Hey all, I just wanted to post the essay below for the reading pleasure of anyone out there that is looking for some inspiration in any aspect of their lives.

This concept was brought up at work, by way of an email from our Sr. sales manager, expressing what we, as a team, and as a sales organization need to do to continue the successful run we’ve enjoyed over the past few months. The reason being, is that this month we are behind. Looking at our activity as a whole, it’s not hard to see that we have been “resting on our laurels” so to speak. Steps have been taken to increase our activity levels and to stimulate an atmosphere of urgency and excitement by all of us in the past week now and behold! As if by magic, we are back on track.

Then, I thought about it on another level.

Since 1/1/2007, I have made some major changes in my life that desperately needed to be made. I attacked them, as I often do, with a passion and gained ground. I got to a place where I was happy with my progress… and (as I often do) I stopped. From that point on, I have fallen into a slump and have now gotten to a point where I feel so crappy and guilty about it that it’s all I can think about.

In this case I am talking about my goals involving my health, specifically my weight. This ties in so heavily with all my other goals, and to and extent, every aspect of my life, that it must become my major focus this year. At least to where it starts working for me and more time opens up for other goals. For example, work has been going well for me now that I am a “veteran” and am up to speed. Now that it doesn’t require most all of my time and attention, I can keep it working for me. I can move forward easier with some time and energy to devote to other pursuits.

So again, I thought I would share this essay. I know it’s about why businesses often fail, but it’s much more than that. This applies to you as a person as well. I hope this motivates you if that is what you need. You are the Boss of your own “business” anyway right? It’s the same thing really.

Why Successful Companies Often Fail

By Edward D. Hess,
Distinguished Executive in Residence and
Adjunct Professor of Management, Goizueta Graduate School of Business
Emory University
Atlanta, Georgia

http://www.edhltd.com/successful.htm

We all know the general statistics that most companies, ~ 70% fail within five years of start-up. Why? Many companies fail because of deaths, illnesses, divorces, loss of a key customer or supplier, inadequate capitalization, or failure to attract enough profitable customers. Let’s assume you made it through the start-up phase and have reached a successful level of greater than $5 million in revenues.

YOU CANNOT STOP!

Based on my 30 years of working with growth companies, many successful businesses fail because the business builder loses his or her focus, intensity, and passion for managing the details of the business on an everyday basis. Businesses decline because the entrepreneur quits doing what he or she did to make the business successful. This occurs because of fatigue, boredom, laziness, or arrogance.

Operating at a high level of intensity and focus every day for years is hard. It becomes harder as you achieve some success. Entrepreneurs are human, too, and they can become bored, lazy, or tired. Unfortunately, when owners lose their intensity, passion, and focus; employees see it, feel it, and consequently, employees lose their intensity and focus, too. This is the paradox of success. To stay successful, you cannot stop doing what made you successful. Success is never a permanent state.

Having the business lose its edge is bad enough. But sometimes, the decline does not end there. What do entrepreneurs do when they get bored? They may miss the thrill of a challenge or they may miss the emotional high of living on the edge. So some do unwise things to regain the thrill – they diversify. They diversify either the business or their personal life – or both. Acquisitions, territorial expansions, new investments, golf, horses, or an active social life are all possibilities. All of the above are not necessarily bad; it depends on the circumstances. If they take more focus, time, and capital away from the core business, they may hasten the decline of the core business. Destruction of value can come from losing your edge. It comes much faster when you diversify and dilute your efforts. “Stick to your knitting” is not bad advice.

STAYING SUCCESSFUL IS HARDER

To stay successful, you cannot stop doing what made you successful. Staying successful is harder than becoming successful. Let me make sure you understand what I am talking about. I am not talking about a successful entrepreneur who gets tired or bored, and as a result, makes a conscious life choice to exit the business and reap the value he or she has created before the business slides or plateaus. I am also not talking about an engaged entrepreneur who grows the business by expansion or acquisition. I am, however, talking about a successful entrepreneur who gets bored and instead of facing that challenge directly, decides to diversity his or her business or personal life and, as a result, begins to destroy the value he or she has created.

