Businessman stamping approved stamp on document in meeting
Delaware, the second smallest state by landmass, has an inordinate impact on the business world. More than 60% of Fortune 500 companies are included there. Delaware’s hold on incorporations is almost exclusively a function of its unique corporate legal systems. Delaware’s statutes provide flexibility, and well-developed case law provides important guidance for businesses. This combination is the main reason why companies continue to incorporate in Delaware. Legal protection in decision-making is one of the main reasons, because decision-making itself is a complex matter.
Companies employ accountants, finance teams, legal advisors and C-suite executives to comb through data and make decisions. Teams can dig into spreadsheets and reports, make great decisions, and still get disastrous results. The flip side of a business decision gone wrong can be catastrophic, leading to diminished morale, lost revenue, reputational damage and even lawsuits. It’s the last issue the Delaware courts have dealt with: What was the incentive to make bold business decisions when lawsuits are always looming?
Through case law and statutes, Delaware provides companies with an important refuge from the downsides of their decisions. Companies there—through legal and case law protection— enjoy protection against business decisions made by mistake and may therefore be more aggressive in their decision-making. They are smart to do that; results like this have urged business leaders to cautiously apply all available business protections, including insurance and independent legal advice, to protect themselves from liability. But what about plans for success?
The downsides of business decisions are often sensational and make headlines far more often than the completion of a successful project. Business leaders would be wise to focus on damage protection and loss mitigation. However, companies should not only look for ways to survive, they should look for ways to get ahead and reap any benefits. In fact, it can be just as risky not to focus on moving a business forward.
That can be a challenge when business leaders have to make dozens of decisions a day. So, here are three ways leaders can prepare themselves for success:
1. Use technology that promotes good decisions.
The pandemic has drastically changed the workplace. During the height of the pandemic, organizations had to rethink everything, even things as simple as accessing physical resources or ensuring collaboration. While some companies have embraced the return to work, others have remained in hybrid or fully remote arrangements. Any of these situations can work, but it’s critical that businesses maintain the ability to adapt to events like COVID-19 and improve their business with technology.
Matt Giffune, co-founder of Occupier, a transaction and portfolio management software that helps commercial tenants and brokers manage their real estate footprint, has seen people in the real estate world who embrace technology achieve superior results. For example, lease management software that enabled comprehensive access for everyone from insurers to construction managers to C-suite executives had a positive effect.
“Everyone was working from a single source of truth,” Giffune said. “The centralized information allowed as many people as needed to offer their insights and work from a stable set of information. For example, if someone knew about specific zoning issues or finding subcontractors in a particular area, teams could work to resolve those issues before critical deadlines are met. By increasing access to stable, shared data, companies are likely to benefit from different perspectives and continue to make excellent decisions.”
As a protective measure, companies must continue to invest in technology that ensures that their operations do not become brittle. However, using that technology to increase collaboration and increase profits is a distinct possibility in many businesses and should be pursued relentlessly. Giving teams the technology they need to make good business decisions is critical to success.
2. Create diverse and inclusive recruiting practices.
The world has become increasingly global and diverse. Companies that embrace fair and inclusive hiring practices reap significant short- and long-term returns on investments beyond the obvious moral and legal benefits.
A study found that companies with women in leadership positions enjoyed a Increase of $42 million in fixed value. In the long run, racial and ethnic relations are likely to change drastically in the US Organizations that lead the way in creating hiring processes that ensure their teams reflect broader population characteristics may experience greater benefits, such as greater economic impact.
An important approach to fostering excellent hiring processes is to recognize biases in hiring and look for ways to: eliminate them. For example, Microsoft’s old hiring process included one channel where everyone involved could see the feedback from the others. This led to a phenomenon where people made decisions based on the opinions of others. Microsoft changed the process of making feedback private until the interviewers provided their own feedback about the candidate. By intentionally shielding hiring managers from the opinions of others, they gained a more accurate picture of candidates’ skills and made decisions that were not based on the perceptions of others.
With the stakes so high and much to be gained, leaders must invest in processes like Microsoft’s to ensure excellent, unbiased hiring results. Hiring great people, in turn, provides the right infrastructure to make the best business decisions.
3. Invest in impactful product offerings.
The hyper-competitive business landscape is not letting people rest on their laurels. With rising inflationincreasing 10.8% from April 2021 to April 2022: Businesses need continuous innovation to compete for consumer spending. Business leaders should consider investing in new, premium offerings to stand out.
Not all companies have the capabilities for new research and development and product launches, but they still need ways to grab consumer attention. Many companies are turning to offering customers premium options or increasing consumer perception of their offerings to grab their attention. Starbucks, for example, is increasingly focusing on creating experiences customers can not exchange of. By increasing the attractiveness of their products and making them difficult to replicate at home, Starbucks continues to increase customers’ willingness to spend.
Of course, business leaders need to be careful not to just cause price spikes and nothing more. If companies can find ways to increase value for customers, they are likely to face less resistance when they raise prices to offset inflation. Companies that want to maximize their profits and secure their future need to invest in the right product strategies to get the best results. Investing in market research and deciding to reinvest in product offerings will deliver optimal business outcomes.
While the downsides of poor decision-making are important to weigh, business leaders should settle in this area and give decision-making a Delaware-sized focus. Loss control strategies are essential, but investing in the right technology, people and products will drive companies to profitability and enable them to compete in a competitive landscape.
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.