11 Major Operational Mistakes Businesses Make

2023.05.08 11:36 AM By Joshua Taddeo, Principal Consultant
automating workflows

Operations are the backbone of any successful company, ensuring that all the moving parts function smoothly and efficiently. It's the secret sauce that separates thriving businesses from the ones that struggle to stay afloat. From managing resources to optimizing processes, operations is the driving force that keeps a business running like a well-oiled machine.

When it comes to operations, mistakes are common because it's easy to get caught up in the day-to-day tasks and lose sight of the big picture. Even the most successful business owners can fall victim to major operational mistakes that can have serious consequences. This guide will help identify the most painstaking mistakes so you can avoid the pitfalls that come with them. 

1. Neglecting to Document Existing Processes   

The role of an operations manager (OM) is to enhance business processes by carefully observing and analyzing the current system. Once new processes are implemented, OMs must compare them to the old ones to ensure they have improved.


Without proper documentation of the initial processes, it's impossible to determine whether an OM is succeeding or not. This oversight can lead to a waste of company resources for an extended period of time. Don't let this mistake cost your business valuable time and money. Ensure your OMs have the documentation to track their progress and ensure success.

2. Lacking Clear SOPs for New Employees 

Without clear, consistent, and accessible standard operating procedures (SOPs), a company's growth is at risk. Training new employees can be a challenge, especially if seasoned employees need to stop their day-to-day work to provide extended training. This can be detrimental to everyone involved.

discussing business operations strategy

However, having clear SOPs in place that new hires can access can make a significant difference. Not only can the trainer manage their existing workload more effectively, but the employee can also develop more confidence and agency. If a company tries to scale without clear SOPs, employees may struggle to feel valued, leading to high turnover rates. This, in turn, can lead to decreased morale among existing employees, and the hiring process may need to start over, compounding the issues.

3. Hiring the Wrong People 

Hiring the wrong people is like buying a pair of shoes that don't fit - they may look great, but they'll hurt your feet in the long run. When it comes to running a business, hiring the wrong people can have serious consequences. For example, imagine you're running a restaurant, and you hire a chef who doesn't have the necessary experience or skills. They may be able to whip up a few dishes, but they'll struggle when the kitchen gets busy. This can lead to long wait times, unhappy customers, and lost revenue.


Or, consider a tech startup that hires a developer who doesn't share the company's core values. They may be able to write code, but they'll struggle to work collaboratively with the team. This can lead to missed deadlines, poor-quality work, and a toxic work environment.


In both cases, hiring the wrong person can have significant operational and financial consequences. It can lead to wasted time, resources, and lost opportunities. It's crucial to take a measured approach to hiring. Don't rush the process, and make sure you're clear on the role you're looking to fill. Take the time to evaluate candidates carefully and ensure they have the necessary skills and experience.

4. Failure to Build Culture   

The business culture is often characterized by the mantra of "move fast and break things." However, this approach can lead to problems when founders hire rapidly and fail to prioritize the professional development of their staff. As a result, internal conflicts can arise, taking up valuable time that could be spent running the company. To avoid these issues, business owners should establish five to 10 key cultural values and seek input from their employees. When hiring new candidates, it's important to look for individuals who can uphold these values and incorporate them into performance reviews.

discussing business results and process improvements

One effective strategy is to schedule one-on-one meetings with every new employee on their first day. This allows for open communication from the start and ensures that everyone is on the same page. By prioritizing company culture and employee development, businesses can avoid internal conflicts and focus on achieving their goals.

5. Neglecting Employee's Individual Skill Sets 

One of the biggest mistakes leaders can make is not allowing their employees to excel in their areas of expertise. Every employee has a unique skill set that they bring to the table, and it's important to recognize and develop those skills. By giving employees the autonomy to develop their skills independently, you'll find that they are happier, more engaged, and work harder. This can lead to increased productivity and, ultimately, more revenue for your business.


So, don't make the mistake of forcing employees to fit into a specific mold. Instead, embrace their individual strengths and give them the freedom to develop those skills. When you do, you'll create a happier, more productive workplace that benefits everyone involved.

discussing business results and process improvements

Let's say you run a marketing agency, and you assign a copywriter to manage a social media campaign. While the copywriter may be able to write compelling content, they may not have the necessary skills to effectively manage a social media campaign.

As a result, the campaign may not perform as well as it could have, leading to lost revenue and unhappy clients.

Additionally, the copywriter may become frustrated and disengaged, leading to decreased productivity and increased turnover.

6. Sticking to an Old, Familiar Process   

One mistake that leaders often make in operations is sticking rigidly to a set process and workflow, even if it's no longer effective. While these processes may have worked in the past or during the early stages of a company, they can become detrimental to growth over time. For example, a leader may spend too much time on administrative tasks that could be automated, leaving little time to focus on areas with high growth potential.


