How Not to Run a Company

Want to run your company the wrong way? Do nothing more than emulate the major political parties. They sure seem to have a lock on ineptness, goofiness, and disputes. Here are five examples comparing political parties to businesses.
Strategy – or should I say the lack of strategy – must be discussed. Both parties seem to go the direction of the most current wind (this is not new, it’s been going on for years). They can never figure out if the goal is to appeal to their base, usually a minority within each party that is loud and pushy, or appeal to the swing voters. So they do a little bit of both often leaving the election to the quality of the advertisements.
Continually changing direction will put you out of business.  Of course, if your strategy keeps changing you really don’t have a competitive advantage to exploit, because it’s always changing. When you confuse your customers they will do nothing, or go somewhere else.
Advice: have a strategy that exploits your competitive advantage and continually implement it. When it comes time to exit you’ll be glad you did because growth is one of the key elements a buyer wants in a business.
Culture – the tail sure wags the dog in national politics, doesn’t it? Candidates push the party platforms objectives, not that too many people besides the extreme loyalists pay too much attention to it. But candidates push each other. Look at the Democrats this year. Clinton said no to free college tuition until Sanders made his run. Then she switched saying there should be free public university tuition.
Try this in your business someday. Every time an employee has an idea change direction. Then see what happens when two employees have different ideas on the same subject. You can’t do both and if you have a habit of trying to appease everybody just watch the culture disintegrate when you pick one or the other.
Advice: create a culture of free flowing ideas but make sure there are no expectations.
Undermining and deception– political candidates have a way of being prime examples for “pay attention to what I say not what I do.” This is another trait that’s been going on for years. How many times do politicians promise everything to everybody, not deliver, and most voters (those who’ve been around awhile) know enough to realize it’s just blabber?
In business it’s the owner who has separate rules for herself, her family members, and favorite employees. It’s one of the reasons delegating can be tricky. If not careful people will think it’s favoritism not delegation.
Where this really is an issue is with the financial statements. Too many owners play games with their financial statements, all as part of the never-ending quest to reduce taxes. Some of their tactics are illegal, for example,the blending the personal and business checkbooks.  Some are just stupid. So many times I’ve heard owners say they bought a (not really needed) new truck or new machine because “I needed the write-off to reduce my taxes.” Realize if it’s not needed, even if the government pays 33% of it, you are still out 100% of the cash.
Advice: set a good example, be consistent, and have your financial statements be an accurate representation of the business and its potential. Buyers like this and banks love it.
Short cycles – politics run on extremely short cycles, every two to four years there is the potential for major change. This is almost as bad as Wall Street being enamored with quarterly performance, much less the challenge of short-term bonuses versus long-term results.
Most small businesses don’t have these issues but they do have an issue that sometimes presents a challenge when selling the business. This issue is the lease. The bank and the buyer will want a lease, with options, at least as long as the term of the loan. Disaster strikes if the business has a, very expensive, move in the middle of the payoff period. Yet most business owners don’t think of this as they do their day-to-day tasks.
Advice: Plan for the long term and run the business for the long term. It will pay off as you’ll have a growth plan, up-to-date equipment, happy employees, and more.
Dependencies – political parties have huge and ever-changing dependencies and it’s called the candidate. In a presidential year it’s the presidential candidate. And a lot of what happens is based on the candidate’s personal philosophy and preferences.
Look at the Republican convention. It surprised me when the Trump people had a gay speaker, used the term LGBTQ, and mentioned eliminating the gender pay gap. Not exactly in line with the party platform, is it?
You know where this is going when it comes to a business. Get rid of your dependencies, especially if one of them is the owner. Reduce customer concentration, get rid of employee bottlenecks, and owners, please realize less is more when it comes to your involvement in operations.
Advice: it’s pretty obvious, reduce any dependencies your business has, especially if it’s you the owner, and the sooner the better.

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