Wanted for Killing Business: Bad Managers
by Leon J. Owens
As a “seasoned” consultant with decades of experience dealing with business managers, I’m frequently confronted by desperate business owners wringing their hands muttering “I don’t know what went wrong.”
When a business is headed toward catastrophic failure, there are a number of possible reasons, including general economic downturns (remember 2008?), disruptive technologies (anyone used The Yellow Pages lately?), and lack of adequate capitalization (starting on a shoestring often means tying yourself in knots). But the leading cause of business failure is rarely discussed or admitted to: poor management.
Let’s face it, pulling a business back from the brink of failure is an art. The task of recovery is all the more difficult when we fail to admit the underlying cause of most problems is simply incompetent management.
Management historian and writer Morgen Witzel points to The Seven Deadly Sins of Management at the foundation for the operational and strategic incompetence that foreshadows the failure of many businesses large and small: “arrogance, ignorance, fear, greed, lust, linear thinking, and lack of purpose.”
In his book Managing for Success: Spotting Danger Signals, Witzel describes the corrosive effects of those deadly sins as they have brought down businesses as substantial as Ford Motor Co. and Lehman Bros. He points to management’s obsessive focus upon spreadsheets and the failure to understand why a particular business is even in business as the leading cause for business collapse. And when an enterprise does fail, those by-the-spreadsheet MBAs behind it all are frequently both the reason and the scapegoat.
My experience working with every level of business difficulty—whether it was the turn around of a major Hollywood motion picture studio or the failure of a sole proprietorship to anticipate inventory needs—bears Witzel’s concepts out. I cannot tell you how many times I have met with business owners who simply refuse to change their process simply because “that’s the way we’ve always done it” in the face of losing all their inventory to creditors’ claims. I’ve sat with general managers who demand “better numbers” in a business that underpays key employees and fails to maintain a loyal staff, simply because they don’t understand that human capital is often the only asset of true value.
Business—like Life itself—is a learning process. The job of the Real Estate Matters team is to guide management toward a greater understanding of their own shortcomings (if they were good at running their business, they wouldn’t need our services) while teaching managers and owners how best to correct them…and ultimately succeed.