If Your Business is Failing, It’s Your Fault


Having a successful business is difficult and it can take time. Any owner, or leader, knows that when their business is successful that means they are successful. But do they also agree that if their business is failing, it’s their fault?

I have worked for so many different businesses and types of organizations. Some had such poor leadership that it was a wonder they were still around. Of course those organizations were funded by taxpayers: governmental organizations. That means that it didn’t matter how bad the leadership was, how unmotivated everyone was, or even how stressed out everyone was, there was no possibility the organizations would fail and have to close its doors.

Unfortunately, that is only the case for governmental organizations. Anyone who has a for-profit or non-profit business is at risk of having to close their doors, because they failed, most likely due to poor leadership.

Several different areas of a business are compromised because of poor leadership:

  • Employee motivation
  • Employee turnover
  • Job satisfaction
  • Customer satisfaction
  • Productivity

But poor leaderships costs businesses more than just this. In fact, the monetary impact that poor leadership has on businesses is astronomical.

  • Organizations lose over $1 million per year because of poor leadership

This is due to:

  • Employee turnover and the cost of replacing employees
  • Employee potential – about 40% of employee potential is untapped
  • Loss of productivity – most organizations are operating at 90% productivity

Just imagine how profitable businesses would be if they fixed their poor leadership problem.

Why does poor leadership have this financial impact?

The way employees are treated is reflected in their work, which then impacts the business.

  • Poor leadership reduces employee well-being
  • Poor leadership is related to workplace bullying
  • Poor leadership impacts overall office morale

When employee well-being is reduced, there is an impact on both emotional and physical health, which in turn could increase using sick days, calling in, or even resigning from the job.

Workplace bullying has implications that go beyond employee well-being; however, employee well-being is also affected. Bullying undermines everything the organization is working to accomplish. It destroys trust, reduces motivation, morale, and productivity, and could lead to great financial loss and reputation for a business.

Office morale can be seen in turnover rates, rates at which people call in or take personal days, in productivity, and in interaction within the office. When poor leadership affects office morale, expect everyone to feel it and react accordingly.

How do businesses prevent business failure?

The obvious answer is to have better leaders. A leader is someone who can encourage, motivate, teach, and inspire. But how can a leader do this? There are a few different ways:

Reward Performance

Sometimes working is difficult and people need to know that what they are doing is important. I have always appreciated leaders/owners telling me that I have done a good job. Some companies reward performance by giving extra time for lunch, a personal day, or days off, and this is great because it shows that the employees work is being recognized, but rewards this extreme might not be necessary.

Many people are intrinsically motivated, which means that their motivation comes from how they feel about what they’re doing. This is why a pat on the back, or a “job well done” is so important.

The key here is to find out exactly what each employee cares about as a “reward”. This will involve getting to know employees and understanding what motivates them.

Address Performance Problems

Let’s just say I have worked for a few people who allowed poor performance to continue. I hated those jobs because it affected my performance and my motivation, and I was often left to fix the problems that my poor performing coworkers created.

Poor performance can be a combination of many things, such as failure to complete work because of surfing the internet, talking on the phone, or even taking extra-long breaks. However, poor training or incompetence might also come into play.

All of these things increase poor performance, but if these behaviors, or other performance issues, are allowed to continue the morale in the business will decline, motivation will be reduced, and productivity will go down the toilet.

To increase business success, all performance problems have to be addressed. If they aren’t, then the business might be doomed for failure.

Act Fairly and Consistently

Fairness and consistency are both pretty important in life, but it doesn’t seem that they are in business. Often top performers are treated differently than their coworkers, which can create a feeling of unfairness and lack of consistency in the workplace. Once this happens, the morale in the workplace declines and along with it motivation.

Leaders may think that treating top performers differently, better, than other employees will increase motivation to do better. Unfortunately, this often isn’t the case. Instead, the top performers remain top performers and the rest of the employees remain the same, or decline in performance.

Treating every employee fairly and consistently is important. For those who underperform, work with them to try to increase their performance. For top performer, reward them, but do not treat them differently than their coworkers.

Give Feedback

Feedback is essential regardless of what position you have. Leaders should receive feedback from employees, but they should also give feedback. In fact, feedback can help increase performance, office morale, motivation, and productivity.

Feedback can be as simple as acknowledging how well the work was done. If the feedback is concerning poor performance, however, give insight into how the employee can improve. Maybe they don’t fully understand what is expected of them, or they need additional training. Providing feedback will help address these needs.

Look at Who You’re Hiring

David Ogilvy, often considered the father of advertising, once said, “Look for people who will aim for the remarkable, who will not settle for the routine.” This is often one of the biggest problems leaders have, they fail to hire great, amazing, and remarkable employees.

Leaders should examine who they are hiring, because this can either benefit or damage a business. Leaders should look for employees who want to take the business to the next level, who are innovative, and who have great ideas. This isn’t about someone being able to do the work, but about someone being able to do the work well and offer innovative ideas. Just imagine the possibilities!

Ultimately, the future of a business is up to those who run the business. If the business is struggling, then the leader should reevaluate what is happening in the workplace. Office morale is the best indicator of something be amiss, which then should be corrected by the leader.

If, however, the leader fails to correct problems, then problems in the business, and, ultimately, the business failing is their fault. The leader is the only one who can correct it. If they don’t, they have no one to blame but themselves.


About Author

Margaret Murrow

Margaret obtained her M.S. in Organizational Psychology and Nonprofit Management in 2014 after spending a decade focused on homeschooling her four children. She is currently pursuing a Ph.D. in Health Psychology and has earned a certification in stress management coaching. When she is not studying, she spends time working as a freelance writer and a certified stress management and business coach for employers around the world.