Well, we have passed through the black hole of financial meltdown. With economic soothsayers prognosticating the onset of financial Armageddon, Congress has passed the $700 billion bailout aka rescue plan. I don’t know which is the bigger story – that we found ourselves in such a predicament or that 535 politically motivated, ego-centric driven, publicity hungry politicians were able to come together and pass such a bill. And, that an incompetent and politically impotent President would sign the bill. (It did help that some $250 million was added to buy a few votes.) Getting all these self-centered politicos to act in the best interests of the country is akin to trying to rollerblade through a swamp.
Much has been written and TV talking heads have grown hoarse dissecting the meltdown of the financial markets and what caused this catastrophe. We don’t know yet if this bailout is just a patch in a leaky dam that will eventually fail and drown all of us or if this will stem the tide while we build a bigger, better dam. Only time will tell.
The Lessons We ALL Can Learn
But as I read the lurid headlines and the articles trying to explain why it happened, it occurred to me that something has largely been left out of the discussions: What does this historic event mean to the entrepreneur? How can we learn from this experience? As in almost all crises there are lessons we can learn, especially if we fancy ourselves as imbued with an entrepreneurial spirit.
No, I’m not taking about the financial effects. Those have been well-documented in the form of unavailable or tightening of credit, the inability to finance growth and opportunity, along with more slow and no-paying customers. What I’m really addressing here is what this fiasco means – or should mean to you, the entrepreneur, whether you’re running a business start-up, a major corporation or you are managing the mailroom in the basement.
One thing we are sure to hear from the politicians and pundits is that this crisis was caused by evil and greedy entrepreneurs run amuck. Nothing could be further from the truth. It is a political mantra that if something goes wrong financially, the best course of action is to blame the entrepreneurs.
Certainly there were high level financial executives who made bad decisions that were motivated by greed and personal gain, but in doing so they were acting as bureaucrats not entrepreneurs. They may have been entrepreneurs at one time, but as they moved up the corporate ladder their compass failed and they were sucked into the maelstrom of bureaucracy. And it can happen to you.
Many assumed that the individuals leading these failed mega-financial institutions were experienced entrepreneurs who were smart, able managers and longtime successful leaders – otherwise they never would have achieved their lofty positions. But, those assumptions were wrong.
Entrepreneurs Who Lose Their Way
The fact is that despite or maybe even because of their success, they had lost touch with entrepreneurial reality. By that I mean, they lost the entrepreneurial spirit that would have otherwise unerringly pointed them in a different direction and prevented the failures. The trouble is, these leaders lapsed into a management fog and their character failed. They violated virtually every basic tenet of what it means to be an entrepreneur. Entrepreneurialism did not fail, these individuals failed to be entrepreneurs.
In my book Cheat To Win, I devoted an entire chapter to the subject of what I call, the “agony of success” — when we reach a pinnacle of achievement but fail to grasp the truth that success will invariably be fleeting unless we work hard to protect it.
A close look and any of the mega-financial failures – Freddy Mac, Fanny Mae, Merrill Lynch, Lehman Brothers, AIG, Washington Mutual and Wachovia – will discover a single thread of cause that wound through each company. These companies all stopped doing what they had done to become successful.
It may seem too simplistic or even egotistical, but I sincerely believe that had the big shots on Wall Street read and abided by the philosophy in this simple chapter, (assuming they had some modicum of intelligence and integrity) they would have exercised the required forbearance that, perhaps, would have spared us from this financial crisis. These were not my ideas; they were simply the expostulation of proven ways to maintain an entrepreneurial culture, even in large companies. The leaders of these failed companies assumed success was an inalienable right of themselves and the company, and lost sight of the fact that success – especially continuing success – must constantly be earned.
I suggest that all of us can learn from the mistakes of these leaders and companies. In doing so we can become more vigilant with ourselves and the business men and women we work with to avoid sliding down the slippery slope of failure.
As we achieve increasing success in our career or business, we should constantly be questioning and testing ourselves in order to recognize if we’re sliding off the slope of success. Check yourself with the questions below as a way see if you’re losing your edge and headed for a downfall.
• Are you becoming less tolerant of the voices of dissent, especially from within? A truly entrepreneurial culture welcomes dissent. It not only engenders trust, but leavens your governing process. Great leadership never occurs in a vacuum.
• Are you becoming more concerned with what you get for yourself than what you can give to others? Is the entrepreneurial concept of shared value and shared success losing sway in your actions? Learn to recognize and avoid this temptation.
• Are you beginning to trust peer pressure as the true compass for future growth and profits? (Others are doing it, so it must be okay!) When we become followers, not pioneers to creative new directions, we can easily lose the entrepreneurial concept of risk management and be lured to the dark side with promises greater wealth faster. The mortgage industry’s unconscionable use of subprime, no doc, interest-only loans is a superb example. Consistent and steady commitment to proven principles wins the day.
• Are you predicating your success on what you have achieved, rather than what you could achieve? Viewing your success through a rear-view mirror is a surefire way to lose sight of where you’re going. Remember the lessons of the past and be guided by them.
• Are you too busy to take the time to do the little things you used to do in the past? The walk through the factory. The chats with your employees. When you get too busy to pay attention to little things, big, bad things will often happen.
• Are you beginning to feel that getting better is not as important as getting bigger – at any cost? The single-minded devotion to growing the top line, increasing stock values and bonuses was an ugly hallmark of the business managers in the ongoing financial crisis. A sense of purpose and transparency was lost; Lies and obfuscation ruled.
The Moral of the Story . . .
No matter where you reside on the corporate ladder, build on your success, don’t rest on it. Maintain a business or a department where real success is earned, respected, fostered, protected and shared. Do so and the people of your organization will have a place to go to grow to be great and you will be the greatest of them all.
This blog can be that nagging voice in the back of your mind that reminds you of your many successes and encourages you to remember what you did to come out on top. Then, repeat it again and again in the future.
Irish essayist C.S. Lewis said, “The safest road to Hell is the gradual one—the gentle slope, soft underfoot, without sudden turnings, without milestones, without signposts.” I sincerely believe that constant adherence to the true principles of the honest entrepreneur will present the opportunity for success, but even more they will help us avoid the agony of success. If not, the comic character Pogo will have been right when he said, “We have met the enemy, and he is us.”