The growth of a company is threatened by external and internal risks. We have already talked about external risks, today we are talking about some typical risks that come from within - i.e. from within the own organization. Internal risks can often be more dangerous than external ones because they are a) more likely to happen and b) can be immediately damaging. The good news: it's definitely easier to take action. Here are risks I've encountered time and again in my career as a company founder and CEO - each is definitely worth a separate article, but here are some initial thoughts:
- We've always done it that way
When their company grows, it leads to change. And many people don't like change because it requires them to leave their comfort zone. Changes can lead to insecurity and ultimately to high resistance. This can only be countered by communicating on different levels and on a regular basis why the changes are necessary, how it will be done and what needs to be done (by everyone).
- That doesn't work
Sounds like the previous point, but it has a different quality. Especially in technical companies, the technicians often have the upper hand and quickly judge that new ideas can't work. They come up with umpteen reasons why something won't work. For creative people who want to make the company better, this can be frustrating. I recommend introducing rules here that everyone must propose at least 2 solutions. Because there is usually a way to turn things around. It also makes sense to go into such a brainstorming with a wishful idea and a more modest idea, so that there is already a basis.
- Toxic Employees
I have seen it time and time again where a few, a few employees actively stir things up against change, colleagues or even customers. It happens subtly in the coffee corner, at lunch, or even outside during free time. There is nothing wrong with being critical of things. But criticism should always take place "in the cubicle." And in the forums that the company provides. Otherwise, the climate in the company becomes more and more "poisoned" and more and more people do everything but don't care about the company's goals anymore. There are people who seem to see your purpose in life as causing trouble (instead of looking for a company that suits them better - I never understood that). If you have created the framework for (constructive!) criticism and this still happens again and again, only one thing helps: you should part with toxic employees quickly and by any means necessary.
- Applying company values with double standards
Everyone who starts out small first exemplifies their own values in the company. The more people join the team, the more important it becomes to derive the company's values from this, so that everyone can identify with them and be guided by them. This can easily be forgotten, but it is an important tool for most employees for their own self-image within the company. However, it is a big mistake if it comes to a 2-class society and the values are applied differently - because then one loses - rightly - with the time the support in the own house. Respectful treatment of customers and employees is a value that one would expect everywhere, but which can quickly be lost, especially when new "managers" come on board who are only out for their own advantage. Another example is that it is demanded that everyone is the "owner" of their tasks, but is in fact left alone with this and can therefore only lose.
The order corresponds to my view from "not good" to "quite bad". If you know more - feel free to share your insights in the comments section.
The post image for this article shows a core drill from the construction phase of my house. I want to use this example to show that things go wrong - in other words, Murphy's Law applies. I then transfer that to a few simple thoughts that have helped me run my business.
Why is there a hole in the core? Because pipes for a residential ventilation system were laid in the ceiling. Then the concrete was poured. And it turned out that the hole for the bathroom downspouts didn't quite fit, so they had to re-drill. And then it was kind of obvious that one of the pipes was hit nice and centered. I kept the drill core because it shows nicely why things go wrong in real life:
- Everything looked good in the plan.
- The masons, however, seem to have strayed a few inches from that.
- The pipes were not listed, so drilling was somewhat of a "gamble".
- No one talked to anyone before the drill.
This could have been avoided by controlling the implementation, communication between the actors and adjusting the plan. In the life of a contractor, the interactions and complexity are incomparably higher than in this construction example. It will therefore not be possible to take everything into account in advance during planning. Rather, it is important here to a) identify all relevant risks, b) discuss manageable measures, and c) regularly review both and adjust as needed. The process can look like this:
- Relevant risks: as an entrepreneur, one should know the risks that can affect the continuity of the company. There are both external and internal risks to consider. I will highlight the internal risks in another article. Typical external risks are: global crises, such as the financial crisis (it doesn't always have to be a pandemic that leads to the postponement of expenses), market entry of a competitor with a better product or fighting prices, failed integration after a company acquisition and the resulting exodus of key employees.
There are certainly more here and in appropriate round these can usually be adequately named. It may make sense to establish one person or team as the "devil's advocate" that is tasked with being "paranoid". Limiting it to one person or team is important so that doomsday thinking does not spread throughout the company (this is a typical internal risk).
- Focus and communication: The list of risks must be prioritized. Because it will hardly be possible to address them all. After all, the main task of a company is to bring great products to the market and not to worry more and more about risks. It should be named which risks are likely, which ones would particularly hurt and what can be done about them with reasonable means. For example, the entry of a competitor (which will inevitably happen if you are successful) can be countered by good customer relations, a clear roadmap, and continuous innovation. The risks as well as the related measures should be communicated regularly and in an appropriate manner (this is again a separate topic).
- Review and adjust: the risks themselves should be reviewed 1-2 times a year. More often is not necessary in my opinion, otherwise you lose focus. The measures themselves should be looked at more often - are we doing enough, for example, to be ahead of the game, how do we determine this (define key figures!) and where do we need to readjust.
When this is taken into account, Mr. Murphy can even become a welcome guest to ensure that you don't rest on your laurels and keep moving forward.
When you start and grow a company you are often asked for a vision / mission statement. I went through this exercise several times with my team, analysts (like Gartner), my coach, etc. and I believe that understanding your vision is more important than you think for at least the following reasons: understanding why you do things helps you to 1) align you business, 2) explain your offering to prospects, and 3) re-invent your company whenever needed. Ultimately, it helps you to stay in the driver seat (vs. being driven by others).
I have read a lot about how to sharpen your vision / mission statement and can recommend to review 2 ideas from Simon Sinek - this is the best I have seen because it leads to clear and easy to understand messages. That does not mean that it is easy getting there, though.
- Read the idea of framing a vision by a "Just Cause" that meets the following criteria: 1) for something, 2) inclusive, 3) service oriented, 4) resilient, and 5) idealistic.
- The "Just Cause" is linked to your mission statement that can be derived following another of Simon's ideas: the "Golden Circle". According to Sinek many companies start messaging with the "what" they do, followed by the "how" and the "why". Since your customers expect an answer to "why are you here?" It's good to turn this around in your mission statement and start with the WHY.
This is not a one-time exercise. Share some brains around this approach and get started. And then refine it over time based on feedback and insights that you gain on your way. I will continue to share my experience about a corporate model based on your vision/mission statement that helped my former company grow over the years.