8 Warnings That Your Company is Toast

Last month I reminded you that no big-brand company lasts forever, and few of today’s technology phenoms last long at all. One of my readers emailed to ask if I might dare to note some of the warning signs that suggest company extinction might be zeroing in on your own workplace.

Of course if I knew the full answer to that, I would spend the rest of my career shorting all those imminent losers traded in the public markets. Creative destruction is difficult to see in its earliest phases because it often begins simmering silently in the background when your company is riding a wave of enormous good fortune. Funny how that infecting vulnerability sneaks its nose under the tent precisely when a business seems to be at its healthiest peak.

While the corrosion can be deceptively invisible at first, there are usually festering symptoms we can observe, watching the makings of a crash in slow motion long before opposing forces collide. Here are eight thumbnail questions to help diagnose the severity of your company’s illness and whether it’s likely to be terminal.

What is the company’s R&D budget as a percentage of sales?

If research-and-development spending is declining as your company matures, it’s possible that company is being harvested by its owners as a cash cow. While strong cash flow is an indicator of company health, take notice of how much of your business is being driven by recent successes vs. legacy brands. If new products aren’t breaking, sniff around and see how much of that cash is being invested in next-generation ideas. If increasingly more cash is going to ownership and less to building your company’s future, you may have reason to worry.

Is your CEO surrounded by people who hold the same views of the company’s excellence?

Without gadflies who question everything, you’re likely to keep doing the same things. That could make you a cash cow, a one-hit wonder, or any number of limited-thinking results. Great senior leadership in a company encourages constructive conflict, because no single viewpoint in management can possibly see around every corner or predict a competitive threat. If lots of ideas are flowing, you have a much better chance to reinvent yourselves. Where dialogue is limited and funneling to a singular point of view, trouble is coming.

Does senior management actually use the product or service you produce?

This is the old argument for eating your own dog food. If the people who make and sell something only talk about why it’s great rather than obsess over what will make it even better, it’s likely to stay the same. If there is cynicism around your success and products become passionless widgets, customers will see that soon enough. Your customers can’t reinvent your products, just reject them. If you’re not a fan of what you’re doing, why should they be?

Does senior management regularly sample, investigate, and dissect competitive products?

If you think what you’ve got is the best and don’t even bother to see what could soon be eating your lunch, your lunch will soon be eaten. Be paranoid, be aware of everything competitive, commission and dissect research, never be comfortable that your moat is impenetrable. It’s okay not to use your competitor’s products day-to-day. It’s not okay to ignore them. If you happen to like them better than your own, wake up, the nightmare is about to become real.

In your company’s last earnings crunch, was marketing expense an early and severe casualty?

Marketing is an investment spend. If the money you are spending on marketing doesn’t add value to profitable sales, it should be cut now. If it’s driving profitable sales, it’s downright irresponsible to cut it. Marketing should be seen as a profit center, not a cost center. If there is no measurable return on your marketing spend, you’re already killing the company from within. If the return can be quantified, cutting it in bad times is senseless and irresponsible.

Is great marketing intended to help a mediocre product perform better than it deserves?

Said another way: outstanding marketing helps a bad product fail faster. If the product is garbage, all marketing can do is get it in the hands of early adopters. Once these market influencers trash the product, all is lost. If the product needs refinement before you invest to take it to market, take the extra time to get it right. If the product stinks and can’t be saved, kill it without a dollar of marketing spend.

Does your company culture resist rather than embrace change?

Also earlier this year I suggested that you keep your ears open for the phrase “But we’ve always…” whether it’s uttered in the break room or a key milestone review meeting. If your colleagues have unending excuses as to why you should stick with tried-and-true ways to fail because your company has always utilized a set of urban legends in your planning, you’re going to find it hard to carve a new path into the future. Doing what you’ve always done simply because you’ve always done it that way is a great way to succeed in any business that isn’t dynamic. Go make a list of businesses today that aren’t dynamic and tell me you should remain set in your ways.

Are you patching your platform or re-envisioning a new one?

Never confuse maintenance with progress. Think about just how fast industries are moving. I recently had the pleasure of watching the movie First Man. One of my favorites lines reminded me that it was a mere 66 years from the Wright Brothers first motorized biplane flight at Kitty Hawk (1903) to Neil Armstrong walking on the moon (1969). If you’re anywhere in the vicinity of 60 years old, that doesn’t seem like much time at all. If you’re fixing your biplane while your competitor is building a Saturn V rocket, it doesn’t matter that you’ve happened upon some world-class glue. When the rocket launches, you’re toast.

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Image: Pixabay

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Rotten Choices, Rotten Jobs

Tenure 2010 BLSMaybe I’m getting a tad older. Or maybe with a few added laugh lines I can see a tad more clearly. Here’s what I see:

Too many people leaving too many jobs much too quickly.

What might that mean?

When I look around, I see way too many folks I know pushing themselves to perspiration to land a job, then in the first few weeks discovering they don’t like it (or it doesn’t like them). They leave in a year or less, maybe two years, three becomes a stretch. Then they leave and step on the conveyor belt anew.

