Five Reasons Your Business Will Underperform in 2011

Are you a Genius or a Genius Maker? How about your senior team – are they Geniuses or Genius Makers?

If you’re the smartest person in the room you’re a genius. If you surround yourself with the smartest people in the room and continually strive to help them get even smarter, you’re a genius maker.

According to Liz Wiseman, author of “Multipliers – How the Best Leaders Make Everyone Smarter,” Multipliers are genius makers who bring out intelligence in others and build collective, viral intelligence in organizations. Diminishers, on the other hand, are geniuses. Absorbed in their own intelligence, they stifle others and deplete the organization of crucial intelligence and capability.

Diminishers are usually unaware of their behavior and its consequences. According to Wiseman’s research, Multipliers get TWICE the capability from their people as Diminishers. That’s like doubling your staff without increasing overhead! So there is a massive drag on productivity and engagement that Diminishers pay for their actions.

Unfortunately, statistically speaking, most of us are unintentional Diminishers. This means that you and your management team likely exhibit diminishing behaviors, whether you realize it or not. This is the first reason that your business is going to underperform in 2011:

1. You and Your Management Team Exhibit Diminishing Behaviors

To overcome this massive drag on productivity, first make sure that your management team is aware of Wiseman’s research and of the consequences of diminishing behavior. Read the book and discuss it as a team, take the author’s Accidental Diminisher Quiz to better understand your own diminishing tendencies, and begin to call out Genius (diminishing) behaviors you observe in one another.

Here are the other reasons why I believe that your business will underperform next year:

2. You Believe What You Hear

What you believe impacts the results you achieve. If you pay too much attention to “conventional wisdom,” including media coverage of the economy, your beliefs and expectations from your business will diminish which, in turn, yields underperformance. I’d be a crazy wealthy man if I had a dime for every time I hear “the economy” excuse from CEOs and Managing Partners to justify their lackluster results.

You, in turn, hear and accept excuses from your team that help them justify your own and their own failures and shortcomings. “We couldn’t have won this deal anyway based on the competition’s price” – EXCUSE. “It’s impossible to get the bank to extend our line of credit – nobody’s lending” – EXCUSE. “We’re glad we stayed flat this year given the economic conditions” – EXCUSE. Sound familiar?

To overcome beliefs in conventional wisdom and institutional excuse making, first change your surroundings. Because you are a product of those around you and of what you are repetitively exposed to, it might be time to find friends and colleagues who share a more positive “can do” outlook. A little distance from negative people and excuse makers will go a long way to inoculate you from picking up the bug. You might also consider doing something I did several years ago – stop consuming general media, which is predominantly negative (good news, after all, doesn’t sell!) and of little practical use to any of us. Finally, begin to recognize excuse making in yourself and in others – and call it out.

3. You Are Not Actively Combating Commoditization

I heard author and consultant Bob Bloom speak this week at the Gazelles Fortune Growth Summit. He mentioned that Procter & Gamble is going to begin selling their products – like Tide, Charmin and Head & Shoulders – directly to consumers via the internet. Memo to grocery distributors and stores: UH OH!

This case of disintermediation is a symptom that illustrates how technology and the increased amount of information available to buyers is speeding commoditization in virtually every industry and profession. For example, if I need to hire an attorney to review a contract, I believe that there are probably 100 within a 10 mile radius of my office who have the capability to do a good job for me. Since they all seem the same, all I’m left with is price to determine who I will hire. This pattern is happening in your industry right now, whether you realize it or not and it is already impacting your ability to generate the results you want.

It is imperative that you actively and doggedly combat commoditization – unless, of course, selling a commodity is part of your business strategy. Start by defining your ideal and minimally acceptable clients to find a niche where you can provide uncommon amounts of value. The days of trying to be “all things to all people” – a path littered with razor thin margins and shuttered businesses – are long gone. Once you have clarity on your niche, stop talking about value added and start finding ways to beat your clients and prospects over the head with a value club – they have to see it clearly and it has to be relevant to them (not to you!).

4. You Lack Discipline and a Plan of Action

As your organization grows more complex, it becomes increasingly difficult to put knowledge and understanding into practice. It’s not about “what” to do (in most cases you and your senior team know this) – it’s about “how” to get it done through the work of others. Many talk about this; few actually pull it off – because they don’t know how to neutralize the complexity that inevitably creeps into a growing business. An inability to create and stick to a plan of action and instill discipline, habits, and alignment that are conducive to producing predictable results condemns many organizations to mediocrity.

There are four critical decisions that must be evaluated and monitored in every business. They are:

Strategy – How are we going to generate revenue, for what, from whom?

Cash – How are we going to accelerate cash flow in the business?

People – How are we going to attract, develop, and retain “A” players?

Execution – How will we align the organization, create accountability, and manage the flow of information to ensure we stay on track?

Make time to plan for your business and implement a process to continually evaluate these four critical decisions.

5. You Are Underinvesting in Your Leadership Development and Growth

I have yet to encounter an organization where the growth rate of the business exceeds the personal growth rate of the senior team. You and your senior team must grow for your business to grow. Failing to acknowledge and act on this leads to insular thinking, less innovation, an inability to react to competitive and environmental threats, and an organization that spends most of its time living in the past at the expense of the future. All strengths and weaknesses in your organization can be traced directly back to the leadership team and your levels of trust, competence, discipline, alignment, and respect – each of which requires continual care, planning, and development.

Consider:

What are you reading? What industry and general business conferences do you attend? Name 3 business growth / leadership speakers you’ve heard in the last 12 months. When was the last time you paid someone for business advice?

Set goals, a budget, and time for this! Most high performing growth firms work with a coach who serves as a catalyst to generate leadership growth. You must grow for your business to grow.

Choose Your Next Step

As you begin to contemplate making 2011 the year you want it to be, pick 1 of these 5 reasons for underperformance. Focus on it for the next 90 days with your team – make time, make changes, and implement. Even with a modest start, you’ll be on your way to a more predictable and sustainable growth trajectory for your business.

Mark Green is a business growth expert who works with companies to help them implement a proven, easy-to-use framework to run and grow the business faster and more profitably, while expending less effort and less time. To learn more about Mark or his firm, visit his website or contact him directly at (888) 720-7337 or Mark.Green@Performance-Dynamics.net.