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Your Business Woes Are Keeping You Up at Night

You can’t sleep at night. You’re distracted when your spouse is talking to you. You’re constantly looking over your shoulder as if someone is going to discover the dirty little secret you won’t even say out loud to yourself—your company sucks. Shh! Someone might hear.

This stressful situation makes you miserable, frustrated, frightened, confused, and sometimes even ashamed and depressed. Not only are there sleepless nights, but there are anxious days, too—and all manner of second-guessing.

You are not sure how, why, or when it happened, but you know that somewhere along the way, something went terribly wrong with your business. The business you created to provide you with affluence and independence is now draining you emotionally and/or financially. Your livelihood, your investment, your pride, your baby is on the way to tanking (or consistently disappointing you) and you don’t know how to stop it. And worse yet, instead of the freedom you believed a company of your own would provide, it enslaves you. You don’t have a business—the business has you!

You know what I’m talking about. You are no longer the owner or manager of the business per se; you are its captive. You work long, hard hours, you try everything you can think of to improve the situation, but you know instinctively (and from those damn bank statements and the sullen look on your customers’ faces) that you are sliding backwards. Your business is in jeopardy. Sometimes you want to deny it, as if ignoring it will make it go away. But you know better. It’s time to pull the blinders off and face the truth.

First, remember the good old days—not to run from the pain but to look at how things used to be. Your business was not always the way it is now, not by a long shot. Your business used to be more of a joy, not a burden, and was once a cash machine, not a financial drain. So the huge, hurtling meteor of a question you must ask yourself is, “What went wrong?”

The answer, in the vast majority of cases, is actually quite simple (but nonetheless challenging): your business adds up to less than the sum of its parts. It does not fuse its people, products, services, and concepts into a unique entity with an exponent over its name. You may try hard. You may have good intentions. You may have all the elements the textbooks call for. But still your company suffers from an insidious form of slow death: it fails to thrill.

Deer in the Headlights

I know dead-on when a business owner is gripped by the knowledge that his company has slid off the rails. Though he tries to disguise it, and maybe succeeds in the face of his employees, I can read the look from a mile away. Think of it as a tired, confused, even panic-stricken gaze signaling that he is struggling with an issue. He has a secret of sorts. I say of sorts because the prospects who failed to transition into customers and those who bought in the past but have disappeared into the arms of competitors—they all know, at least intuitively, the dynamic at work at this fellow’s company. They cannot be fooled. They see and sense the owner’s desperation, his lack of confidence, his fear. That skittish behavior and deer-in-the-headlights look are terribly costly because of a powerful and generally unwritten rule of commerce—customers and clients are driven to do business with those who appear strong and robust and conversely are repelled by those who appear shaky and weak.

Success breeds success and failure leads to disaster. Think of the crowded restaurant that everyone flocks to dine in. Complain and gripe as you may about the long waits, you’ll be back over and over again because the food is so delicious and the atmosphere draws you in. And if everyone is coming here, it must be a great place. It is strong and robust.

Play this scenario against the quiet restaurant, nearly empty, a patron or two seated at its fifty tables. The host, though pleasant enough, takes a while to seat you, and the server forgets your extra lemon. Or maybe he seats you right away, but it’s like he’s trying too hard. His eyes are almost pleading, “Like me, like me!” Something in your gut says, “This place sucks. It’s a loser. How can I get out of here without insulting the guy?”

Like every person at the helm of a company on the skids, the lonely and desperate restaurateur knows something is terribly wrong. He just doesn’t want to say it out loud, to admit it to himself in the bright glare of daylight. It’s as if keeping silent will somehow limit the damage.

