Your Biggest Competitor, Part III
By Chuck Violand
February 13, 2017
In his book, How the Mighty Fall, business guru and author Jim Collins outlines five distinct stages that companies go through as they slip into decline. The first stage is “Hubris born of success.” In other words, the egos and arrogance of company leaders cause them to believe they’re entitled to success, and that the rules of business no longer apply to them. They mistakenly think they’re insulated from the risk of failure. While Collins writes about billion-dollar, multinational enterprises, I’ve witnessed the same principle play itself out in small businesses. When the owner’s ego is out of control, it’s never a matter of if the company will stumble and decline. It’s only a matter of when.
In a roundabout manner, Chris Zook and James Allen also write about the impact hubris, ego, and arrogance can have on business in their book The Founder’s Mentality. The results of a survey they conducted showed, “A remarkable 94 percent of barriers [to profitable growth] cited by large-company executives had their roots in internal dysfunction and lack of internal capabilities.” It’s no different with small-business executives, and while all the internal dysfunction in our companies might not be centered on ego issues, much of it is. When owners and senior managers are encumbered with inflated egos, people stop asking questions; they stop listening; and they start hoarding information, turf, entitlements, and decision rights.
From a competitive standpoint, this is an invaluable fact to keep in mind if we’re a younger or smaller company going up against a larger competitor. Knowing that so many large, entrenched companies fall victim to the perils of arrogance and ego can be used to our advantage if we keep our mind and options open. Maybe try offering custom, out-of-the-box solutions to our customers’ problems rather than saying “that’s not how we do it here” as the larger company might.
If we happen to be one of these larger companies, we would do well to heed any warning signs of ego and internal dysfunction before our company stalls.
For an effective, five-word acid test to help determine if we’re managing our egos, practice saying “please,” “thank you,” and “I’m sorry.” It may sound simple, but just how comfortable are we using these words with those in our organization? If we feel hesitant or uncomfortable it may indicate that we have some work to do.
If all else fails in our attempts to reign in our egos, try volunteering at a soup kitchen, homeless shelter, or food pantry. As our success and affluence increase over time, it’s easy to forget, or intentionally overlook, those less fortunate than us.
It’s easy to let our egos convince us that we had more to do with our success than we actually did. We dismiss the impact that sponsors, mentors, and blind luck had on our success. We forget how fortunate we are, and what a privilege it is to own a business in a free country.
Every accomplishment we achieve in our lives and in our businesses is a privilege in which others played a part. These accomplishments carry with them a responsibility to the others involved. We’d do well not to let our egos blind us to this fact.