In this first official episode, Matt C puts his failures out there for everyone to listen to. He is interviewed by his close friend, Brian Donovan, a successful Hollywood actor and someone who knows where all of Matt’s “bodies are buried”.
In his introductory episode Matt tells you why he is focusing on failure to not only help you succeed but to be able to be okay with failure when it happens.
In the past year, I have used this phrase three or four times when in conversations with people with whom you would not normally utter those words. I used them with two shareholders, my boss and chairman of the board, and in a job interview.
These are normally words spoken by an employee over a beer with a friend or co-worker while either complaining about their boss or their company, talking about their job search or simply explaining that work is not the most important part of their life.
This article isn’t about all the reasons the companies cause people to feel this way about the hand that feeds them. Rather, it is about why you shouldn’t care about your job, and if you manage people, why they shouldn’t care about theirs. I write a lot about the intersection of human nature and business, and how managing and understanding the basics of human nature is critical to building a culture with structural integrity.
To illustrate this, let’s take a look at Maslow’s Hierarchy of Needs below:
Based on the above, I need my job to cover the most basic needs for myself and my family. Once I have that covered, I want my job for reasons of belonging and self-esteem. I use the word “want” instead of “need” because for some people, those needs are met elsewhere, but since this blog is about business, let’s assume that your job helps contribute to the attainment of this need. If you care about meeting the basic and psychological needs above, you darn well better care about your job or you won’t have one.
However, this hierarchy means there is an inherent conflict of interest between you and your company. That is, as long as your needs trump those of the company’s, you will always be pre-disposed to make decisions in your own self-interest as opposed to what is best for the company. Examples may include:
- Not speaking up in a meeting when your opinion differs from everyone else’s
- Not calling out your boss (in private please) when he or she is making a decision that is not in line with the company’s mission
- Deciding not to stick up for a co-worker who may have his or her back against the wall
- Not pushing back on your CFO when they are making a decision on a customer that could have a ripple effect that won’t be felt until it is too late
Assuming that your company would not keep you employed if you were not effective and right for the company….stop caring about your job. Let it be known when needed that you don’t care about your job, but rather, you care about the company and will only make decisions that are congruent with the company’s goals.
If you are doing a good job in the first place, one of two things may happen when you stop caring about your job and start acting solely in the best interests of your company. First, your job satisfaction will increase because you won’t mull over throughout your entire commute home what you should have done or said in the management meeting, bitched about it to your partner all through dinner, and thought more about it while trying to be present with your children. Second, if not caring about your job doesn’t go over well in the office, you may end up eventually firing yourself and finding a company where respectful dissent is valued and encouraged because at the end of the day….what’s best for the business is ultimately what is best for all stakeholders.
In Q1 of 2020 I will be launching the Failure Guru podcast where I will interview executives of failed businesses to dissect what happened, why it happened and what they would have done differently to avoid failure.
It promises to be very insightful, personal, emotional and full of lessons we can all use. If you know of anyone who would be interested in telling their story, please send them my way.
Also…my blog has been refreshed to add information on my executive coaching practice, speaking topics, as well as a short bio on me. I am open for business and looking coaching and speaking opportunities.
Thanks to all of you who have been active in supporting this, here is a peek at the cover art for the blog:
Working outside of your core competencies can put you out of business.
By their nature, many entrepreneurs are idea generators, and have never had an idea they didn’t like. I was the same way back in my twenties, which was only amplified by that fact that I had another trait entrepreneurs have: I was always swinging for the fence.
If you have read some of my previous posts you already know that when my sister and I were running the family candy company, my decision making was guided by my ego. In the quest to grow, many of the decisions I made led to making products that sold great but were more costly to make because they involved manufacturing procedures that we were not competent in or couldn’t pull off on a large scale. Not only that, I didn’t anticipate all of the bottlenecks this would create which added costs that I did not capture.
Had I “stuck to my knitting” in the first five years of the business, we would have only made products that we could manufacture efficiently with the equipment we had. The result after five years would have included some of the following:
- We would have had the business paid off.
- We would have been profitable.
- We would have been debt free with a balance sheet that could support growth.
During that five years I would have also been able to put together an executable strategic plan for years five thru ten instead of swinging for the fences all the time with my latest, greatest idea. Like many entrepreneurs, I knew a home run would make us really profitable.
The “home run” came when we landed the Starbucks account. For three or four years I had been submitting potential products to them, only to receive rejection letters (yes, companies used to do that). I kept all of these rejection letters with the intent of framing them along with our first PO and a copy of our first check from them.
