Turning a Setback into Success
It was easier to teach good people our business methods than to hire industry veterans and hope they were a good, cultural fit.
This is my cautionary tale for all small business owners and entrepreneurs. It’s about massive failure/setback, which ultimately resulted in success beyond my dreams.
Ten years ago, in September 2006, I fired my entire company in one day and started my business over.
As the captain of my company, I had let things get way out of hand. The company had gotten $600,000 in debt, revenue was declining because of lack of a strong sales force and process, and our company culture had become rotten to its core—to the point where I no longer trusted my staff, the staff I had hired. To accelerate my sense of urgency to make swift changes, we had less than 60 days left of cash.
By removing all of the salary expenses, the company immediately began to have positive cash flow and became instantly profitable.
Once the office was cleared of the final employee, I first had to deal with me, the CEO and owner. The mess was mine, since I created it. I was embarrassed, I was cloaked in failure because of poor staff management and business ignorance. I was depressed that I allowed this to occur. And somewhere deep inside was a voice of resolve and resilience that would not allow me to quit.
Two weeks before the business shake-up, I had engaged a business coach to teach me what I did not know. He provided invaluable advice—to listen to my inner resolve and to get the negative thoughts out of my head.
Retaining a coach was the first key step in moving the business toward a model of success. My coach was a sounding board for big decisions, taught me key tactical business methodologies and processes such as Key Performance Indicators (KPIs) and the value of daily staff huddles to get a pulse on the business. With his help, we created weekly profit and loss reports and a weekly cash flow report. No longer would I be steering my business blindly.
Three months after I terminated my staff, the business workload was overwhelming for me, and I started to hire a new team. Instead of hiring people with relevant, industry-specific experience, I decided to hire people based on their DNA and teach them our business. It was easier to teach good people our business methods than to hire industry veterans and hope they were a good, cultural fit.
A key thing I was teaching my new salespeople was the power of the word “no.” As I redefined the business, I made a list of things I did not like about my business and decided that a rebooted version of the company would no longer do those things. For example, I decided that we would be margin focused, not revenue focused.
We also decided to embrace the Jim Collins Hedgehog concept, making us niche focused. By being niche focused, we had to say no to opportunities that did not fit within our niche. That was incredibility difficult at times. The ultimate value in being so clear on what our key competency was that new employees did not have any confusion as to who we were, and who we were not, as an organization.
In 2008, we had made many strides and the company was in a much healthier position regarding processes, metrics and culture. Something was still missing—the soul. As the leader, I still did not know why we were in business, other than to serve clients and make money. Then in April 2008, I saw a new author, Simon Sinek, speak about why a company is doing business. Our company was missing that “why.” By 2010, after many hours of conversations and pondering, the purpose of our business hit me—our “why” is to improve lives. If we do that for our candidates and clients, the lives of the people who work in our company are improved.
By seeking the wisdom and experience of a coach, by putting the key business processes into practice on a weekly and daily basis, by hiring good people that fit our culture, by focusing on the bottom line and by having our “why,” our company has seen success over the last 10 years: We are debt free and have paid all of our vendors in full, our staff is stable and consistent, and we made the “Inc.” 5,000 list as one of America’s fastest growing companies six times. As CEO, I could not be more proud of the work the team has done. And I am grateful that I am able to live the “why” of improving lives every day.