Let’s be honest here, every business owner wonders if they have what it takes to make the leap from concept to success. Few businesses ever become a “success” and even less business owners have what it takes to keep the dream alive.
For the business owner that becomes a success, how can you tell that point when your past hard work is no longer enough? That the success begins to turn into failure?
Far too often, many business owners lose the success they have worked so hard to build. They get comfortable in their business model and forget that success requires continual growth and innovation. They believe that long term customers will stay forever and that their reputation will over ride relevance. Many times, it is not the business model that kills the business as much as their business owner’s unwillingness to admit that the marketplace around him/her is changing. Here are 5 signs of business leadership red flags that any seasoned (or young) business owner needs to recognize in order keep from going under.
- Failure to recognize issues with the product: As technology progresses, so must products. Your product that was the solution to a problem 5 years ago may no longer meet the needs of its marketplace today. If your sales staff is reporting a disconnect between client’s needs and solutions then listen because they are speaking the truth. Telling your staff to “sell around the problem” or choosing to ignore the issue speaks to the ignorance of leadership. Broken products and unfulfilled client needs equates to lost market share. Face the truth and make improvements where needed in order to continue to maintain and grow your client base.
- Employee assessment is an “F”: Employees are the mirror of entrepreneurship. Want to know if your business is failing? Start with your employees. Often times, staff knows where you measure up short to your competition, fail to inspire or even more sadly, motivate your staff to look for another job. Think of employees as the State of the Union for your company. If you listen with an open mind to the potential that the business has issues you might need to improve upon, then you are well on your way to go From Good to Great.
- More money means more poor investments: Where are you investing your revenue? Do you re-invest in your team? Are you marketing your company? Are you investing a portion of your revenue in the community around you? If your revenue stream is finding its way into your personal pocket then it might be time to re-access what type of leader you are. Don’t get me wrong, I love to make money and believe in paying myself. I also realize that I need to put money back into my team, donate time or resources into others around me. If business owners stay mindful of where and how money is impacting the lives of clients, staff and community then they will stay more aware of the overall health of their business. So many young business owners get caught up in enjoying the cash flow that they forget to put money back into a growth based model. Cash based living is like having a “flash in the pants”….it feels good for a moment, but long term you lose out.
- Elephant hunting will get you killed in the jungle: Is your business model based on the 80/20 rule? Some businesses operate under the 80/20 rule model and for them, it is a sound model. The concern comes when companies put all of their faith in 4-5 contracts and ignore the smaller clients. They “elephant hunt” and in the end the business ends up being the one that takes the bullet. Yes, they land a few large contracts, but these contracts run them into the ground from an operations expense perspective. Eventually clients leave and take their retainers with them. If your business has a scalable model or your largest number of clients falls into your “average” client contract size then your business has a sound growth model.
- Mama always said “keep your mouth shut and your ears open”: Do you have clients that you argue with on a regular basis? Does your spouse tell you that you don’t listen to them or keep nagging about the same issue in your relationship? Maybe multiple employees find themselves sitting in your chair asking for the same things…over and over again. Listen up…you don’t listen! You have lost your business to your ego and ego doesn’t care about your wallet! Listen to everyone…and I mean everyone. Listen to people who are trying to get your business. Listen to what your competitor is saying. Listen to your employees. Listen to your partners. Last year I spoke to a prospect who was convinced that they did not need to put any money into marketing. The CEO felt that his client relationships were strong enough to keep his business thriving. His growth model? Word of mouth only. The outcome? I have watched his market share slip tremendously in the past year. I can tell you that one contributing factor was his mouth flapping about how great his company was and how he did not need to put any money into growing his market share.
A thriving growing business with leadership that inspires employees to fight to be the best is made up of a senior management team that realizes they don’t always have the right answers. Success in a company reflects a CEO’s willingness to grow as a leader. Be open to change, feedback and innovation and see your company grow by leaps and bounds!