There is no place in business for fantasy. That may seem obvious, but we are all familiar with leaders whose self-deception deteriorates into delusion, either ignoring problems at hand or believing in the permanence of success. One such business owner, who became a client of mine much too late in the game, paid dearly for his refusal to accept the realities of his choices and the market.
Earlier in the life of his business, Mr. Ross had experienced enormous success. During this season of profit, Mr. Ross lavishly purchased a ranch and an airplane hanger (to support travel for meetings and client entertainment). These new assets were not only extravagant, but were backed by the business and thus intrinsically tied to the company. To put it concisely, he over-leveraged.
As you can imagine, the company didn’t maintain their lucrative growth, and these assets became a drain on the company. When the bank started asking questions about the loan covenants, Mr. Ross became stubborn, defensive and wildly uncooperative. His refusal to accept reality, unsurprising, resulted in the bank not only seizing the ranch and the hanger, but legitimate business assets as well. Mr. Ross’s deluded decision-making permanently devastated the business and his personal finances.
Healthy leadership, then, must be firmly grounded in the two-fold truth that (1) problems are not temporary and (2) success is not permanent.
Problems are not temporary.
Very few issues spontaneously resolve themselves, so ignoring or dismissing problems is not an option. It is our job as leaders to be proactive and intentional problem-solvers. Have the humility to admit mistakes, to acknowledge problems, to seek outside help, and to change established systems. We cannot stick our heads in the sand.
Success is not permanent.
As a seasoned business owner, Mr. Ross should have known that the only guarantee in business is that there are no guarantees. You can certainly celebrate success and leverage it on behalf of business growth, but stay diligent. Be a student of your success: do the work to find out what choices and strategies preceded your growth. And most importantly? Remain skeptical of success. The market can be fickle, and you want to set yourself up for stability no matter what’s around the corner.
Ask yourself and your team:
- Where are we depending too heavily on market favor?
- What problems are surfacing that we haven’t attended to?
- Were the market to drastically change tomorrow, what current choices would we regret?
