“Businesses make hundreds or thousands of decisions every year, many of which seem inconsequential. But the smallest details can have business-changing or even business-ending consequences.” ~ Jay Goltz
“It’s generally easier to kill to business than to change it substantially. Organisms by design are not made to adapt; beyond a certain point. Beyond that point, it’s much easier to kill them off and start a new one than it is to change them”: So says Kevin Kelly, author of the book ‘Out of Control’. Resuscitating a failing company is one of the supreme challenges in any business. The operative word is ‘substantially’: What does that mean? Once you have lost touch with your customers, then it’s time to kill off the enterprise.
In the article “How to Destroy Your Business” by Sam Silverstein writes: For a change I thought it might be fun to talk about how to destroy a business rather than build one. Here are a few things you can do to destroy your business. Follow them… Live them… You can file for bankruptcy in no time at all. (If you’re really good you could be out of business in just a few months).
- Treat your staff poorly: Reduce moral and personal satisfaction and you will be amazed at how quickly you can successfully destroy your business.
- Disregard your customers/clients can accelerate this process: Don’t promote your product and service offerings and be sure and send mixed messages about your business focus and expertise.
- Product quality really doesn’t matter: Poor product quality and poor customer services will quickly accelerate the process.
- Spend money and resources: Waste money and resources without getting any return and your failure is assured.
- Apathy works wonders: Don’t just delegate; abdicate. Show up when you want. Leave early. Hey, life is short. Why worry? You’re on the road to destruction!
“Dysfunction #1: Lack of organization, priority, definition, and unity. Dysfunction #2: Broken or never developed leadership vision & management pipeline. Dysfunction #3: Play it safe and hope for the best…”
In the article “Bad Ideas That Can Destroy Your Company” by Dave Logan writes: “The problem with most organizations is that they are governed by mediocre ideas”: Bill O’Brien, retired CEO, made this observation in Peter Senge’s book, ‘The Dance of Change’, and it remains as true as ever. I’m constantly astonished at how bad ideas keep flowing into companies and take root, crowding out innovative thinking, damaging morale and creating enervating cultures of despair.
Why do people cling to weak ideas even when they have such destructive effects? Because they often don’t recognize how ill-conceived the ideas really are. Below are ten of the most common, bad ideas I’ve seen at work:
- Everyone should live by our values (except for a few prima donnas who bring in most of the revenue): There are two problems with this thinking. First, the assumption that people need to be challenged to live in accordance with their values is just wrong. The company values should be the values of the people you actually have, and so challenging someone to live by someone else’s values is both insulting and untenable.
- Great companies are built to last: I have enormous respect for Jim Collins and Jerry Porras, the authors of ‘Built to Last’. That said, our own studies didn’t find companies that were set on the ‘great’ path, and then were ‘great forever’. Instead, we found that ‘greatness today predicts nothing about tomorrow’. Companies are composed of groups of people talking–in person, over email, in meetings, and in formal documents. This chatter isn’t something the company has, it’s what the company is.
- When times are tough, the company should temporarily suspend training and development: During tough times, employees (and managers and executives) often don’t know what to do. This is exactly when training and development (done well, not the ultra-lame stuff that’s pre-packaged and devolves into simple and useless steps) can make the difference. Even more important, this is when company leaders are judged.
- The main purpose of the company is to earn a profit, or conversely, the purpose of the company is to do good in the world: A corporation has many of the same legal rights as a person. It can own property, it can hire employees, and it can enter into contracts. So let’s extend the metaphor further. A person who says his sole purpose in life is to make a lot of money is a lot like the ‘greed-is-good’ character, Gordon Gekko. Likewise, companies can make money and earn profit and also seek to be socially responsible and make a positive contribution to the global community.
- Management is the key to high performance: Management is about systems, processes, checklists, and formulas. It produces, as John Kotter noted, ‘predictability and order’. If you want more predictability and order, then don’t let a leader around your company. Leadership is about alignment, vision, setting direction (again, thanks to John Kotter here), and it produces change, often to a dramatic degree. High performance requires reinventing what the company does (leadership and change) and great management (steps, milestones, deliverables). Management without leadership never produces high performance, at least not for long.
- Just follow the recommendations of the latest management books: The problem here is that most management books provide simplistic solutions that are not up to the complex challenges of running a company. What’s needed is thought, debate, and reflection, leading to a collective understanding of what to focus on, and then relentless execution.
- Incentivize people to boost performance: Do ‘x’ and I’ll give you ‘y’ doesn’t make people do ‘x’, as least not for long. Adding more ‘y’ only gives people a bigger badge of honor for not doing it. Some groups (like most salespeople) will respond to the ‘x’ and then ‘y’ formula, but that’s because the system plays to their values. And that’s the point. Instead of approaching employees like hamsters who want more and more food, you have to get to know the people you work with as individuals, and discover what they value. Build jobs around their core commitments, and pay them so that its fair, and you’ll get good performance. Ask them to work against their values for lots of extra cash, and you’ll make them feel like prostitutes.
- Streamline operations to make the company more competitive: Streamlining alone is not likely to make a company more competitive. Greater competitive advantage requires knowing the market, the changing tastes of customers, the price points of products and services, and then finding a value proposition that’s good for customers and for the company.
- Just create a new strategy, and employees will feel empowered to implement it: The fundamental problem here is that the two things; ‘plan for change’ and ‘employee empowerment’ are at odds with each other. Planned change relies on a command: Do this because I said so. Empowering employees means enabling workers to find their passion and act on it. So this whole notion of empowering employees to implement management’s strategy is just double talk. What’s the better idea? Start by listening to what everyone wants–customers, employees, suppliers, and partners. Then put it all together so that when you announce the new strategy, people say ‘that’s right!’ Of course they say it’s right–it’s their idea, packaged with other ideas and weighted against what makes sense for the business. Then you don’t have to ask people to be empowered, because empowerment is baked into the strategy.
- Companies need to focus on doing what made them successful in the first place: This is the death wail of a company just before it stops breathing: We’re not succeeding, so we’re going to return to what made us successful a decade ago (or more), only we’re going to redouble our efforts to get it right this time. What a company should never change is its core identity. Its operations, strategy, and everything else needs to not just change, but radically reinvent itself every few years, or else the competition will put it out of business.
Companies are portrayed as victims of circumstance: Economies fail, markets change, disruptive competition, globalization… A business failure is a failure of leadership, before it’s a result of circumstance. Not a lack of skills, on the part of management, but a lack of imagination. It doesn’t take a genius to destroy a business: It’s not difficult to imagine ways to fail, just follow your instincts if you want to efficiently destroy the business, or avoid them to experience the perils of success.
If your business is no longer turning a profit, remember (the excuse) that it’s the economy’s fault … not that your system of doing business is outdated or broken. Accordingly, your motto should be ‘when the system is broke—don’t fix it; borrow money to keep it going. Someday things will pick up, the economy will improve, and your business practices will be relevant again.’
As successful businessperson knows; the solution for most business problems is selling more! As long as the sales numbers are high, you can do no wrong! Really! Another sure fire way to fail: When your business is facing challenges don’t panic; just sit and wait…and run the business as usual…and things are bound to get worse. We’ve been told that every business has two basic functions; marketing and innovation.
If you want Chapter 11: ‘Do neither and maintain the status quo, which is much safer when times are changing’. Any organization can fail, and some are better than others when it comes to destroying a business and failure …but don’t panic; somewhere in the world someone is doing a great job at screwing-up a business and preparing it for failure…
“Businesses fail not because they do things the wrong way but because they do the wrong things”. ~ Peter Drucker