How do you avoid destroying the value which you worked so hard to create?

1) Recognize the Problem – Be honest with yourself and deal directly with boredom or tiredness, or arrogance. As soon as you lose your fear of failure and start feeling comfortable, you should look for warning signs, e.g., starting work later; leaving work earlier; taking longer lunches or having a beer or glass of wine more frequently at lunch; working four days a week; and losing patience with employees more often. Having recognized the problem, what can you do?

2) Change the Game - Recognize that you will get bored and your employees will get bored. People need new challenges. You, as the leader, have to change the game frequently – redefine the goals. Change what is measured. Look at what Jack Welsh did at General Electric. He changed the goals at GE; he changed what was being measured as the company kept improving. He went from measuring being #1 or #2 in every product line to measuring 6 sigma to pushing digitization and then to being a learning company. Every initiative was followed by another new challenging initiative. It is your job as the leader to make work challenging and fun for your employees. Another way to keep the intensity and the game going is to focus on the bottom 25% of your business, those customers or products or divisions or locations that are in the bottom quarter of profitability. And keep rewarding employees for new ways to increase productivity and efficiency.

3) Create A Villain – Make it personal that your competitor wants to put you out of business and your employees out of their jobs. Creating a villain works. Look at the Oracle, Sun, and Microsoft competition. They fight each other in the marketplace like cats and dogs.

4) Create a Check and Balance – Have independent, objective board members or advisors who can tell you, “No, do not do that.” Tell them that their job is to prevent you from doing something really stupid. Create a disciplined business and personal investment review process which is followed rigorously.

5) Find Role Models for your employees in the sports or business world – people who have performed at a high level of excellence consistently for years such as Coach Pat Summitt, Coach John Wooden, Michael Jordan, Nolan Ryan, Wayne Gretsky, Barry Bonds, Hank Aaron, Richard Petty, Jack Nicklaus, etc. Read Sam Walton’s or Howard Schultz’s books about Wal Mart and Starbucks. How did they maintain the edge even after they became very successful?

6) Be Humble – Remember how you got to where you are and who got you there. You cannot expect your employees to stay intensely focused, dedicated and working long hours if you start coming to work late in a new BMW or Mercedes, wearing a new Rolex watch and new designer clothes. I cannot tell you how many times in working with growth company problems, that employees and managers have told me that the leader is not the same person that he or she has changed and not for the better.

7) Every Day Is Showtime – Every day, your employees, your customers, and your family depend on you to do what is right and to do your job. Just as your employees owe you 100% effort every day; you owe them 100% effort every day. Win in the game of business one day at a time. Every day is showtime. Every day is game day.

You and your business will reach plateaus along your business lifecycle. Recognize them, deal with them directly and intelligently. Ask yourself why you are doing something different and make sure it is for the right reasons. You will get bored. You will get tired. You will change as you become more successful. Recognize that this will happen. Plan for it and develop a way to keep the challenge, intensity, passion and fun going for you and your employees. To stay successful, you cannot stop doing what made you successful. If you cannot do that, then find the right valuation and liquidity cycles to exit before you lose the value of what you have built.

Close Bookmark and Share This Page

Save to Browser Favorites / Bookmarks

Ask backflip blinklist BlogBookmark Bloglines BlogMarks Blogsvine BuddyMarks BUMPzee! CiteULike co.mments Connotea del.icio.us

Digg diigo DotNetKicks DropJack dzone Facebook Fark Faves Feed Me Links Friendsite folkd.com Furl Google

Hugg Jamespot Jeqq Kaboodle kirtsy linkaGoGo LinkedIn LinksMarker Ma.gnolia Mister Wong Mixx MySpace MyWeb

Netvouz Newsvine oneview OnlyWire PlugIM Propeller Reddit Rojo Segnalo Shoutwire Simpy Slashdot Sphere

Sphinn Spurl Squidoo StumbleUpon Technorati ThisNext Twitter Webride Windows Live Worlds Movies Yahoo!

Email This to a Friend

Copy HTML: 

 If you like this then please subscribe to the RSS Feed.

Powered by Bookmarkify™

More »