complacency kills companies v3

Complacency Kills Companies

Presented to Shires BusinessXchange 13th September 2011

Overview

1. Introduction2. What is complacency?3. What types of complacency are there?4. Spotting the dangers5. Example and how to combat complacency

Types of complacency

• Comfortable Complacency– “we are doing alright”– “we have our own little niche”– “we have always done it that way”Examples


• Cosy Complacency– “we can postpone that project for the time being”– “we cannot increase sales, so we must cut costs”– “we have always done it that way”Examples


• Arrogant Complacency– “we are successful, we must be doing it right”– “we have nothing to learn”– “we have always done it that way”Examples


• Lack-of-Vision Complacency– “I cannot see what more can be done”– “we are doing as well as anyone else”– “we have always done it that way”Examples

Dangers of complacency

• Slow drift and decline– Niche– Market share

• Unused potential and opportunities– Risk averse– Lack of direction– Scared of making mistakes

Typical ExampleComfortable ArroganceProfitable Breaking even no changesNiche No financial informationExisting lease arrangements Grow business

Profit marginsCosy Lack-of-visionStaff using credit card New business customersStaff using fuel cards Overloading vehiclesRoute mapping

Typical ExampleComfortable ArroganceLarger profits Comparison of year on yearChanged model Budget, management accounts

3 year business strategyCalculated margins, changed model

Cosy Lack-of-visionCards returned, deduction from salary Sold new contracts, localisedMonitor, new procedures Larger vehicles, reduced number New routes, mapping software of vehicles and staff

Combatting Complacency

• Review your business plan or strategy at regular intervals

• Prepare management information and assess• Give yourself a new objective each month• Research your industry not just your world• Get critique on your business• Take a calculated risk