Unstuck: How Businesses Get Stuck & How Your's Can Get Unstuck

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Introduction

DEFINING MOMENTS

Theme #1: The same qualities that help you to become a successful entrepreneur are also the ones that get you stuck.

I’ll never forget it. Just like a lot of kids, I was getting ready to graduate from college and I wasn’t sure what to do. The economy wasn’t good and jobs were hard to come by. My liberal arts degree didn’t help me too much either. I thought about law school, but I struggle with tedium. Graduate school in International Relations was a possibility, but growing up in Kansas didn’t exactly give the world outlook needed for a career in diplomacy. I came home from college one weekend and told my parents that I was going to get an M.B.A. At that time, most people didn’t even know what M.B.A.s were. My mother said What will that let you do, sell shoes at J.C. Penney?

My father worked for the Post Office and my mother as a school secretary. In their view, a college degree (something they never had) was a requirement for success. After that was accomplished, they didn’t have a clue how it translated to getting a job. I didn’t have many other choices, so I decided to give business school a try. During school I developed a passion for marketing, and when I graduated, I had several job offers (something that astounded my parents). I took an offer in marketing from Ford Motor Company because I thought I could learn more about marketing and sales from a large, multi-national company.

It didn’t take long for feelings of restlessness to kick in. There was something unsatisfying about the bureaucracy of corporate life. I tried a couple of other large companies before I knew, deep-down, I needed to be an entrepreneur. Like most folks who strike out on their own, I threw caution to the wind, cashed in what few assets I had, borrowed money from anyone who would listen, and told my wife that everything would be okay.

The point to this story is not about the characteristics needed to be an entrepreneur. Most business owners seem to have a deep-rooted entrepreneurial drive to take the risks necessary to start a company. We hear success stories, but hardly anything about companies that get stuck along the way.

Theme # 2: It sucks to be stuck.

I ran my first company about six years before the euphoria wore off. Like many other entrepreneurs, we teetered on the brink of insolvency for the first couple of years. Then, we hit an amazing growth spurt with a couple of big client wins and were off to the races. New people, new ideas, and some great clients propelled exciting growth. But then everything just stopped in its tracks. We didn’t go downhill; we plateaued even though the company continued to make good money. In fact, we had some eye-popping gross margins. You would think life was good.

The first seeds of discontent began showing up. I wasn’t enjoying the work, the travel, or settling employee disputes. We continued on this plateau for several years until, one day, I convinced my partner that it was time to put the company up for sale. It took over a year to market the company, but after a few unsuccessful negotiations, we weren’t able to get a deal. My partner said, We’re still making good money. Let’s just be happy with where we’re at. I couldn’t think of anything worse.

For business owners who think it is okay to keep plugging away, this story is for you. Staying the course might work for the founder, but it usually doesn’t inspire employees. Employees want to work for a company that is exciting, growing, and which holds new opportunities. If you’re stuck long enough, eventually the wheels come off.

Theme #3: Getting unstuck is hard work.

It was something I hadn’t experienced since those first couple of jobs out of school, when I worked for someone other than myself. A private equity firm retained me to turn around a marketing company that had gone beyond the point of being stuck; it was headed downhill. I thought, No problem. This should take a couple of years, and it’ll be back to its glory days. We did get revenues up 39%, and profits went from a negative $500k to about $2M per year. But it didn’t take two years. It took closer to six.

Everyone has obstacles, but we had some doozies. First, I did a quick talent assessment of the 90 employees, and about 45% were C-players. Second, the private equity firm wanted to sell the company quickly and did not have much patience for lengthy turnaround strategies. Finally, the firm competed against larger companies that had many more resources and talent than our little firm in upstate New York. You can see why it wasn’t a quick turnaround. The good news is that we were able to reverse course and get the company growing again.

When I look back at this defining moment in my life, the message is pretty clear. It takes time, a laser-like focus, and more perseverance than most people have.

THE UNRECIPE

THE UNCOLA CAMPAIGN

In 1967, 7 Up® launched one of the best advertising campaigns of all time. Instead of fighting Coca-Cola and Pepsi head-on by introducing its own cola drink, 7 Up decided to position itself as the best alternative to cola, letting the two behemoths fight it out. The positioning was very clear to the public, and it paid off. Within a short period of time, sales of 7 Up skyrocketed, and its market share increased for several years.

Many excellent business books proclaim a proprietary model. By adopting the author’s formula, success is bound to follow. Is this how business owners really use the information? It seems to me that most often we pick and choose different topics that are of interest to our company, and implement the ideas based on how important they are to our short term goals. Therefore, I want to take a page out of 7UP®’s book, and position Unstuck as the alternative to the other business books out there. Instead of presenting a model or formula, think of this book as a collection of ideas and best practices that you can pick and choose from based on the needs of your company.

