Growth Almost Always Requires Change
I’d like to tell you a story about a brilliant designer named Linda who started a firm with two other designers.
While none of the team had any formal training in business or management, they decided to divide the responsibilities among themselves.
Linda, a wiz in design, handled the vision and the strategy; another partner took over the finance area; and the other managed operations.
Their design talent was exceptional. Almost immediately after opening their doors, they landed a Fortune 100 client, which launched their business and solidified their reputation. Their firm flourished for about four years.
Then the market crashed. Business suffered. They lost two of their five biggest clients. They were able to come out of their slump, but suddenly, due to costs and employee overhead, their margin wasn’t carrying the day.
They were no longer making a profit, which left them in a state of shock. As Linda relayed this story in my office on a rainy morning, she confided, “We had no idea this was coming.”
I sat back in my seat. “How is that possible? You don’t go from being a profitable business to a sinking ship overnight.
There had to have been warnings along the way—signs and metrics.” She shook her head. “I really don’t know.”
I rested my elbows on my desk and looked at her thoughtfully. “Who’s your CFO?” “One of my partners.” “But I thought all of your partners were designers.”
“He is a designer,” she said. “So what are you telling me?” “He’s a designer, but he also manages the finance side of the business,” she replied.
“So he’s not really a CFO,” I corrected. “Well, he fills the role,” she replied with a shrug. I nodded. “Perhaps it wasn’t a bad idea to have him fill the role when you were a $2 million business.
But with a $9 million business, that kind of decision sets you up for failure.
“He clearly missed the boat. There had to have been red flags a year ago, and he was blind to all of them.”
“We’ve really never measured anything,” she admitted. “Then how did you expect to know if something was wrong?”
I asked. This question left her speechless. “I … I don’t know.”
“Why didn’t you hire outside experienced financial managers?” I asked.
“My partners believe they are really smart. We never saw a need to bring outside people into the business. We assumed we were doing fine.” “They obviously weren’t smart enough,”
I replied. “I’m seeing a habit arise here: a habit of not wanting to face reality, a refusal to keep your eye on the ball, and maybe even a case of I’m The Smartest Person in the Room Syndrome.”
“That can be a habit?” she asked. “Oh, yes,” I replied. “Habits aren’t just behaviors. They’re mindsets as well.”
When was the last time you took a good hard look at your business and asked yourself…do I have the right people in the right seats to take my business to the next level?
If you’re not sure your business is set up for success and would like to have an open dialog about next steps, don’t hesitate to reach out to me.
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About Henry Mittelman
Henry Mittelman provides his clients an unbiased clear lens, guidance, sounding board and the strategic counsel to effectively implement the appropriate procedures, systems and tactics necessary to drive the business forward day after day! Henry is a distinguished member of Forbes Coaches Council, a Keynote Speaker and author of the Amazon #1 Best Selling Book “Get Your BusinessUnSTUCK for GOOD!” www.ceoadvisorypartners.com Phone: 617-901-6159