Are you suffering from this disease that can kill your business?
ILLUSTRATION BY RUTH MACAPAGAL
He was a well-respected entrepreneur who had sold all his previous businesses and was now entering an entirely new industry. His goal was to revolutionize that industry but he had limited experience. When he approached me and my team for support, he wanted our help for his national and regional expansion. I sat in a few meetings with his top-level management team. In those meetings, everyone put on a smiley face but I could sense something was off. People were not being honest.
One small hole can sink an entire ship
On the surface, it all seemed destined for growth. But when we looked behind the scenes, crunched the numbers and started to have individual conversations with key executives, it became clear that the actual situation was very different. He was losing money left and right. He invested his money into new business ventures like a kid in a candy store, with no external checks and controls. Nobody told him the truth that if he was to continue down that road, he would soon be bankrupt.
Whenever he had a new idea, people would nod their heads and tell him they would execute and implement it. But they could not. They were already at maximum capacity but nobody wanted to say no to him.
Especially in Asia and even more so in the Philippines, this is a common phenomenon. People are very afraid of higher authority, power, money and status. If you rank high in any one or several of these categories, chances are equally high that your people, including top executives, may not be telling you the truth.
As a business leader, it is not the hours that you put in; it’s the quality of your decisions that counts. But you need the truth to make the best decisions. You can only make the best strategic decisions if you see reality as clearly as possible. Otherwise, you are flying half-blind.
ADD and entrepreneurship
ADD, or attention deficit disorder, is rumored to be the hallmark of a lot of great entrepreneurs. Based on my interactions with the owners of family business conglomerates, multi-generational family businesses and billionaire entrepreneurs, I know that to be true.
This gets us back to some of the most fundamental traits of great entrepreneurs. People often ask me, “What is the common trait they all share?” One of the most common traits is that they share a natural excitement and the drive to build, create, succeed and venture into new territories, conquer new worlds and seize new opportunities that they see.
But an entrepreneur’s greatest strength is often coupled with his greatest weakness. Therefore, an entrepreneur also needs the other magic ingredient that is often forgotten: a system of counterbalancing forces that keeps him or her in check. These are people who see reality clearly and are not afraid to tell the truth; who honestly say what can be done, and what not, and how much is too much; and who honestly tell you if something is not a great idea—even if that idea originates at the top. Otherwise, you may experience some version of the example of the entrepreneur in the introduction, often without realizing it before it is too late.
Why you don’t need “yes” men
I have seen a lot of “yes” men and women nod at every idea the boss had, only to moan and complain about it behind his or her back. In one case, the only one who was brave enough to address the issue of “too many new projects” coming from the president’s office was the sister of the current president of a family business. And she only told that to us, not to him directly. She, too, was afraid.
I will share another example of a US entrepreneur. He is the chair of a family business conglomerate who keeps on adding new projects out of the blue. Nobody wants to say no because they are afraid to tell him the truth that everybody is already stretched to their limits and cannot take on anymore. What is missing is most of all, honest and open communication at the board level about limits; a clear cap on what can be accomplished at any given time, in this case how many projects and key initiatives can be run simultaneously.
Remember the saying: You can have everything you want, but not at the same time. The same applies to any business. It’s not about how hard you row; it’s about the boat you’re in. Laser-like focus is the key to unlocking explosive growth.
Say no to the good to say yes to the great
Most businesses are just one or two major strategic decisions away from breakthrough success or monumental failure. Decisions about focus are painful by nature. You have to say no to the good to say yes to the great. And most entrepreneurs do not want to say no because they naturally get excited about so many things.
The truth is: the more money and success you have and the more your business will grow, the more opportunities you will have and the more attractive they will seem. There will always be exciting new opportunities you could pursue, but should not.
There is a reason why Jack Ma, Chinese co-founder and former executive chair of Alibaba Group, kept steadfastly to Alibaba’s core vision and mission, no matter how many exciting new opportunities to make money appeared left and right. Proper focus, concentration and realistic assessment of how much you and your people can accomplish are the keys to success.
Sugarcoating
In the Philippines, people will often not be honest with you as a leader about how much workload they can take on. They will often say yes to whatever request because they do not want to say no or offend anybody. They will overcommit. This will lead to a situation where projects or initiatives do not get completed. When clients approach us to support them in their strategic planning, we often see that a lot of goals or projects still have the same or roughly the same status as the year before once we dig deeper.
Projects do not get done and you pile up a load of unfinished initiatives. The business moves more and more slowly, just like a man who wears a heavy coat full of stones. He still moves but does not have the agility and speed of a Jaguar. The result? You lose a lot of business opportunities.
As the CEO or owner of a company, you may then falsely deduce that people are not doing their job correctly, but the root cause may be you—coupled with the fact that people do not want to say no to all your new ideas. We have seen this in the region many times, especially in family business situations.
Your headspace
In all of these, there are a lot more things you can lose than time, money or business opportunities. Most entrepreneurs do not factor in the enormous opportunity costs and mental headspace their new projects occupy, especially their pet projects, defined as “exciting but not (yet) or maybe never making money.”
Your goal is to build a culture of meritocracy, where the best ideas win. Your ideas are no exception to this rule. They should undergo the same level of scrutiny as anyone else’s. Submit them to a neutral assessment of validity before ever being executed. INQ
Tom Oliver, a “global management guru” (Bloomberg), is the chair of The Tom Oliver Group, the trusted advisor and counselor to many of the world’s most influential family businesses, medium-sized enterprises, market leaders and global conglomerates. For more information and inquiries: www.TomOliverGroup.com or email [email protected].
