Business Failure 3: Rationalizing Rather than Confronting Brutal Facts

This continues our series on situations that cause business failures so you can avoid them

Every business possesses flaws, weaknesses, and problems. Sometimes the business itself generates the problems. Sometimes situations or circumstances outside the business create the flaws or weaknesses. Jim Collins describes one of the characteristics of great companies. He labeled one characteristic: Confront the Brutal Facts. Ignoring or rationalizing them may cause your business to fail.

Rationalize or Ignore the Brutal Facts

Avoiding confrontation feels like the easier thing to do. Several brutal facts arise in a business:

• Tough personnel or interpersonal problems in your team
• Low performance and productivity
• Low sales month after month
• Cash flow or financial woes hamper growth or stress your family income. All of these brutal facts pile up on business owners
• A national big box store moved across town from your neighborhood hardware store
• Your profit & loss statement for the last three months showed consistent losses
• You & your business partner see very different visions for the company’s future

You choose how to respond to the brutal facts about your business. You may choose to ignore them and hope they disappear with time. However, consequences follow rationalizing and ignoring:

• Personnel issues grow & fester when ignored or rationalized that they will disappear
• Ignoring poor performance and low productivity will drive your business into failure
• Using excuses to justify low sales, cash flow, or financial woes prevents you from confronting and finding solutions to improve them
• Failure to confront a big box store or consistent losses could cost you your business

Confront the Brutal Facts

Business owners who confront the brutal facts resolve them and grow their business. Your success will increase exponentially when you involve others to confront the brutal facts of your business. Various methods will help you:

• Study and research data related to the facts you need to confront
• Brainstorm ideas with your team, mentors, SCORE coaches, or others
• Consult with free or paid business consultants specializing in your problem
• Plan actions to resolve problems

Tuesday we will consider how managers may have faulty information to make decisions