During that time, we developed a Bavarian pretzel that was coated in peanut butter melt-a-way then covered in milk chocolate. This was an industry innovation that, while slightly outside of our core competency, was not entirely because we packed and sold them in bulk to coffee bars in Nordstrom cafes and in the coffee bars that Eddie Bauer used to have in their stores. I was dying to sell these to Starbucks.
One day I received a call from the buyer at Eddie Bauer telling me she was leaving EB, couldn’t tell me where she was going but would be calling me when she got there (How many times has that happened to you?). EB was headquartered Seattle. I was chomping at the bit, and yes, she landed at Starbucks.
I flew out to Seattle and took her and the buyer I would be working with to what at the time was the most expensive dinner I had ever taken a customer to. I remember calling the number on the back of my credit card after we got the bill to see if I had enough credit to pay the $350 bill!
The buyer wanted us to create what would be another industry first: a chocolate covered s’more. Keep in mind two things before you read about the product: First, it had to retail for $2.99 and be packed in boxes of six. Second, it takes all kinds of expensive automation to make this product if you plan on making any money on it. Automation we did not have. The volume was enormous.
This s’more was a graham cracker with caramel on it, and marshmallow on top of the caramel. Those are two separate procedures we would need to do by hand, at separate times, before ever covering them in milk chocolate and then decorating them with dark chocolate. We did not have the capability to do the contrasting decorating. Below are the steps to making it and whether or not that step was automated or manual for us:
- Making the caramel: manual
- Making the marshmallow: manual
- Applying the caramel and marshmallow: both manual, thru a hand funnel on graham crackers that were hand place on large trays.
- Loading them on our enrober to be chocolate coated: manual
- Chocolate coating: automated
- Cooling: automated
- Packed into individual bags: manual
- Bag sealed: manual
- Bag labeled: manual
- Box packed: manual
- Box labeled: manual
- Box taped: automatic
- Boxes stacked on pallets and shrink wrapped: manual
I can’t recall exactly but I think we sold these for at most, $1.80. The bottlenecks alone probably cost more than the selling price and we would get POs for 20,000 cases at a time.
This product threw my entire manufacturing operation into complete shit shows when we had to make these orders. But hey, I was growing the business. We even had to subcontract the labeling of the bags prior to a production run because we couldn’t keep up the labeling. When I finally purchased a used flow wrapper, it helped the packaging but worsened the bottlenecks after that because we didn’t have automated case packing.
The product was selling well, and the buyer wanted to come to our booth at the Chicago candy show. We were not exhibiting there so I flew out to take her to dinner, essentially, to use up one of her nights so that a competitor couldn’t take her out. At that dinner, she wanted us to make another product for her. I won’t go into detail on this one, but it was even harder to make than the S’more and there was no way I was going to take on an even harder product. I just lied. If you knew me then or have read my earlier, “How to Fail” post entitled: Sell,sell,sell, you know I would not walk away from this. The complexity of this product eventually led to us losing all of the Starbucks business. The S’more ended up going to a competitor I could not stand, who had been making simple, chocolate covered graham crackers for them for years. He was good at sticking to his knitting and had the cash to invest in the automation.
At the time, we were only doing about $1M per year in business and I can guarantee you that both of these products for this huge customer had negative gross product. In other words: We were taping dollars to boxes when we shipped them an order.
Takeaway: Growth is good, but growth that is out of control and not supported by a written and achievable strategic plan is not. Growth grounded in a desire to make it big and do so fast, can put you out of business. Yes, there are times when you need to pivot and times when you need to go for it. But decisions to do so are only made after critical contemplation and analysis. Otherwise, stick to your knitting, make money in ways you know you can while setting yourself up for future growth.
What is the root cause of failure? Businesses fail for many reasons some internal and some external. Experts will tell you about the many ways to pursue success and avoid failure. Patrick Lencioni, Jim Collins, and Verne Harnish each have amazing business minds, are top thought leaders and are people I admire and whose lessons I use every day.
But even as we develop a great team, create a flywheel and put effective systems in place, what is missing? There is something going on in the minds of everyone in the company from the people on the production floor through the C-Suite that has influenced their lives from a young age and became even more dominant when they entered the workforce because they need to earn a living so they can put food on the table, clothes on the backs of their children, put them thru college and save for retirement. And those are just the basics.
For most of us, there are two constant struggles in our minds that hold us back, keep great businesses from being even greater and bad businesses from surviving.