The poorly kept secret is that his company is exhibiting one or more of the four characteristics that lead to failure that I mentioned in the warning at the beginning of this book, and his business is suffering as a result:

• It fails to truly excite people about its products or services and to keep them intoxicated—it has the Lust-to-Lax Syndrome.
• It is rife with internal conflict, driven by cabals among employees who have developed their own agendas and who fail to follow the leader’s strategy (if there is a leader or a strategy at all—this falls under the Rudderless Leadership category).
• It’s a ship adrift, going through the motions, filling orders but doing so in a haphazard way. It lacks direction and the internal combustion to drive it to the winner’s circle—again, failed leadership is at work here along with incompetence and conventional thinking.
• Worst of all—and this is the hardest part of the secret for the owner or manager to admit—the company is actually on a trajectory that will lead to its demise or endless pursuit of success that proves to be elusive. Most likely, the business is stuck in neutral or locked in reverse, with revenues failing to grow or diminishing month by month, year by year. If a dramatic change is not made, the enterprise will go out of business, producing zero equity or income for the person who built it. This painful fact of life is often camouflaged until the defects that threaten the business are so egregious and inflamed that the end is near and the options for reversing the decline are few, challenging, and costly.

A Bedtime Story

Let’s examine the case of a highly recognized company that once had the status and stature of a market leader, a finely managed and operated business, that allowed itself to deteriorate, fall on its face, and lose its way. Consider it a perfect example of a company that sucked. Although your company may not be the size of this major corporation, the lessons from its example are valuable for small businesses, too. The sins it committed are replicated every day by other companies—yours doesn’t have to be one of them.

The business in question is Holiday Inn. Founded in 1952 by Kemmons Wilson, the hotel chain proved to be an instant American success story. It was on a trip away from home that Wilson had an epiphany: travelers did not have a place to stay the night—a hotel or motel brand—that offered a reliable level of quality. Drive up to a lodgings establishment and it could turn out to be anything from a clean and homey inn presided over by a doting retired couple to a nightmarish one resembling the Bates Motel.

Wilson was determined to change that by opening hotels that would be clean, value-priced, family-friendly, and accessible from major roadways. And he wanted to do this for every Holiday Inn location, making each establishment virtually identical and thus reliably similar. This visionary entrepreneur from Memphis launched the first four Holiday Inns in or on the outskirts of Elvis’s hometown in 1953. His concept struck a chord with the American psyche and proved to be an instant success. Fifteen years after the Memphis debut, there were a thousand Holiday Inns dotting the U.S. landscape, and when the company made the cover of Time in 1972, the chain had mushroomed to 1,400 inns.

I grew up with Holiday Inns; you might have as well. As an adolescent, I would stay at the inns with my family on our road trips in and around the Eastern Seaboard. And as a college kid, I would pick the familiar and affordable option when I wanted to get away with a girlfriend.

I was a middle-class kid, so money was always a factor, but none of us (my parents, girlfriends, or I) wanted to sleep in a dump. We knew we weren’t in the lap of luxury (to be honest, we really didn’t know what luxe was), but we (and millions like us) flocked to Holiday Inns because the chain consistently gave us what we wanted at a price we could afford.

And then the founding family sold the business (first Holiday Inn International in 1988 and then North American Holiday Inn in 1990) to UK-based Bass LLC, the beer-makers and parent company of InterContinental Hotels Group PLC. Under this new leadership, everything Holiday Inn was when it took America by storm evaporated under a management team that appeared to have little or no respect for, or understanding of, what the company represented.

Under the new management’s neglectful stewardship, the Holiday Inn experience became sloppy, unpredictable, worn and tired, both in look and in welcome (or lack of one).

The company declined from a great value to a cheap stay. Furnishings were dated, paint jobs were delayed, signage was often broken or poorly lit, and training (what was left of it) did more to keep patrons away than to provide the family feeling that lends a lodging facility a sense of being a home away from home. This was a sea change and a highly unattractive one at that—so much so that on a business trip during the early stages of my career, I decided to sleep in my car rather than accept the fleabag room a Holiday Inn night manager showed me.

Without Wilson’s vision and with high standards out of the picture—replaced by operations geeks and financial engineers—Holiday Inn became a company that sucked virtually across the board. Revenues, profit, and customer satisfaction all took it on the chin. A once-great American enterprise was a shadow of its old self.