It's crucial to find what works best for your business and periodically review and revise your processes as you grow. This means assessing whether your team has the tools, automation, strategies, and workflows they need to be successful. By remaining flexible and open to change, you can ensure that your company continues to grow and thrive. So, don't get stuck in old ways of doing things. Embrace new ideas and strategies, and be willing to adapt as your business evolves.

7. Overmanaging Your Employees 

Training your employees can be good, but micromanaging can do more harm than good. When leaders overmanage their employees, they can stifle creativity, decrease motivation, and reduce productivity. For example, imagine a manager who constantly checks in on their team and hovers over their shoulders. This can make employees feel like they aren't trusted to do their jobs, leading to decreased morale and engagement.


It's crucial to give employees the autonomy to do their jobs and make decisions independently. This means setting clear expectations and goals, providing the necessary resources and support, and then stepping back and letting employees do their thing.

manager meeting with employees at the office

8. Missing the Real Bottleneck 

Missing the real bottleneck in your business process can be a costly mistake. It's like trying to fix a leaky faucet by replacing the wrong part - it just won't work. Always take a data-driven approach to process improvement. This means analyzing your processes carefully and identifying the true bottleneck. Here are some tips to help you do just that:

  1. Don't make assumptions: It's easy to assume that the most expensive or biggest piece of equipment in the system is the bottleneck. However, this is often not the case. Instead, take a data-driven approach and use objective data to identify the true bottleneck.
  2. Analyze your processes: Take the time to carefully analyze your processes and identify where production is being limited. This means looking beyond surface-level issues and identifying the root cause of the problem.
  3. Be open to continuous improvement: Bottlenecks can change over time, so it's important to regularly review your processes and identify new opportunities for improvement. This means being open to change and willing to adapt as your business evolves.
managing remote employees on video call

9. Forgetting About the Customer 

Forgetting about the customer can lead to a disconnect between your people and the product. Many operational managers solely focus on efficiency and end up sacrificing quality. When operations managers focus solely on internal performance metrics, they risk losing sight of the customer's needs and preferences. This can result in products or services that don't meet the customer's expectations, leading to lost sales and a damaged reputation.

For example, imagine a restaurant focusing solely on reducing food costs and increasing efficiency in the kitchen. While this may help the restaurant's bottom line, it can lead to lower-quality food and a poor dining experience for customers. This can result in negative reviews and a loss of business.

Operations managers must establish a close link between operations and other departments, such as product development and marketing. This means working together to ensure the customer's needs are at the forefront of every decision. It's also important to regularly collect and analyze customer feedback to understand their preferences and identify areas for improvement.

10. Failure to Have Detailed Project Planning 

Failure to have project scopes is a big operational mistake because it can lead to missed deadlines, wasted resources, and a loss of revenue. Without a clear understanding of the project's goals and objectives, teams can become disorganized and lose sight of what they're trying to achieve. This can result in projects that are over budget, behind schedule, or fail to deliver the desired outcomes.

For example, imagine a software development team that starts a project without a clear project scope. As the project progresses, the team realizes that they've been working on features that weren't actually necessary, resulting in wasted time and resources. This can lead to missed deadlines and a loss of revenue if the project fails to meet the client's expectations. Effective project planning involves breaking the project into smaller, manageable tasks and assigning them to team members based on their skills and expertise. It also involves setting realistic deadlines and regularly monitoring progress to ensure the project stays on track.

presenting business plan and strategy to team

11. Operating Without Metrics 

Metrics act as guiding points, steering you in the right direction. Metrics are essential for businesses because they provide a way to measure performance and identify areas for improvement. Without metrics, businesses risk making decisions based on assumptions rather than data, leading to costly mistakes. This can lead to wasted resources, missed opportunities, and a loss of revenue. Additionally, businesses that don't use metrics may struggle to identify improvement areas and fall behind their competitors.


Businesses need to focus on the right metrics. Some important metrics to consider include:


  • Sales: This metric measures the total revenue generated by the business. It's important to track sales over time to identify trends and adjust strategies accordingly.
  • Customer satisfaction: This metric measures how satisfied customers are with the business's products or services. It's important to regularly collect customer feedback to identify improvement areas.
  • Employee satisfaction: This metric measures how satisfied employees are with their jobs. It's important to track employee satisfaction to identify areas for improvement and reduce turnover.
  • Efficiency: This metric measures how efficiently the business is operating. It's important to identify bottlenecks and inefficiencies in the business process and address them.

Wrapping It Up   

Operations are the foundation of your business that will determine its success. Business operations allow businesses to stay competitive in today's fast-paced market. By continuously improving processes and adapting to changes in the market, businesses can stay ahead of the curve and maintain a competitive edge.

Don't let these operational mistakes hold your business back. Take the time to analyze your processes, prioritize the customer's needs, and focus on the right metrics. With these strategies in place, you can achieve success and take your business to the next level.