Top 10 reasons why businesses will fail in the next 10 years

Unfortunately, business failure is common—and it’s not just startups and small businesses that fold every year. Fifty percent of the Fortune 500 companies that existed 20 years ago are gone, and the lifespan of multinational companies is limited and shrinking.

Let’s examine the top 10 reasons why businesses fail – and a valuable bonus tip.

1. Satisfaction

Arrogance is a company killer. When leaders become complacent, their companies begin to fall behind. To be successful, companies still need humble leaders who keep a check on fear to spur them to action. Leaders need to know that they cannot cling to past or present success because sitting on their heels will cause their organizations to fall behind.

2. Not prioritizing sustainability

The number one job of any business is to help make our world a better, more just place. Every business must address the world’s most pressing sustainability challenges. Consumers and investors are demanding greater accountability from companies when it comes to sustainability and diversity, equity and inclusion – and this trend is increasingly being voted with their wallets.

3. Not putting customers first

Anything a company offers should provide value to customers and make their lives better and easier. Putting customers first means not being afraid to abandon existing products and services and getting rid of anything that doesn’t add value to customers.

4. Not constantly creating new things

Our world is moving incredibly fast, and new and innovative ways to deliver products and services are emerging every day. Companies must innovate relentlessly to remain competitive. Many companies are loathe to change established products, services, or processes—otherwise there will be many innovators who are more than willing to change. Those companies will be at the forefront.

5. Not thinking of themselves as technology companies

We have never lived in a time of more transformative technologies. Technology trends like machine learning, robotics, blockchain, and the metaverse are revolutionizing every business in every industry. With the rapid pace of change – and technology being first and foremost in the business world – every business needs to think of itself as a technology company and put these digital transformations front and center.

6. Not treating data as a key business asset

Data is the lifeblood of successful companies. They use data to make better business decisions, understand customers and market trends, create smarter products and services, and improve their business processes.

But all this information comes with great responsibility. Companies must maintain data security and comply with all applicable security laws. Companies that are going to be successful in the future must have a strong strategy that makes the most of their data while protecting partners and customers.

7. Inability to attract and retain talent

Recruiting and retaining top talent is a challenge for today’s organizations – but it’s always been true that people are the heart of every company. Successful companies are working to develop the right culture, and prioritize diversity. They are also implementing flat, efficient hierarchies and management structures where people feel comfortable and can be their most authentic selves.

8. Not developing future skills

The skills needed to be successful at work are evolving faster than ever, and the half-life of today’s skills is rapidly shrinking. Every organization must ensure that its people are developing the right skills, or they will simply be left behind.

9. Forming a strong partnership and not being able to mix with others

No business can operate in isolation, and in today’s world, building strong and resilient partner relationships and supply chains is more important than ever. For business leaders, this can mean a collaborative competition with traditional competitors – called “collaboration” – to tackle their industries’ biggest challenges.

10. Lack of accuracy and transparency

To build and maintain a successful organization, you must have the trust of your stakeholders and customers. Earning this trust requires openness, honesty and integrity – even when things go wrong. Organizations must communicate their purpose and mission, and be transparent about business processes that affect customers.

A good example of this is transparency around a company’s use of information. Companies that try to hide how they use data (or use users’ data for nefarious purposes) will fail, and companies that are completely transparent about how, when, and why data is used will thrive by building user trust.

Hidden cause of failure: lack of business planning and execution

Many businesses fail due to lack of short and long term planning. Your business plan should include where your company will be in the next few months to the next few years. Include measurable goals and outcomes, as well as specific to-do lists with dates and deadlines.

In my work with many different organizations, I help them prepare for the future and break down their goals into a very simple plan and strategy that everyone can understand and deliver.

Learn more about the trends shaping our world in my book, Business Trends in Action: 25 Trends That Will Redefine Organizations, winner of the 2022 Business Book of the Year. To stay on top of the latest business and technology trends, be sure to subscribe to my newsletter and connect with me. on Twitter, LinkedInAnd YouTube.