What’s going on here? Is it generational? Is this a millennial thing?

Afraid not. It’s an epidemic. I am seeing it across the board, people of all ages and levels of experience. We might like to believe the way of the world now is job-hopping and we should get used to it, but I would like to suggest it’s more than “internet time” that’s wasting these human cycles. I think too often we bring it on ourselves and then make excuses for it.

Perhaps all this casual turnover is a symptom of a more pernicious ill—the unstructured, undisciplined application of choice.

Rotten choices. Rotten jobs. Crappy bosses treading in goo. Crappy performances by individuals biding their time before they get caught dialing it in.

Gee, Ken, there’s a dose of optimism! So glad I stopped by the open door.

Don’t worry, the optimism is coming, down in the punchline at the end. First let’s look at why these jobs are so short-term. I’ll give you four legs of the stool (metaphor intended):

1) Mediocre Products: Seriously, how can anyone do a great job jamming a me-too knock-off? On my weekly radio spot with Barb Adams last week we talked at length about the failure of Google Plus. Imagine working that hard on a death march with all the resources of a powerful company behind you, only to release a weak knock off of your rival, Facebook. A very quick way to burn up the employee-employer relationship is to sound the rallying cry of importance, then have to explain why it was all words and little action. Solution: Think strategy before you think deployment of resources. Ask What and Why before How and When—what customer problem are you solving, and why are you the right company to solve it. Then grind!

2) Amateur Leadership: I’ve said it many times in these articles—people don’t quit jobs, they quit bosses. If you’ve never had a good boss, you probably will repeat the cycle and stink at it. It’s wonderful to see so much young energy driving the latest wave of startups, but as these New World startups get momentum, they take on many of the same problems as Old World companies. Battlefield promotions abound, and you can’t fake it in front of an army of grizzled veterans no matter how clever you think your quips are. Solution: Mentorship! If you never had a good boss, find one of those grizzled veterans who was a good boss and surgically attach yourself to him or her. You can do this privately or publicly, but don’t be afraid to ask innumerable questions, and whatever you may ultimately choose to do, be sure you LISTEN! Also remember that anytime you choose to have a boss you are leaving some money on the table (the value you create pays your boss’s salary), so if you are giving up income, you should be getting something for that, and it’s called LEARNING. Ask for this benefit upfront. If you’re not getting better at what you do because of your boss, you’re getting burned.

3) Hiring by SEO: Indeed I Love LinkedIn, but if the primary reason a manager makes a hire is because of the keyword overlap between what they need and what someone else has done (evidenced by lots of highlights in the overlay), start the countdown clock. This cuts both ways, company and applicant. Solution: Hire and accept a position for character and compatibility as well as competency. Every company has a culture (and if you think your company doesn’t have a culture, that’s the company culture). A hiring manager needs to Think Different as a team expands. A star individual achiever may not be a consensus player. Legendary companies begin and grow through culture, and that comes from people. And don’t forget diversity. Without it, your products are going to be mighty ordinary.

4) Job Application without Roadmap: If you the hiring manager don’t know what is going to light your fire, what makes you think the person with the offer letter has flint? You must have a notion of what you need now as well as where that relationship can evolve before you begin interviewing. A candidate also has to evaluate not just whether he or she is a fit today but where this position might lead over time. If you think of the opportunity as a relationship, you’ll know you need to leave room to let it expand. Solution: Get clear about yourself first, then start to think about soliciting or fielding offers. If you’re thinking short-term, don’t be surprised if the results are short-term. The immediate need before you is not an end in itself but a launching point. If you’re not thinking that way, the revolving door will soon be spinning.

There’s no question the employment landscape has changed significantly with the generational shift. There is now little stigma associated with short job tenure on a resume. Few pensions remain to hold people in place. Headhunters comb online profiles for middle management as well as senior positions (sometimes entry-level positions!). Self-employment and consulting are becoming increasingly viable alternatives to third-party employment. Many people now value lifestyle over career achievement and will dump a job if it underperforms their personal expectations. Yet even with all that, I hear one heartbreaking story after another about talented individuals departing gigs before they could make a lasting contribution or feel proud about their productivity. You can switch jobs all you want, but you still get one life. What do you want it to be about?

About that punchline and a scoop of optimism—try this on for size: Anyone can change the world, but few people will. You can change the world. That’s not a slogan and it’s not hyperbole. It’s the fuel of innovation, the only true gas in the tank of the companies we admire. Decide how you want to change the world, at any scale large or small, and connect that vision to an employer’s honest promise to let you have that chance. Do you think anyone could pry you out of that job with a flame-heated crowbar? Fat chance. You’ll stay where you’re wanted, and where people let you do the best work of your career. Find that, and the words “rotten” and “crappy” will be replaced by more upbeat adjectives than exist in any vocabulary.

Stop whining. Start growing. Stop offering and accepting dead-end gigs you already know are terminal. Our time is precious, and you’re running out of it. Change the world.

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This article originally appeared on The Good Men Project.