The 7 Deadly Sins Strong Organizations Avoid
By Cheryl Conner, forbes.com
When you observe great businesses and poor ones, it is sometimes the intangibles that differentiate the weak from the strong.
What do bad companies and employees do that causes careers and ventures
to fail? As we look a little deeper at those who flounder consistent
behaviors appear. See how many of these offenses you recognize:
1. Fluffy Accounting. Whether an organization is
small or large, even experienced entrepreneurs can use notoriously bad
logic where money’s involved. It’s as if there’s a mental measuring
gauge that compels some executives to believe the more money they
command and expend, the more they’ve accomplished. Fluffy accounting
refers to dodge and weave justification for decisions made on any other
rationale than hard ROI: “This is worth it because they’re a good
client.” “That’s just the cost of doing business.” “I know there’s no
budget for this, but who can I call in to finish this project?” “It’s
only a few small projects and a 90-day delay. Besides, this is vacation
month.” Smart organizations recognize every resource expenditure counts.
Especially in the current economy, there’s no fuzzy zone where bad
decisions can hide. Strong executives learn that by removing the risk
and making a solid ROI justification for a decision, they can obtain
whatever resources they need, with no need to hide behind fluffy math.
2. Positioning Downwind from Dumb Money. This is a
business strategy of sidling up to a customer organization or department
that can provide your business with a “fat dripping roast.” In the
service arena, hours and billings rack up fast for miscellaneous
meetings and paperwork. Projects aim for the ego of the budget holder
(award entries, personal PR) instead of the strategic goals of the firm.
It is a short-term strategy and ill-fated: When the client organization
is acquired or experiences a significant juncture who’s first to go?
Yep. The jig is up and the dripping roast is now toasted, together with
the costly followers-on.
3. Reliance on Fake-Outs and Lies. Organizational
leader: “Be brazen. If you say it boldly enough, it’s the truth.” No, it
isn’t. Conviction is powerful, but an executive or a company can only
get so far on sheer force of will. Eventually, only strategies that can
be proven out and voices that have earned credibility will prevail. The
crime of lying applies to sales as well: “You are not allowed to
participate in business development,” a former partner informed me.
“You’ll leave money on the table.” Yet our company was recently offered
an ongoing series of projects purely because we are trusted. A state
organization included us on its approved vendor list on reputation
alone, but said that it would be extremely unlikely and complex for any
other agency team to be approved or considered. Moral issues aside,
credibility is good for business and speeds the ability to seal future
deals.
4. Decisions by Ego. I heard someone remark laughingly about
a senior executive, “it looks like his ‘inner child’ is pretty much
running the place.” It was funny, yes, but in too many cases the
observation is true. Some leaders are less motivated by winning than by
the fierce need to not lose and will do anything required, even absurd
or illegal, to achieve the heady experience of beating a foe. Taking out
a patent for a medical breakthrough not to develop a product, but to
block a competitor from expanding or to prevent a competitive threat is
an example of this. One executive contemplated taking out a business
license in another company’s name in the hopes it would block the
competitor from legally operating in the city where their facility was
housed. (She failed.) In contrast, one young founder in our state,
recognizing his limits, proactively attracted and hired his own
replacement and now reports to the new CEO as his boss. “I wanted the
company to succeed more than I wanted to stay CEO,” he said. His
organization has doubled. Yet the business landscape is littered with
the corpses of companies and leaders who were so highly driven by their
egos that they lost sight of their company goals.
5. Leadership by (Bad) Example. “Do what I say; not what I do.” Bad
deeds do not go unnoticed. It may take some time, but leaders who spike
the hypocrisy meter are destined to fail. Their managers and employees
are disengaged, or allow the dishonesty to justify their own bad
choices. The disengagement spurs terrible delivery and customer service.
The service/profit chain disintegrates all the way to the end. But
leaders—even highly demanding ones—who exercise high integrity in their
own behavior can count on loyalty and engagement from their teams to the
end.
6. Premature Declaration of a Fait Accompli. This is
sometimes referred to as the “Microsoft strategy”: Instead of rising to
the summit, you plant your flag at the bottom of the hill and hold a
press conference to announce your intentions and declare the contest
complete. In the early days of technology an announcement of intent by a
large player was enough to hold the competition at bay. But no longer.
In the Internet economy, the announcement of anything less than a near
completed project simply tips your competitors off about where you’re
planning to go. Better to hold the news and celebration until your
project is legitimately very close to complete. Can someone place an
actual order? Until then, it’s not a product you’ve got. It’s merely a
plan.
7. Emphasis on Operations, not Sales. I met the
co-founder of an innovative restaurant in Las Vegas meetings this week.
Peli-Peli, in Houston, has innovated a new variety of “South African
fusion” cuisine. Now five years old, the company is preparing to open a
second location. I asked partner Michael Tran what he and founder and
chef Paul Friedman would do differently in the early years of their
business if they had to do it again. “We’d lead with marketing and
sales, not operations,” Tran said. “In our first years we put our
emphasis on getting everything ‘just so’ in our operational process,” he
said. “Looking back, I wish we’d focused more of our earlier attention
on sales.” Thankfully, the team adjusted early and revenues are booming
today (in fact the team will be expanding to a second Houston location
next year). >>>
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