We mentioned denial as one of the human follies. Refusal to hear bad news or make excuses goes deeper. Some businesses or industries react to bad news by sticking their metaphorical head in the sand. Others rationalize bad news with excuses casting the blame for their own decisions on other people or circumstances they perceived as out of their control.
Refusal to Hear Bad News
Bad news comes from all sources and about all facets of your business:
- Equipment and facilities break down and need repair
- Suppliers inform you of their bankruptcy or major price hike
- Your biggest client cancels a major order or tells you their sales dropped by 80%
- You find your best employee has been embezzling from you for years
Ignoring the news will close your business. Acting on it may save it.
Make Excuses and Blame Circumstances
Forbes published a story about business failures. The article said “Refusal to hear bad news immediately. Great companies don’t make excuses, including excuses about how they didn’t do well because the economy was against them or prices were not good.”
We have been inundated the last four years with business owners who never had trouble with their business for 10-15 years. They also never developed a business plan or learned how to market. Instead of recognizing their own failures, they blamed the economy. They blamed the big national stores that moved into the neighborhood. They blamed the big plant, who was their only client, that closed.
The key is not that the bad things happened. Nor is it that the bad things affected their business. What matters is what the business owners did about it.
- One answer, complain and blame it on the business environment. This answer does nothing to solve the problem or save the business.
- Another answer, accept what happened and plan a way to adapt, resolve, or solve the problem. This allows you to move forward and possibly save the business.
Saturday we will conclude and summarize our series on business failure
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