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Early Signs and Symptoms of Small Business Failure

When any of these symptoms begin to be a normal part of your company’s meetings you need to be diligent and accept that you may need to pivot,...

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There are three early symptoms in business that indicate that it may be time to change course:

  1. When you are over focusing on “How to sell your products and services.” (i.e., you are focusing too heavily on how to persuade people into buying your offering.)
  2. When the standard methods of solving the business problem are not generating reliable results. (i.e., when you do what business school tells you to do, but it simply isn’t working.)
  3. When your employees become increasingly more frustrated with your customers. (i.e., you hear complaints and more importantly complaints you didn’t hear before.)

When one of these three symptoms exist, usually there is a systemic issue laying in the underbelly, that is rooted in your understanding of the market and the world. Essentially, every business owner has a worldview, and they operate on these assumptions.

 

The Business Quarterback’s Blind Spots

Think of the quarterback in American football. Business leaders are collectively the quarterback. Each decision that can be made usually fits one of two types of plays.

  • Running the ball.
  • Passing the ball.

Running the ball is about sustaining innovations. This is the most common mode of thinking and doing in business. This is best when the system is established and you understand the territory. It’s the bread and butter because it consistently leads to incremental improvements. The risk you take feels very low, the yardage you might lose is quite low, and you have the support of your whole company to support the run. But the possible gains are also typically low.

Passing the ball is a different process. The process of passing the ball is exploring the field of play, immersing in the wide lens, generating possibilities of where to play the ball, and when you finally do make the pass, you are taking a chance at the unknown.

Most small businesses put their heads down and push ahead, continuously running the ball. This works when:

  • the past closely resembles the future
  • the target goals can be reasonably met consistently
  • the problem is very well understood

However what tends to happen is this: the business owner keeps their head down, and doesn’t often survey the field, or when they do they miss the small intricate differences that can disrupt the foundational strategy.

Then, a business owner starts to see that:

  • it takes more muscle than it used to get the same result
  • you may have to focus on trickery rather than what worked before
  • people will begin to blame things such as the weather and the economy
  • arrogance  (an early defence mechanism) may arise
  • new players on the team are told “how it’s done”
  • what worked greatly, now has dismal results

This is the result of the field of play changing, companies can be so focused on creating and perfecting their strategy that they forget to look up and make sense of the world around them. They keep running the ball, when they should take time to see the dynamics of the field at play. Without this, by the time they look up, it’s usually too late and they are too ingrained to rally the team towards a change effort.

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