Imagine if someone was rushed to the Emergency Room of a hospital with severe symptoms of something wrong and then decided to tell the doctor that that it was no big deal and then selectively shared information about their true physical state. You would think this person was being irresponsible with their health. This happens all the time in business. Leaders let their pride and ego get in the way and it prevents them form being forthright and honest at the very time they need to be. I’ve seen many a business go down the tubes that didn’t have to because the leader was slow to act, slow to ask for help and unwilling to face reality. Avoidance rarely works in business or life.
I’ve learned to listen skeptically when I hear someone say “it’s no big deal” or “we’ll be okay” or “failure isn’t an option.” Just like a body has vital signs you check to get a baseline on someone’s health, a business has key performance indicators that signal something is wrong. If the number don’t add up you are in trouble. Your pricing and business model must reflect market realities. You can only operate so long with negative cash flow. Continued growth and investment without any real profit just digs a deeper whole. You can’t continue to spend more than your earn. At a certain point, some debt loads become unbearable. It really is quite simple.
As the owner of a company that has been around for more than a few years (start-ups are excluded) if you have to put your own money into a business to keep it solvent than there is a major problem with your business model. Of course, there may be extraordinary situations where this could happen but it should be the exception not the rule. If a bank won’t lend you money or extend your line a credit when needed, you should take a step back and reflect upon what you are doing. Sadly, I’ve seen individuals lose all the wealth they have saved over a lifetime trying to bail out a business that was in crisis mode or unsustainable. Unfortunately, this happens more quickly than you think.
All businesses hit a bump in the road at some point – it is to be expected. The sooner you see this coming and own up to your circumstances the better. The numbers don’t lie unless you calculate them improperly. The good news is that there are many resources at your disposal once you decide to come clean about your circumstances. More people than you think have a vested interest in your success. It could be your professional advisors, your bank, business colleagues/peers, strategic partners, friends, long-term clients and members of your management team. Most people will want to help you out if you just ask them, cut through the BS and tell them the truth. Sure someone may betray your trust but the risk is worth it and you usually know who these people are in advance anyway and can limit their involvement.
Don’t let your pride become an obstacle to your survival or success. There is a difference between being self-reliant and being reckless. Sometimes you have to risk being vulnerable and letting down your guard. I’ve yet to see a business problem that can’t be solved if you have enough time to solve it and the right people are working on it. The solution may not always be what you want but it will be better than no solution at all or having your fate decided by someone else. Your pride can (and will) get you in trouble if you are not careful.
- Key Performance Indicators (sophisticatedfinance.typepad.com)
- Leading By Example (ivythesis.typepad.com)
- SMEs: How to weather a recession (xlntelecom.co.uk)
Filed under: Business, Your Actions, Your Decisions, Your Leadership Role | Tagged: asking for help, business, cash flow, ego, leadership, management, numbers don't lie, Performance indicator, pride, survival, truth, vulnerable |