First is the avoidance of failure. No matter how great things are going in your company, you and your employees will always be striving to avoid failure. Why? Because failure makes you look bad, can hurt your career and potentially ruin the company. This avoidance of failure becomes self-limiting, stifles creativeness and can sow dysfunction because most people will do anything not to be seen as the cause of a problem and deflect it onto someone else if it means protecting their ego and their job.
Second is the pursuit of success. We want to climb the corporate ladder, we want that bonus, we want to look good among our peers, we want our boss to praise us, we want, we want, we want. A business is made up of individual contributors and it is impossible for everyone to get an MVP trophy. This leads again, to self-serving decisions and dysfunction.
Have you ever been in bed with your wheels spinning, thinking about work? That is your mind working to avoid failure and pursue success so you don’t look bad.
This pursuit of success and avoidance of failure is human nature. We are naturally competitive and all have fight or flight triggers. This will never go away. However, as leaders, if we can create an environment of recognition where the relentless pursuit of success and avoidance of failure breeds unhappiness, dysfunction and drama, we will have a much better chance of having a company that lives up to is mission, purpose and values…while making money.
I would like to say that I came to this through years of research but I actually stole the idea, or, as they say in the knockoff business, “copied with pride”, found that it had an application in business and then I realized that I have lived it throughout my career.
This idea is based in Buddhism. Through my own personal journey of avoidance & pursuit, I started reading about Buddhism in the book called When Things Fall Apart by Pema Chodron. In the book I found the following concept about the cause of suffering. It can be summed up by the diagram below:
Buddhism suggests that there is a better way, The Middle Way or The Middle Path…The Path of the Warrior. On this path, like the warrior, we don’t avoid and pursue. We accept that we will encounter these successes and failures and we experience & deal with them AS THEY COME, we OWN them and move on.
As I wrote above, at the end of the day, all people in an organization have to feed their family, pay bills and save for retirement. They also reach for “Self Actualization” as Abraham Maslow wrote in his paper A Theory of Human Motivation. If this suffering can be minimized, Self Actualization becomes more attainable.
Knowing this, replace the words in the diagram above with words describing situations present every day in business:
Why does Buddhism also refer to this as the Path of the Warrior? My interpretation is because a warrior cannot contemplate victory or defeat in battle because doing so will surely lead to their death. For them, there is no time during battle for worrying about these things when the objectives are victory and survival. They are not interested in whether or not they will be promoted or demoted, and whether or not they will look good to their commander or peers.
This pursuit and avoidance is not supposed to be overt in business because business is supposed to be about teamwork and win-wins. The problem with this is that we are wired for pursuit and avoidance. How effective and how rock solid can your cultural foundation be when you and your employees, in the back of your minds, spend every day in this mode? Have you ever made a decision based on self-preservation or one that will allow you to avoid looking bad? Have you ever deflected a question from your boss or answered one in a vague way. If so, that is your mind avoiding looking bad.
Because of the suffering brought on by this pursuit and avoidance, what mistakes are being made, what dysfunctional current is flowing below the foundation, what turnover are you experiencing and how is all of this impacting everyone’s well being, your customer’s satisfaction, your bottom line and your ability to not just achieve but surpass your strategic objectives?
While we are wired this way, leadership can create an environment that minimizes its impact. One of the most important aspects of this environment is that it is one in which people are encouraged to own their mistakes, talk about what they learned from them and can be comfortable doing so because their boss supports them. When you run your next management meeting, try having your team go around the room and talk about a mistake they made in the business recently that they would not normally talk about in a public setting, start with yourself and you will see the levity in brings to that meeting.
Below is one of my favorite images that illustrate this concept of The Middle Path.
Here’s a question for you: Where does your mind spend its time in this photo? What about the minds of your employees?
People hate to make decisions and let’s face it, your people are not nearly as smart as you or they would have your job. Micro-managing gets a bad rap but the fact is that it streamlines your business because it ensures that every decision will be in line with what you want and it will also ensure that if and when your employees do make decisions, they will take a long time to contemplate them because they will be afraid of being wrong. And being wrong will only be further proof to them that you are the smartest person in the room.
Micro-managing is also really important to keep the company nimble and, on its toes, so that it can change at any time. Micro-managing accomplishes this by allowing you to constantly change your mind as you contemplate all of the fast decisions you made while trying to sleep at night. The more you thoughtfully approach second guessing your decisions, the more times you will change and tweak them and since everyone follows your lead, they will need to pivot. Knowing how your decisions always evolve will only further demonstrate to your employees that you know what you are doing and have the confidence to change course as needed.
