What kills a business? Is it a numbers thing?


Why do businesses decline and die?

Is it because of the economy, money, people or simply because it is the end of their life cycle? Is it because they are behind or ahead of the curve? Could it be because of human behaviour and attitude?

There are business analysts who believe it is. Some say the biggest single factor in the demise of businesses is EGO.

In today’s difficult, complex, uncertain, unpredictable, technology driven business world you need all hands on deck.  The enterprise needs the talents, creativity, innovation and commitment of every staffer and contractor on its payroll.

Harold M. Schroder identified ten competencies needed for high performance leadership. 

They are:  

The thinking competencies (information and conceptual competency, conceptual flexibility

The learning competencies (Developing competency, interpersonal and cross-boundary learning)

The inspirational competencies (Purpose and confidence building)

The action competencies (Proactivity, achievement)

No single CEO, no matter how brilliant, knows it all and has all the leadership skills in abundance. Apparently scores of 4 out of 10 are considered normal and 6 and any more exceptional.  The liberating insight is that no CEO or leader has to carry this burden of having to be smart at everything.  That is why you have teams and boards that have these competencies – collectively.

CEOs or executives with an ego are more interested in talking and instructing than listening, more sure about the answers rather than asking the right questions. They often discard valuable practices and tools and introduce new ones without investigation and enquiry.

This “know it all” culture makes people with good ideas, who see opportunities or trouble coming shut up. That is both dangerous and a sad waste of the expertise and experience inside every organisation.

In his latest bestseller David and Goliath: Underdogs, Misfits, and the Art of Battling Giants, challenging author Malcolm Gladwell agrees with Canadian psychologist Jordan Peterson’s big five entrepreneurial personality traits: openness, creativity, conscientiousness, diligence and being disagreeable. (Not requiring the social approval of their peers). He adds: “I realize now that an effective leader or manager can come in a virtually infinite number of forms”.

But being disagreeable is not the same as having an ego.

Two case studies lend credence to the theory of ego as a business killer. Earlier in his career a director of many companies and now advisor to businesses was responsible for opening a new mega store for a retail chain with billions of Rand in turnover. The new CEO arrived, asked no questions, issued instructions for an hour and then issued instructions to repaint the ceilings in a slightly different hue, days before opening! The company was ultimately sold for a nominal pittance.

Some years later: A mega retail chain with national outlets and billions per year in turnover develops a powerful customer data system linked to a buying card. This provides rich and valuable information about customer preferences and buying patterns.  It is gold for marketing, promotional and customer relationship uses. Even research companies want the data.

An erstwhile boss, who had been out of the trade for some years returns, takes over and dictates. He ditches the system unceremoniously and without consultation– just because he knows what is needed and because he can. This is but a symptom of an ego problem that heralds a slippery slope, stars leave and others do the tortoise thing. The company is no more.

Being decisive, strong, demanding, even unpopular are not uncommon traits of successful business leaders. Those who think all the others are wrong and that you do not need to ask them are difficult to work with.  Those who do not know that they do not know are probably the most dangerous.