Don't be a Victim of Your Own Success

A couple of years ago I was hired to do a transformation of a janitorial company into a total facilities management firm. The company had been around for well over 30 years. The company's ‘market leader’ success was attributed to a significant number of government and private maintenance contracts. However, they were bleeding money, losing market share and brand appeal. There were several instances of cashflow issues, overdraft maxed out and a too often inability to pay the entire 600 plus staff on time. The owner wanted to stop the hemorrhaging and asked me to identify the problems.

Part of my analyses suggested that the company was suffering largely from classic signs of 'Too Big to Fail' syndrome. A phenomenon that affects many long-standing, large successful businesses that face a downturn.

While our own businesses would be considered micro, I thought that you might find some of the findings useful, if only to guard against the same occurring as you scale up your business.

1. Nothing Wrong Here. When you are the market leader you begin to believe that you will always be on top and that you are untouchable. There is a tendency to minimize any issues as trivial. To discount any criticism as irrelevant. The business fails to recognize that the market is changing and that the old ideas are no longer relevant for growth.

2. We have always done it this way. There are several systems and procedures that are no longer relevant, yet they remain in existence. Despite the unsuitability of some of the present approaches for the current day, no one steps forward to reengineer or reinvent the process. For instance, why are there so many manual book-keeping systems which could easily be rolled up into a more efficient and effective accounting package?

3. Fear of Change. Change makes the old way of doing things obsolete in many instances. Typically, staff unwilling or unable to change resist new ideas because they fear that they would be made redundant. Instead of pacifying those fears, they are allowed to fester causing, the very solutions the business needs to be undermined by the old ways of thinking.

4. Illusions of Grandeur. You fail to recognize that your business no longer commands the power and respect that it once did. In times past you could have picked up the phone and got a new line of credit without question. Now the bank manager asks you as the CEO to make an appointment and bounces your major supplier checks without even the courtesy of a phone call.

The message is that we

• must not become complacent and constantly be aware of our environment.
• must not be arrogant but instead, encourage and support new innovative thinking
• be willing to discard our old models of doing business and reinvent ourselves
• must be willing to interrogate our systems and procedures
• must be able to accept the reality and do what is best in the interest of the business and the people it serves

Ultimately, by remaining vigilant, open to fresh ideas and not allowing complacency to step in the challenge of being a victim to our business success could be avoided.

Can you see any parallels to your own business?

Hugh