directly with CEO and Board of Directors. Fully responsible for the visualization, research, creation, communication, follow-through, analysis, planning and implementation of new business development and corporate strategic diversification projects.

Key Achievements:

  • Project Leader, pharmaceutical joint venture (Swiss-México), manufacturing and commercial operations .
  • Spearheading strategic alliance negotiations to increase long-term market share and global positioning.
  • Ongoing negotiations with India and China for product representations, agencies and toll manufacturing.

Business Manager, International Business March 2000 – May 2005

Served as Business Manager, responsible for global sales and marketing, distribution and logistics, and all corporate international negotiations with clients and suppliers.

Directed export sales and market development, international supplier strategic alliances; leadership of export sales distribution and agency networks; cross-functional team participation; business intelligence; sales and marketing strategy and leadership for the Asia Pacific and Latin American regions; sales implementation and market development; logistics and supply chain management, cross cultural communications, “globalization” of company culture and corporate special projects.

Key Achievements:

  • Created and implemented commercial entrance for Asia-Pacific market, first 3 years revenue $ 5 M (US), projected annual sales growth of 200%.
  • Initiated and maintained strategic alliances with international suppliers, raw material cost savings of $ 2 M (US) fortified long term strategic positioning.
  • Negotiated exclusive agency representations in Mexico for South African and US specialty chemical manufacturers.
  • Increased company global competitiveness utilizing the export department to drive corporate cultural changes in strategic planning, production, time to market, supply chain and logistics, sales, marketing and administration.

Export Manager July 1998 – March 2000

Served as Export Manager, responsible for sales, distribution and marketing strategy and management for 20 countries including Latin America, US, Europe and Taiwan.

Key Achievements:

  • Created new commission and base price structure for agents and distributors resulting in increased loyalty and increased revenue of 8%.
  • Re-engineered department systems to increase revenue and customer loyalty through increased efficiency in communications, administrative processes and product shipping.
  • Managed international sales force in Latin America and Asia Pacific regions (18 distributors / agents).

NUVIDA S.A. de C.V., León, Guanajuato, México January 1993 – July 1998

Owner–President–Entrepreneur

Served as President for start-up specialty service business, corporate and government clients.

Key Achievements:

  • Alliance between private industry, State and Local government to create and maintain 100-acre interactive ecological area – Parque Explora.
  • Managed workforce of 45.
  • First workforce in the State to receive State Certification (training and operations procedures).

FLOWERS FLOWERS INC., Evanston, IL, USA March 1986 – August 1993 Owner–President-Entrepreneur

Served as President for start-up innovative luxury consumer goods and service business.

Responsibilities included: strategy and planning, management, sales and marketing, purchasing and operations.

EDUCATION

Bachelor of Science Agricultural Economics * University of Illinois – Urbana, IL 1980

PROFESSIONAL ACHIEVEMENTS

Board Member, State Chemical Industry Export Committee, COFOCE, February 2007 – Present

Weblog: Business South of the Border August 2006 – Present

Weblog: Lee Iwan Accumulated Experience April 2006- Present

Business Development Mission, Chennai, India, February 2007

Chromium Industry Conference, Cape Town, South Africa, February 2006

Commercial Mission, New Delhi, Mumbai India, November 2005

Course: Finance for Non-Financial Managers, 2005

Business Development Mission: Buenos Aires, Argentina, 2004

Board Member, State Leather Industry Consulting Committee, COFOCE, 2000 – Present

ANPIC, Mexican Leather Industry Fair, Leon, Gto., Mexico, 1999 – Present

ISO 9001:2000, Certification Process, 2003 – 2006

Business Development Mission: Geneva, Switzerland & Moscow, Russia, 2004

Business Development Mission: Istanbul, Turkey, 2003

All China Leather Exhibition (ACLE), Shanghai, China 2002 – 2005

Guangzhou Leather Fair, Guangzhou, China, 2002 – 2005

Business Development: Geneva, Switzerland, 2002

Commercial Mission: Mexico – Central America, 2000 – 2002

Asia Pacific Leather Fair, Hong Kong, 1999 – 2005

Linneapelle, Bologna, Italy, 1999 – 2005

Commercial Mission: Mexico – China, 2000 – 2001

Business Development: Amsterdam, Holland, 2000

Business Development: Guatemala, El Salvador, Honduras, 2000

Miami Leather Fair, Miami, FL, USA 1999 –2001

Business Development: Uruguay, Brazil, Argentina, 1999

FENAC, Leather Fair, Novo Hamburgo, Brazil, 1999

Course: Mexican International Commerce Legislation, 2001 – 2004

Diploma: Modifications in the Mexican Customs Legislation, 2003

Diploma: International Commerce – Logistics, 2001

Diploma: International Commerce, 2000

Course: The Strategic Salesperson, 1999

Periodico AM, Newspaper Columnist. 1994 – 1996

Society of American Florists, Editorial Board, 1990 – 1992

Chicago-Dempster Merchants Association, Vice President, 1988 – 1990

Lee.iwan@gmail.com