When assessing why businesses fail, the most important thing is to adopt an honest stance while carrying out the analysis, and, surely, one plausible reason will stand out amongst the others: poor leadership.

1. By David KigerImage courtesy of Skitterphoto at Pexels.com

2. Amidst today’s wave of different business trends and
tendencies, it is possible to get lost at some point: maybe the
juncture is more challenging than expected, or maybe
businesses lack the necessary experience to face today’s
challenges. It is not a secret that, as this new landscape
unfolds, many businesses have already failed in their attempt
to keep the pace. But, is there any other plausible explanation
that could account for why do businesses fail? David Kiger has
already this topic in previous articles, and in order to provide
an accurate answer to this question, it is important to get past
the common excuses, explanations, rationalizations and all
kinds of justifications normally used to explain business
failures. In fact, when assessing why businesses fail, the most
important thing is to adopt an honest stance while carrying
out the analysis, and, surely, one plausible reason will stand
out amongst the others: poor leadership.

3. As mentioned in previous articles, real leaders are not fond of
taking the credit for their success, but they will always
certainly accept responsibility for their mistakes and failures.
Perhaps, the most common connotation associated to this is
the fact that accepting shortcomings is a bit harsh; however,
doing so is something embodied within the nature of a true
leader. David Kiger as already addressed why is it important to
strive to be a well-prepared leader and why businesses
without proper leadership end up being led astray; however,
in order to understand why sometimes leadership and leaders
do not live up to their expectation, here are several reasons
that could account for that:

4. Character (or lack thereof)
It does not matter whether an individual attended the most
expensive university; if a leader does not do the right things at the
right time for the right reason, then they will certainly have a hard
time struggling to avoid failure. Leaders who do not show character
will not make an impression in others, thusly failing to create trust,
confidence, and loyalty amongst their peers.
Lack of Perspective
In business, it is the job of the CEO to clearly convey the corporate
vision. With no vision, the company will likely face trouble ahead. A
flawed vision creates an imbalance between how the corporate
values are being perceived and the vision itself, which subsequently
leads the company to undesired fields. A leader must be able to
display a firm belief in what he or she is doing and successfully
communicate it across the company.

5. Mediocre Branding
As depicted in previous articles, poor branding is always associated with
mediocre leadership. Brands plummet for one reason mostly: leaders
have dodged their responsibilities —they have managed to let their
brand go sideways while failing to deliver on the brand promise.
Leaders who disregard the importance of the brand amongst the rest of
corporate assets clearly deserve what lies ahead for them.
Poor Implementation
It all comes down to implementation, and ensuring that all processes
are implemented and executed properly is the job of a leader. Today’s
juncture is full of so-called entrepreneurs who do not focus on
acquiring the necessary talent and resources to carry out their
strategies to ensure success and manage future setbacks and problems.
Poor execution prevents all businesses, regardless of their nature, to
recognize good business opportunities and get the most out of them.
Striving to foster a sense of leadership will pay off over time.

6. Wrong Strategy
If a company does not have a solid sense of leadership, chances are its
strategy is erroneous as well. A wrong strategy simply reveals poor
leadership; and although there are exceptions, in today’s corporate world
companies tend to succeed by prior designations and fail by default.
Behind a poor strategy, there is always an unfit and incapable leader.
Capital (or lack thereof)
Today’s landscape offers plenty of ways to acquire capital —ranging from
crowdfunding to private investments—; however, there is a sheer array of
cases where well-capitalized businesses end up failing more than
miserably. Likewise, there is a myriad of not-so-well capitalized businesses
that later have gone on to become a key player in their category. Lack of
capital can be used, to some extent, to explain a business failure, but it is
certainly not the reason why ventures fail. Acquiring capital, and managing
it wisely, is, in the end, the responsibility of a leader. The amount of money
required to successfully run a business depends upon how well the
business is being operated. If leadership fails to run the business taking into
account capital constraints and all sorts of capital issues, then the blame
ought to fall on leadership. And last but not least…

7. Inefficient Management
In business, leaders are responsible for recruiting, teaching
and ultimately retaining management talent. If management is
failing to get the job done, it is definitely not a “management”
derived problem rather than the fault of executive leadership.
Leaders never blame their management team for poor results.