A company was stuck in a vicious cycle. The company delivered orders late. Customers did not pay right away for deliveries received, citing the tardy arrivals of their orders. The ensuing tight cashflow caused delays in purchasing and importing critical raw materials. Manufacturing could not make products on schedule. Logistics, therefore, could not deliver pending orders on time, which brought back the company to the problem of delivering orders late.
Because of the draining cashflow and growing debts to creditor banks, the company decided to stop production, downsize the organisation, and switch to trading, which was to import and resell finished products.
The company’s business improved somewhat in the years that followed the owner’s decision to scale down her company’s operations. Life was simpler with trading, but the company was far from reaching the revenues it once had when it was into importing raw materials and converting them to products it sold to a bigger market.
The revenues the company could have reaped if the owner decided not to reduce operations are what we could call lost opportunities. A lost opportunity is a favourable circumstance which an individual or enterprise had missed or did not take advantage of.
The company’s owner felt it wasn’t worth it to manufacture products and sell them to a broader market. She couldn’t handle the challenges of the operations, in which her company was trapped in a vicious cycle of poor productivity.
The owner faced serious problems, and she decided to avoid them, instead of solving them.
Many enterprise executives had done the same thing the owner did. When faced with crises, executives resorted to reductions in head counts, closing facilities, and eliminating product lines. They opted to skirt the problems rather than solve them.
There’s no such thing as a bad decision especially if it results in the survival of one’s business. There are lost opportunities, however, when one decides to avoid solving challenging problems.
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