Micro-managing also helps ensure that you will have a stable workforce because it will weed out the people who think they know their department, the company and the industry better than you do. You will be left with a loyal workforce who are so happy that they don’t have to make any decisions, they will never leave.
The downside to micro-managing is that when you do fail, it will be harder for you to blame other people but like any good decision maker, you know how to prioritize and since your goal is to create an Epic Failure, micro-managing takes a top priority over blaming others because having people smarter than you (if they even exist) making decisions that are based on succeeding will only make it that much harder to fail. You’ll find someone to blame later.
Hiring and retaining great talent has always been difficult for those who are striving to build a profitable and enduring business. However, as evidenced by the way you run your business, you want to fail. So how can you ensure that you hire the wrong people to help you achieve your goal? While one may think that is easy to do…just hire somebody woefully under qualified for every position and just like that you will fail! But wait…would you rather be a flash in the pan failure or would you rather fail in an epic manner? If you are looking for a quick way to fail, don’t waste your time reading my blog. My blog is for those who want to go big or go home, my blog is for those who want to f$!k up big-time.
So, hire people who are qualified. But while interviewing, make sure you both develop a quick connection with one another. Let that person sell you on why they should hire you. After all, lesson #1 was “Sell, sell, sell” so you need good sales people in every functional department even if they are not directly selling. Additionally, hiring people that you are able to personally connect with is a great way to surround yourself with people who worship the ground you walk on, because after all, as a leader it is important to be liked. If you are not liked no one will be willing to put up with your micro-managing, no one will crave your attention and above all, you won’t have people around to validate your ideas, strategies & objectives. In other words, you won’t be able to surround yourself with people who tell you what you want to hear.
Because some people are really good interviewers they may be able to fool you into thinking they like you (which is probably easy in the first place) so I have used a great question towards the end of the interview that really puts them on the spot. At the end of the interview, after I have stopped talking about myself and my company, I ask, “So…enough about me, now why don’t you tell me about me.” If they can get through that question without stumbling, you’ve got yourself a winner.
Takeaway: Just as important as hiring a qualified person is hiring someone with whom you have formed a connection because that connection will ensure loyalty which is critical when it becomes apparent to your employees that you are taking the company down because if they leave, you won’t have anyone to blame.
This one is pretty straight forward. If you stand for nothing, it will allow you to stay flexible which is incredibly important to accomplishing #001 Sell, sell, sell. What do I mean by “Stand for Nothing”? It can be interpreted as “Be all things to all people”. That way, you are always sure to keep everybody happy, which as you know, is really important to creating a great culture. It also means not developing any values by which your company operates. Values are tough to uphold when you are growing fast and can change at any time depending on the situation. Values also keep you confined to certain lanes, which means you will never get to move into the passing lane.
Values also get in the way of maximizing failure because if you abide by them it can lead to a solidly profitable company. Who would want that when the excitement is in failing, after all, who doesn’t love a good train wreck? There are many examples in business and politics where having values that you live and operate by lead to success but remember, your goal is to fail.
Takeaway: Culture, values and purpose (the latest buzzword) will impede on your ability to fail…avoid them at all costs.
Chances are, you will fail.
The greatest glory in living lies not in never falling, but in rising every time we fall.Ralph Waldo Emerson
For years I have wanted to write about failure. That is probably because I have never hit a home run and in the process have logged some major failures. In fact, the three major milestones in my career all wound up as failures…or did they? I have spent the last thirty years trying to get myself on the cover of Fortune and during that time learned a lot about failure and myself. I have had two failed businesses and after the second, landed on my feet as a turnaround CEO of a $70 million business and while I was successful turning it around, I ultimately got fired. In between all of this, I spent seven years in the turnaround business beginning in 2008, yes, that 2008. I have failed, watched failure and prevented many failures.
The SBA estimates that 30% of businesses fail in the first two years, 50% fail in the first five years and a whopping 66% in the first ten years. While this tells us that the longer you are in business, the more difficult it is to survive, it also demonstrates that as time goes on, failures rise as a result of poor decisions that build on one another until there is no way to turn it around.
There is an entire industry built on success and self improvement, but I am here to tell you that success is not about what you do right, its about hitting singles and avoiding the wrong decisions.
This blog will explore failure. My failures, the failures of other business people and what you need to do to increase the chances of failure for yourself and your company. Yes, I am going to tell you how to fail.
My hope for this blog is that by learning from me and others and by understanding the things that lead to failure, you will succeed and build a business that can endure anything.