Failure

Fortune

The Real Reason so Many Businesses Fail

The Real Reason so Many Businesses Fail 5560 1500 Catherine Bell

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. 

Fortune Magazine, The Awakened Company

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:

Energize

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. 

Sustain

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.

Regenerate

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.

#FortuneInsider #AwakenedCompany

Mac Van Wielengen

Failure: Turning Lead into Gold

Failure: Turning Lead into Gold 2560 1707 Catherine Bell

 

20151027_CB_BellBreakfast_063The BluEra book launch took place Thursday, October 27th.  Thank you so much to the amazing BluEra Team for the sold out launch of our book, The Awakened Company, and to all of our clients for your support.  The President and Founder of Namaste Publishing, Constance Kellough, and her husband Howard, along with my collaborators Russ Hudson from NY and Christopher Papadopoulos from Montreal, and my sister Kim Bell, were in attendance. Calgary participants in the book are Rob Pockar, Mark Montemurro, Shawna Guiltner, Brett Wilson, Kent Brown, and Mac Van Wielingen.

Our morning was kicked off by my wonderful cofounder Shahauna Siddiqui. The panel was le20151027_CB_BellBreakfast_094d by the brilliant Mac Van Wielingen. Members of the panel included the incredibly dynamic Suzanne West,  the thoughtful Regan Davis, and myself. We addressed the ways in which awakened (or awakening) leadership is confronting. We also covered the importance of trust, the realitiesof today’s business environment, and how we can bring positive change to the community and wider society.

20151027_CB_BellBreakfast_003Underpinning much of the conversation were the invaluable lessons failure can teach us. The facts must be confronted: the majority of businesses die within a decade of their launch, while at the same time those who staff our workplaces are largely disengaged.

To draw on the words of Pema Chodron, we need to fail, then fail again, but fail better. This we can do only if we learn from our lesser failures, instead of requiring a massive failure to teach us—with the result that people no longer want to work with us, trust is eroded, and obtaining capital proves challenging.

Are we learning? A Watson Wyatt study shows high trust environments outperform low tr20151027_CB_BellBreakfast_053ust environments by over 300%. However, according to the Edelman Trust Barometer, fewer than one in five believe their leaders are truthful. The reality is that trust is easily eroded and the social contract is being broken all the time in organizations. I recently heard of a company who turned off people’s IT before the employees knew they were going to be let go, and some were let go via a knock on the door. Organizations in which such inhuman treatment reigns continue rolling along—until the day they fail.

Imagine what could happen were we to unleash trust’s potential. As Stephen Covey says, trust is like a dividend, whereas low trust is like a tax.

We can do better. We need to restore trust in data instead of egoic opinions, heartfelt feelings instead of fear, action taken with integrity instead of from short-term expediency, relationships that are more than nominal, teams that draw out everyone’s creativity, organizationsthat can be believed in, and businesses that truly benefit communities instead of harming them.

It’s time to stop using people as a means to clean the balance sheet, instead laying people off only as a last resort after every other option has been exhausted. Research has shown a negative correlation between CEO pay and performance, so imagine what it would do to trust and performance were CEOs to publicly say they are going to sacrifice along with everyone else. At the same time, we need to have compassion for the burnout CEO who is doing their absolute best for their people.

The way we are going to solve some of our greatest challenges is by working more authentically together, which will greatly increase our effectiveness. To do this requires greater self-awareness, the ability to trust and be trusted, heartfelt commitment, ethical behavior, and clarity of purpose—20151027_CB_BellBreakfast_105each of which play a key role in sound decision making, innovation, engagement, and positive financial results.

We need to develop a regenerative economy—one in which shock absorbers are built into the organization so it can withstand and even thrive during downturns. For instance, organizations need to think regeneratively when it comes to profit and savings, seeing profit as a means to energize and sustain the future, not as a short-term windfall to be squandered. We urgently need to end our short-termism around profit generation, a move that would make a huge difference when difficult times arrive on our doorstep. We all want our organizations to be meaningful, interesting places to work, where we are each learning and bettering ourselves.  Let’s build on the mass of empirical evidence we have to this effect—indeed, on what we all also intuitively know to be true.

What an incredible week it was. Two successful book launches, and our book is already a #1 bestseller.  We are so grateful for all those who have supported our book and its important message. If you want to pick up a copy or e-copy of The Awakened Company, then click here. We have also launched an online store with sustainable products to support you in the awakening of your organization, team, community, our planet and YOU. Check it out here.

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