Inaction can drive your business into oblivion

Organisations should put in place systems for quantification of the cost of inaction and take steps for its minimisation. FILE PHOTO | NMG 

Most corporate organisations prepare three- or five-year strategic plans that clearly spell out where they want to be from the present reference point. The plan also specifies the financial, human and other resources which would be required to reach the envisioned future. With the corporate board’s blessings on the strategic directions, the CEO’s execution programme is expected to meet the interests of various stakeholders.

More often than not, during the implementation of the plan, the cost of inaction crops up, ruining the organisation’s competitiveness.

Here are five consequences of the cost of inaction and how they can be handled:

Inadequate human resource capacity

Sometimes the mantra “people are our most important resource” is easier said than lived for organisations which believe that automation is a panacea. For the strategic plan to be effectively implemented, a human resource audit should be carried out to identify gaps to be filled either immediately or continuously. For example, if staff lack identified critical skills, they should be assisted to acquire them. The cost of inaction on the part of management on failure to enhance the human resource capacity of the organisation is loss of revenue.

Insufficient management empowerment


The leadership and management style of the CEO is a key component in driving the organisation towards achievement of board-set targets. Where different levels of management have not been sufficiently empowered, inaction and indecisiveness may become the order of the day. Service delivery to customers would be compromised giving room to unstoppable buck passing with no immediate resolutions.

Since customers are the main reason for an organisation’s existence, any sub-standard service delivery paves way for competition to bite one’s market share. The CEO and the management should promote a culture that supports employee empowerment and tolerance for business mistakes.

Inaction on future trends

Organisations which monitor social, economic, and technological, among other trends and take action on their business implications are more likely to survive market turbulences than others. For example, the fast growth of alternative sources of energy in our country should be a wake-up call for the monopolistic Kenya Power. The cost of inaction particularly in meeting customer expectations would in the long run kill the company’s competitiveness.

Underestimation of new competition

The annals of history have cases of corporate organisations such as Kodak that were unbeatable for offering unrivalled products in international markets. When opportunities arose for modifying the products in line with technological changes, they closed shops due to inaction. To steer away for the cost of inaction, organisation should be proactive instead of reactive on product development and service delivery.

Going for regional markets

Some corporate organisations whose products can compete in the regional market are still shying away from those markets. Although they have undertaken feasibility studies that confirm business viability, the organizations are still not making any move. The risk-averse top management teams will incur the cost of inaction in terms of loss of business opportunities.

For organisation to remain competitive, they should put in place systems for quantification of the cost of inaction and take steps for its minimisation.