There are plenty of examples in business history of firms that expanded at phenomenal rates, frequently aided and abetted by acquisitions, becoming the darlings of the stock market, only to crash into the dust shortly afterwards.
It’s all too easy to blame such colossal downfalls (just think of Enron or WorldCom) on arrogance, mismanagement or barefaced fraud – and I’ve heard people say as much during a coaching session. Usually when they’re trying to garner my endorsement for a strategy or issue that I’m more interested in exploring and probing.
But it’s vital not to confuse symptoms of a problem (like mismanagement and fraud) with its true cause. These companies had leaders who believed they were in a super-charged race that they needed to win, and they convinced themselves they were right at all times, no matter how reckless or harebrained their course of action turned out to be in the fullness of time.
When a client seems to be flooring the accelerator during coaching sessions, I usually reach for the emergency brake rather than thrill to the speed. There is always rivalry and competition in business. But if trumping the competition becomes the be-all and end-all of a leader’s approach, he or she will nine times out of ten end up hurting their own chances of success.
When London Business School academic Freek Vermeulen conducted a large statistic study a few years ago exploring the growth paths of 25 multinationals over their lifespans, he discovered something profoundly significant. Those employing smooth and steady expansion strategies ended up with far superior profitability, while those that saw themselves in a race to be won typically accelerated their businesses directly into dire straits.
This is why I seek to bring out a promising executive’s inner gardener during coaching rather than his all-too-apparent inner Lewis Hamilton. There’s a time and a place for drive, ambition and energy, but it can’t be the only string to one’s bow.
More next time.