Is Part Of Your Business Broken?

Jack Welch, GE’s famous CEO and the major media’s business guru of the decade, believes that “facing reality” is one of the most important “rules” of successful leadership. I agree. Many of the most gratifying and rewarding business experiences of my career were born with the recognition that things had gone awry. You begin with the uncomfortable realization that something is wrong — the guy you spent so much time and money on is not doing his job well, the product you had complete confidence in is a long-term loser, the effort you are putting into your own projects is unproductive or misdirected — and then you make a change. But between recognition (the Greeks called it anagnorisis) and change comes responsibility.

I know executives who like nothing better than to find the flaws, cracks, and breaks in every business activity they rub up against but are never willing to do anything about those problems themselves because they don’t believe they are responsible. (Actually, I know people who do this on a personal basis too — also very annoying.) Many years ago, JN and I spent $175,000 launching a magazine on state lotteries. It was when lotteries were proliferating and everyone was talking about them. We were sure our publication would work. Although the initial marketing results were mediocre, we refused to see the writing on the wall and decided to push the project forward.

By explaining away reality, we assured ourselves things would improve. “It should have been better because …” was a common sentence starter. What happened — of course — was that the $175,000 loss became $250,000 and the $250,000 became $400,000 and month after month our losses mounted while we told ourselves stories and created clever reasons to refute reality. When the red numbers pushed into the seven-figure zone, we tapped out. I never made such a big mistake again, but I have made mistakes just as stupid.

Several have involved people — friends, family members, and/or colleagues whose business weaknesses I refused to see until they had screwed things up and lost heaps of money. Several more have involved hopeless situations — deals or management structures that couldn’t possibly work — that I’d ignored too long. By contrast, some of the best memories I have involve recognizing reality quickly and taking immediate action to correct whatever problem existed. In fact, I’ve made this a formal aspect of my recommended management protocol: At least twice a year, take a hard-nosed look at results vs. budget and make decisions — radical if necessary — to fix anything that appears to be broken.

Here’s how to incorporate this important leadership secret into your business plans …

1. Recognize reality as soon as possible by studying the numbers, talking to customers, and comparing what you find to what is being projected.

2. Realize your responsibility to change what is wrong. Even if it isn’t part of what’s been asked of you, accept the challenge to improve things.

3. Respond radically. In most cases, you won’t be able to solve a serious problem with half measures. When you recognize that something is broken, that means what you’ve been doing thus far (your reality) needs changing. Real changing, not tweaking.

4. Respond rapidly. The best-laid plans are not ruined by malicious intent but by procrastination. Once you know what’s wrong and have a plan to fix it, don’t give in to the temptation to enact the plan “later on.” Change is uncomfortable, and your employees will resist it. It is also uncertain — your solution may not work at all. None of these are good reasons for delay. Facing reality means fixing reality. The faster the problem is fixed, the sooner you can move on to bigger and better things.