Most entrepreneurs have several characteristics – among the more prominent is a level of confidence – some would say arrogance – that enables them to believe they can beat the odds when taking a risk and win. Most of them are pretty good at what they do – they are competent at a trade, skill, craft or they have a novel idea that can be monetized.
In the early years of their business, the entrepreneur wears many hats – marketing director, product development, CEO, Controller and so forth. But as the business grows and expands, the entrepreneur is tested in ways that MBA programs can’t teach: either the entrepreneur has the maturity to develop alliances (both inside and outside his/her business), deal with conflict, develop trust and make wise decisions or s/he doesn’t. The personality – the character – the personal dysfunction of the entrepreneur will likely dictate the overall success of their business.
If you’re a business owner, then check yourself against these eleven danger signs. If you see three or more of these danger signs in your business, then you need help. Five or more and you need help right now.
As your success become obvious to all, your business becomes more and more about you, the Founder.
Yep – when you started out – you were customer focused. You were customer centric. But over the years, you’ve made money, you’ve won awards, you’ve gained public recognition and notoriety and you’ve heard the praise – really heard the praise.
So you start using your business to create perks for yourself: tickets to sporting events that are not business related, massages, golf lessons, a new car, personal vacation written off as a business expense, new toys, larger office – all if it contributes to the perception by your employees that your business is now about you.
Most decisions route through you – even minor ones.
This “all about you” isn’t limited to your financial success. You begin to think that no one can make good decisions, so decision-making in your company becomes all about you. Your micromanagement pushes employees underground who end up doing only what they are told to do – confirming your suspicion that they are substandard talent. When you look at all the people you’ve hired, you don’t have one single leader who can manage your company or even part of your company. Not one. You don’t understand that you’ve gobbled up all the leadership in the organization and have stifled your employee’s development.
You don’t take responsibility for the outcomes of your company – unless it is success – then we’re back to “all about you”.
When a project fails or a customer is let down by your staff, you view the outcomes as a failure of your team or managers, but certainly not a failure on your part. You never “connect the dots” between your leadership style and micromanagement to the results your managers generate for you. You simply don’t see the connection. Others see it – but don’t say anything to you.
You don’t pay attention to cash – only profit.
In every turnaround with which I’ve been associated, the owner lost control of cash. The owner only paid attention to the profit/loss statement. S/he didn’t know how to read a balance sheet and certainly didn’t bother to have a cash flow report generated. They have no way of tracking future cash expenses – they have no “headlights” into the future about the financial performance of their company. They just keep doing what they have always done, but expect better results than before.
You don’t pay attention to expenses.
You simply don’t take time to learn about how cash exits your business, so you assume that you’ll always have the cash to pay your bills. When you’re suddenly told that you can’t meet payroll, you wonder how it happened, and true to form, you blame someone else for not seeing this train wreck coming. You don’t connect your excessive, personal spending on your lack of cash, because, after all, the business is all about you and should support your (seemingly meager) perks.
You avoid conflict.
You let others stew in their conflict with you, but you act as though nothing is wrong. You tick off employees, partners, customers, vendors, but you act as if nothing is wrong. These people keep working for you, but they are probably looking for new employment. You’re surprised when they turn in their resignation.
You lose track of industry changes and your products become stale and outdated.
What got you to the party is now being challenged by competitors, but you don’t see it. You might resent that these less experienced people are challenging your leadership position which you’ve built over time. “They won’t last”, you think. But then you find out one, then two, then three, then more of your customers are leaving for your competitors. You don’t stop to take stock of your company, your products, your customer relations. Nope. You just blame others and grouse about how these customers will come back once they have had a bad experience with your competitors. But they don’t come back. And that’s because your competitors probably have a better product, a better service or a better price point.
Your debts are mounting, but you don’t see this as a problem.
Because your top-line revenue is probably increasing, you don’t see your mounting vendor or bank debt as a problem. So if you’re going into more and more debt, then ask yourself: where is that money going? If you don’t look into this, mounting debt will kill your business and put you into bankruptcy.
You’re an island – you trust few others, if anyone at all.
You just don’t see how you can learn from others in your industry. You don’t have a group of trusted advisors. You make all the decisions, so you must have all the wisdom, right? You don’t need consultants – they’ll just waste your money and time. They’re worthless – nice guys – but worthless when it comes to helping your business thrive.
You incur unnecessary expenses just to lower your income tax bill.
You’re willing to spend $100 on an unneeded expense just to lower you tax bill by $30 – $35. And you think this is a smart decision.
You burn bridges with competitors and industry contacts.
You view competitors as your enemies – people who need to be defeated in business. While you don’t with them personal ill, you don’t hope to beat them in business by takin more and more market share away from them. If industry associations don’t do what you want, you start your own association. If partners end their partnership with you and go with one of your competitors, you start a business to compete with them. It’s as if you’re a salmon who is always swimming upstream, never able to stop, but spending more and more cycles while achieving less and less success.
You can’t retain top talent
You keep hiring good people who want to do good work, but after a year or two, they leave. Their reasons for leaving are usually different – there isn’t a common thread in why they leave. But they always leave – they don’t stick around. Perhaps your on your 4th CFO in as many years. Maybe your sales managers seem to last between 9-12 months – then they take off. Or perhaps your top technical talent seems to find higher paying jobs elsewhere after working with you for a few years. While some transitions are inevitable and good for your company, too many transitions of recently-hired top talent should indicate to you that your business is headed in the wrong direction. You’ll likely need outside consulting to help you figure out this problem.
If you want to really be successful in life, you’ll take some time to look at yourself and gauge if this article, at least in part, describes you and your business. If it does, then ping me at bill.english at theplatinumgrp.com.
Bill English, Publisher
Bible and Business
