Business Failure 4: Subordinates Hold or You Have Inaccurate Information

This continues our series on situations that can cause your business to fail

Businesses run on information. Market information defines clients, competition, and market opportunities. Information about overhead, supplies, and costs establish the minimum you can price your product or service. Employee information clarifies what you can expect employees to do, how to act, and how much you can rely on them. You make poor decisions if your information is inaccurate, or your staff holds information back from you or gives you false information.

Subordinates May Hold Back Information

As your business grows, you begin to rely more heavily on your staff or subordinates for information.

• Your accounting clerk relays daily revenues, accounts payables and receivables
• Your sales clerk and point of purchase systems provide daily sales information, cash received, and cash given
• You rely on your shipping clerk or inventory control system to tell you how much product you have on hand
• Your suppliers or vendors maintain information about competitive pricing and discounts

What if the people you rely on for information withhold it or give you false information? Many reasons could influence the information you received:

• The person preparing the information is incompetent and inaccurate
• They receive wrong information from their sources and don’t verify it
• They have an overriding reason to withhold information i.e. loyalty to others, cover a mistake
• They don’t understand the information you really want and inadvertently give you the wrong data
• You offended or embarrassed them and they want revenge or payback

All of these reasons, and more, can result in your subordinates holding back or giving you inaccurate information

You Have Inaccurate Information

You may also receive false or inaccurate information for other reasons:

• We increasingly rely on automated information for monitoring or decision-making purposes. What if a key formula in a spreadsheet or database is improperly entered? It can give you inaccurate information and you would not know it.
• We Google questionable information sources

Bad decisions based on inaccurate data can ruin your business

Thursday we review how living too close to the edge or loading too much risk causes failure