Management + Systems

By Jason Bader, The Distribution Team

Recently I have been coming up against some challenging situations in my practice regarding struggling family businesses and owners practically killing themselves to keep the ship afloat. A lot of them are struggling to find themselves and create their identity, but when I dug a little deeper, I realised a lot of the issues were steeped in the curse of ego.

Now some would argue that for entrepreneurs to succeed they need a manageable dose of ego, but that ego can also actually prevent people from building a successful distribution organisation. 

Over the past few years, I have worked with a few small business owners who have found themselves at a crossroads. Should they pour enormous time and resources into an entity that might be better off sold? Is the juice worth the squeeze? First generation founders would cringe at this notion. They believe hard work and dedication will always prevail and that businesses only fail when complacence and negligence enter the culture. I’m not sure I agree. The technology arms race, the changing desires of the workforce, and the challenges of global supply, may be too great an obstacle to overcome for some. However, for many companies, all the ‘elbow grease’ in the world isn’t going to save them. The trouble is the next generation of owners for these entities have been conditioned to believe that putting the company in the hands of another is a failure. In some instances, I have seen owners so overcome with guilt about a possible sale, that they pull out of a deal that would likely save the entity and those who depend on it for their income. That’s not leadership. It’s pure ego.

Over the years, I have been asked many times what a struggling business owner should do. This can be a challenge for me to be brutally honest. This was especially true early in my advisory career. I bought into the notion that there was always something I could do, or say, to bring them out of a tailspin. That was my ego wanting a certain outcome. It wasn’t that my heart was in the wrong place, I truly wanted them to succeed, the failure was my inability to recommend what was really best for the client. In many cases, the best advice I could have given was to clean up the books and get their company on the market. Ego is a fear driven emotion masking itself as strength. 

Is it really a failure to sell your family business? Yep, I went there. This is a scary one and I suspect that it resonates with many next generation owners. Come on, let’s be honest. When we see a next generation owner ‘sell-out’ to a private equity firm or other consolidator, don’t we experience some degree of negative thought? Sure, we congratulate our colleague, but we still whisper behind their back. Maybe it’s jealousy or another defect of character coming out to play. I don’t know, but I can’t deny it. Even though it is the absolute right thing to do for the financial health of the entity, it always comes with a little tarnish. In privately held companies, and this is very true in the distribution arena, we don’t respect the passing of a business. This is ego getting the upper hand on better judgement. 

Stop falling in love with the desired outcome. This emotional attachment to one specific outcome makes us blind to potential solutions. When my desired outcome does not come to fruition, no matter how many times I try to pound the square peg into the round hole, I become frustrated and blocked from the creative entrepreneur inside of me. When ego-based thinking takes hold, failure is seen as the worst possible outcome. On the contrary, failure is simply a way to move on to a better path. Therefore, we must be at peace with failure. 

Entrepreneurism is all about taking risks. Don’t our greatest learning moments come when we step outside of conventional thought and method? By its very nature, risk invites failure. Think about some of the brilliant ideas you or your company has come up with over the years. Have all of them been winners? I can think of some business directions in my career that failed miserably. At the time, I thought it was the greatest idea ever. Then I was humbled. Fortunately, I recovered; but it sure stung. I like to tell people that business failures are simply tuition. I must pay my tuition to get an education. Some lessons are more expensive, but they all involve tuition. 

Abandon ego’s attachment to success. Rather than believing that the desired outcome is the only way that success can be achieved, take time to become a master of the process. Find satisfaction in the effort you place into the process and learn to become a student of your journey. Becoming fixated on the outcome will only lead to disappointment, frustration and resentment. When we become selfish, self-centered and take credit for organisational successes, ego is coming out to play. Falling into its trap will prevent you from reaching your creative potential. Humility is the antithesis of ego. My favourite definition of humility is the ability to remain teachable. Become a student of your organisational challenges. Study how others overcome these challenges, and remember, it’s ok to ask for help. Good luck and know that I am always here to share my experience.  

About the author

Jason Bader is a holistic distribution advisor who is passionate about helping business owners solve challenges, generate wealth and achieve personal goals.  He can be found speaking at several industry events throughout the year, providing executive coaching services to private clients and letting his thoughts be known in an industry publication or two.  Last year, he launched his first podcast, Distribution Talk.  Episodes can be found at www.distributiontalk.com and most podcast applications. He can also be reached via email at jason@distributionteam.com