A career choice, I deliberately chose to work with privately held mid-size companies to avoid the politics that hampers good decision-making in larger companies.
Trouble is that in these mid-size companies it is friendships not politics that is an obstacle when trying to do what I do for clients – grow sustainable business value, pre-transition.
More specifically it is the abuse of friendships that is at the core.
Now don’t get me wrong. Friendships and strong bonds are critical in business. At deConstantin we swear by the KLT rule when engaging with new staff or clients – Do they pass the know, like and trust test?
Try it yourself right now with an individual in your inner circle. And it has to be a 3/3, not 2/3.
OK, back to my point earlier regarding the abuse of friendships in business. I encounter this often in the accounting role. My client, the owner, is often too busy or not sufficiently versed in financial accounting to really check in on the integrity of his or her financials. Many accounting sins are hidden from the owners and shareholders. These days I am quick to react when the “debits don’t match the credits”. I have written before on this blog about the imperative for all owners to get a 3rd party opinion on the integrity of their accounts, especially for those businesses whose size falls below the auditing requirements in the Corporations Act.
Back to the subject of people around you, in general.
The key question every owner should ask themselves is – are all my people happy and engaged in the business and would I re-engage them knowing what I know today?
And this applies to ALL people, not just managers and employees – partners, clients, suppliers, advisors and yes, even customers!
Ask these questions of the key people in your circle:
- Is there a team member who disrupts everyone else? With the caveat of not confusing healthy disagreement with outright disruption.
- Is there a supplier not delivering to expectation?
- Is there a customer who drains you emotionally and is not worth the angst?
- Is your financier causing you concern or grief?
- Are you holding on to an executive in the hope that they will one day start performing?
Often, mid-size businesses outgrow earlier relationships and you need to ask the toughest of all the questions:
- With what you know today about – insert here employee, supplier, customer, advisor, financier – would you re-engage him or her?
If you continue with the wrong people, they will drain you and stall growth. For any company seeking growth (and enjoyment), this introspection is a must.