This happens when inept management in any field or industry and in any size of company forgets:

• That it’s essential to live by the brand’s promise;
• That the customer’s loyalty has to be fought for—if it’s not, the customer can easily be drawn away by other choices;
• That as important as it is to be fiscally prudent, you cannot put your brand in danger by allowing your product or service to deteriorate. Saving money may generate a short-term boost in profitability, but it’s often at the expense of the company’s viability.

The extent of the malaise at Holiday Inn in its dark days comes into sharper focus when you consider the scope of the turnaround initiated in 2007:

• Total cost: $1 billion plus;
• 3,400 hotels and 430,000 rooms renovated;
• Completely revamped guest welcome experience;
• Redesigned brand image and signage;
• Upgraded bedding, pillows, and linens to provide an all-important residential look and feel; and the
• Implementation of a “Stay Real” training program to assure guest expectations are exceeded once again.

In summary, in 2007, Holiday Inn declared war on itself and it proved to be a win-win for guests and stakeholders as satisfaction and financial performance levels rose substantially.

My Own Pounding Headache: The Migraine Born from Mediocrity

It feels awful to run a company that sucks—to wake up at night and stare at the ceiling, knowing something is terribly wrong. I think of it as Migraine Misérable.

I know the pain and anguish of this from firsthand experience. I brought it on myself and had no one to blame but Mark Stevens. That was the bad news. The good news is that I learned from it.

None of my observations on the state of a troubled business (or one that will soon be categorized as such) are academic. The primary driver and source of my insights and guidance are based on personal experiences. Think of it as a veritable punch in the solar plexus, stemming from the painful truth that I founded and managed a business that once failed to measure up. I had to look in the unforgiving mirror and admit I had somehow taken a wrong turn and ended up in Sucksville.

When I started my marketing firm in 1995, I had no idea how to run a business based on my hybrid vision of marketing and management consulting. I was inventing on the run, in real time, and driving over speed bumps en route to the success I was determined to achieve.

At first, I thought I had it all packaged up for guaranteed success. I created a powerful methodology for growing companies based on the belief that there is a universal equation that will drive revenues and profitability. I framed it as C+A+M=PG (Capture Customers + Augment Your Relationship with Them + Maintain Them for Life = Perpetual Growth).

I was a student of physics, loving the way giants of science such as Newton boiled complex dynamics into simple rules and principles (e.g., “a body in motion tends to stay in motion”) and believed I could do the same for business. That is, create a grand unified theory for growing companies so management can focus on only a few key leverage points as opposed to hundreds of moving parts. Thus, C + A + M = PG was born.

So I had a road map, and I was assembling a strong team, but there were some glaring weaknesses that I did not address—I didn’t realize at first how big these shortcomings were. I believed at the time that they were insignificant against the background of my strategic achievements, but I was dreadfully wrong. My company sucked. At least once a week, a client would tell me so. “Mark, you’re a smart guy and we like working with you, but, Mark, nothing is ever delivered the day you say it will be. Deadlines are missed. Schedules are blown. Your team makes promises and then breaks them.”

That cut me to the quick—doubly so because I knew that it was true. No one at MSCO was a bad person or intentionally failed to deliver on time and in full, but we were performing like losers, and that’s all that mattered to clients.

Here, precisely, is what I saw in the mirror: a reflection of what a company looks like when it sucks. I winced every time a client called to complain, but I didn’t act—not quickly enough. I gave employees second, third, and even fourth chances. I wanted to save them. I wanted everything to work out. This was based not on a belief that business can ever be a democracy (I never fell victim to that) but instead on a more damaging (and widely held) faith I think of as “Hope Springs Eternal.” This fantasy leads to the false conclusion, the Hollywood ending, that everything will just magically work out. It rarely does, but I was lost in the fantasy and in a misguided belief that my employees were at the root of the problem, and that they would somehow see the light, correcting all the issues.

But when you face the facts, if you are going to engineer a turnaround you must admit that when you’re in Sucksville, it isn’t anyone’s fault but your own. Problems and defects don’t cure themselves. They fester and compound, marching the business inexorably toward deterioration and destruction. It’s up to you as the leader to take charge. You must declare war on yourself.

Clearly, the time has come to act.