“Mismanaged.” It is a strong word.
When a business performs badly, people are quick to say, “It was mismanaged.”
But what does being mismanaged really mean?
It doesn’t necessarily mean that the people running the business are incompetent. Nor does one bad decision, one failed project or one disappointing year automatically mean a business
is mismanaged.
To me, mismanagement is something more fundamental.
It is when problems are visible but allowed to continue. When warning signs or red flag signals are ignored, when accountability disappears. When management knows something is wrong but fails to do something about it.
And usually, it doesn’t happen overnight.
1. Refusing to confront the brutal facts.
One of the most important disciplines I have learned in business is to confront the brutal facts.
If sales are falling, don’t explain them away.
If expenses are rising faster than revenues, find out why.
If a store keeps losing money, hoping that next month will somehow be better is not a strategy.
Good management begins with seeing things as they are, not as we would like them to be.
2. Knowing there’s a problem
but not acting.
Every manager makes mistakes. I
certainly have.
Making a wrong decision is not necessarily mismanagement. We sometimes make the best decision we can with the information available and still get it wrong.
What concerns me more is indecision.
When everybody knows there is a problem, meetings are held, reports are prepared, discussions go on and nobody takes responsibility for fixing it—that is mismanagement.
Problems rarely disappear because we ignore them.
They usually become more expensive and harder to solve later.
3. Allowing poor performance to
become normal.
Every organization eventually becomes what its leaders are willing to tolerate.
When deadlines are repeatedly missed without consequence, they will continue to be missed.
When mediocre performance is accepted, mediocrity becomes the standard.
When nobody is accountable for results, eventually nobody feels responsible for them.
Management isn’t merely giving instructions. It is setting expectations, measuring performance and holding people, including ourselves, accountable.
4. Losing control of the numbers.
I have always been figure-conscious.
You cannot manage a business effectively if you don’t know what the numbers are telling you.
Sales. Margins. Expenses. Cash flow. Productivity. Profitability.
Not once a year. Regularly. In our family business we track sales daily and the P/L every 21st of the following month.
Numbers are an early-warning system. They tell us where the leaks are before the ship starts sinking.
Final thoughts
Mismanagement doesn’t always look dramatic.
Sometimes it looks like another meeting.
Another excuse.
Another deadline extended.
Another month of disappointing numbers.
Another problem everyone knows about but nobody fixes.
That is why businesses are rarely mismanaged overnight. It happens little by little, when small problems are tolerated until they become big ones.
Good management is often much simpler: confront reality, know your numbers, make decisions, demand accountability and follow through.
Management is not about never making mistakes.
It is about never allowing problems you can solve to become problems you simply learn to live with. That’s the opposite of mismanagement.
