The Real Reason so Many Businesses Fail – as originally appeared in Fortune
It shouldn’t always be about the bottom line.
The Entrepreneur Insider network is an online community where the most thoughtful and influential people in America’s startup scene contribute answers to timely questions about entrepreneurship and careers. Today’s answer to the question “What’s something you wish you knew before starting your business?” is written by Catherine Bell, cofounder of BluEra.
Most new companies perish within nine years of their founding, but no leader starts a business to fail.
The prevalence of failure in business tells us something about the way we start companies. While there are many causes for business failure and economic downturns, they tend to include a mercurial concoction of factors, such as lack of foresight, poor strategic planning, a shortage of capital, insufficient personnel, and inadequately trained individuals. To these we can add the broader factors, such as advances in technology, geopolitical forces, increased competition, and often, just plain greed.
In addition to the ups and downs of the market—with its extremes of increasing wealth for the few and the loss of even hard-earned pension funds for others—a particularly tragic aspect of the modern economy is that the majority of the workforce is disengaged. It’s a factor that increases the likelihood that companies either don’t thrive to the degree they could or fail to survive over the long term.
Underpinning all of these reasons for our economic woes are team members who in some way fail to perform in an optimal manner, both in the head office and on the shop floor. Much of the business world tends to have a dehumanizing effect on people, which ultimately undercuts worker enthusiasm, creativity, commitment, and performance. Let’s not start businesses like this anymore.
When we value people—instead of devaluing them as if they were to be merchandized—we greatly benefit as organizations, as societies, and as a world. Our bipolar boom-bust economy is the result of a workplace that lacks humanity. “Profit above people” is a bad mantra with a poor prognosis for the wellbeing of individuals, families, societies at large, and the planet that sustains us.
See also: Here’s How to Know Your Business Is Headed for Disaster
It’s clearly time to change our metrics of success. We need to bring humanity into our startups by establishing strong, one-on-one relationships in our workplaces, defining a clear reason for our companies’ existence that our people at every level can believe in, and ensuring that everything we do as an organization is responding to the deeper needs of society.
How do you put these principles into effect in your business? Drawing on my own experiences and conversations with inspiring entrepreneurs, leaders, and thinkers, here are three types of practices you can implement at the start:
Have your team help you create your vision. People support what they create. This isn’t about the executives locking themselves up in a room to write a new business plan. It’s about getting feedback from everyone in your organization about why you exist. Making gobs of money doesn’t capture most people’s hearts, so you need to find out what does. People want to hear about your mission and what problem you’re solving. If it is just you at the startup, what deeper need or problem are you solving? Communicate this.
I made huge mistakes with BluEra’s vision, and learnedthe hard way. In one instance, we had scheduled a planning session with a consultant from Denmark. When the consultant asked what the team vision was, no one remembered. Imagine my embarrassment.
Once the vision for our organization had been solidified, I did a poor job of reiterating and thereby sustaining this vision. Now we have our vision on our website, our blogs, cakes—I’m constantly reminding our team of it in all kinds of ways. If your vision is still right for your company, do something today that reiterates it to the team in a way that they will remember. Booking one-on-one meetings to discuss the vision is also important.
From answering emails in bed to checking messages during meetings, we are burning ourselves out because we rarely stop working. To implement alternative metrics of success, leaders at some of the top companies are increasingly utilizing practices such as meditation, yoga, stillness breaks for staff, and mindfulness training. These practices allow people to be more thoughtful and inquiring. We must have compassion for ourselves as leaders and take time for proper self-care, as well as providing for those who work throughout our company.
The result of these changes will be greater engagement on the part of personnel, a deeper sense of meaning for everyone involved in and connected to our organizations, and consequently less business failures. Let’s start considering the quality of our experiences in the workplace—not just the bottom line—and thereby become quality companies in every way. It’s easier to start companies this way, and I wish someone had told me about this.
Catherine Bell is a founder of BluEra, an award-winning executive search and team transformation company, a fastest growing company in Canada, and author of the best-selling book The Awakened Company, a Best Leadership Book of 2015. You can find The Awakened Company on LinkedIn, Facebook, Twitter, and Instagram.