THE UNRECIPE DEFINED

While trying to think of a name for this new approach, the UNrecipe seemed stuck in my mind. I ran a Google search on the word unrecipe just to see if this term had been used before. What I found was an interesting blog from the half-hearted housewife who wrote a series of recipes:

…for the half-hearted housewife in each of us — [they are]not recipes so much as guidelines. No measurements (usually) and suggestions for ingredient substitutes.

Because sometimes we don’t feel like measuring or running to the store because we don’t have the one thing called for in the recipe.

(Half-Hearted Housewife, 2011)

Voila! The positioning for my book was born. It wouldn’t be a model for small and medium-sized business owners; it would be more about guidelines on how to get companies growing again. Hence, if you find that one thing that sounds plausible for your company, give it a try.

USING THIS BOOK

Part 1 of this book addresses how businesses plateau. The following four points show how a business stops growing. They are:

PART 1: BEING STUCK

1.   You — the mental and psychological barriers to growth that come with entrepreneurship.

2.   Self-Inflicted Wounds — the decisions business owners have in their control which will lead them down the wrong path.

3.   Bad Decisions — financial, people, and/or strategy blunders that can take you down.

4.   Rock Walls — natural barriers to growth that occur as businesses grow.

Part 2 is about getting unstuck and it also has four parts. In this section, I present the best growth strategies for small and medium-sized businesses (SMBs):

PART 2: GETTING UNSTUCK

5.   Diagnosis — using tools that pinpoint why your growth has stalled.

6.   Strategy Development — analyzing the main drivers of business growth and developing strategies that give you a competitive advantage.

7.   Implementation — executing these strategies so they will be realized and drive growth.

8.   Get Started — developing a handful of key priorities to get your company unstuck.

I do not claim that the Unstuck framework (as loosely constructed as it is) will work for everyone. However, based on my experiences, I believe these ideas will help your team come up with new ideas to jump-start growth. I may not be able to guarantee your success, but I do believe these best practices are the place to start.

PART I

BEING STUCK

CHAPTER 1

YOU

Iwas lying on one of those inflatable air mattresses in my swimming pool. It was one of those blistering hot days in the Midwest. The cool water, a couple of beers, and a day of solitude should have felt good. It was a Monday and I wasn’t used to being at home with nothing to do .

This day should have been awesome. I had just sold my company to my business partner. The marketing firm I started twelve years earlier had ceased being fun about ten years before that. As I look back, the bad days were actually the fun days. I had challenges like most entrepreneurs: The notes came due to my original investors, and I didn’t know how to pay them back, or I had to get a home equity loan to make payroll. Could it have been these difficult times were what I needed to keep my juices flowing?

My entrepreneurial dream had become my personal nightmare. I was running in place. I was making good money, but revenues were flat. The marketing industry was changing rapidly with the advent of new media, technologies and competitors, but we didn’t change. We just kept doing the same old thing, and I got really bored. I tried a lot of different things to rejuvenate myself and my business. I tried to find fulfillment in a lot of different ways. I bought a vacation home, a nice boat, a fancy car and a dream house. None of it worked. I just kept getting into a deeper and deeper funk.

Believe it or not, it got worse from there. I told myself that I’d take a year off and recharge my batteries. During that time, I learned that all the money and the toys can disappear very quickly. Worse yet, my wife and I split after 23 years of marriage. Friends, business colleagues, and my family thought that I had gone off the deep end. Perhaps I had.

I tell this story not to solicit sympathy. I learned that business ownership can take a huge toll. It’s definitely not as glamorous as it is on Shark Tank or in the trade publications. There’s a dark side to being stuck.

Later events added to the gloomy circumstances, and so I became intrigued with studying how small businesses get stuck (either through their own fault or from things completely out of the owner’s control). For example, once a business’s revenues start trending down, only 4% of those companies reverse the trend. (McKee, 2009)

I started looking for the best practices for growing smaller companies, particularly those that experience some bumps in the road. There are a variety of best practices out there. In fact, I wish I had found some of these practices many years earlier. Maybe I could have avoided these unpleasant times. Many of these so-called best practices are geared for larger companies, but, I wanted to help small and medium-sized companies (SMBs), so I began working with business owners and applying these ideas. My conclusion was that most of these concepts are a little too complex for the overworked and harried SMB owner.

What I have done in this book is explore how small and growing businesses get stuck. Unlike me, you may be able to avoid some of these pitfalls. More importantly, I’ve researched some of the best business ideas for growing companies and scaled them to smaller businesses. The ancient Mayans said, Out of darkness comes the light. Who knew the Mayans understood small businesses so well?

THE FOUR EMOTIONAL PHASES OF ENTREPRENEURSHIP

You may have heard the analogy that businesses are like a bottle of wine; the bottleneck is at the top of the bottle. Just like a bottle of wine, the person at the top of the company could be what stops it from growing.

Businesses go through certain phases of growth which we will explore in Chapter 4. What you may not be so familiar with is that CEOs and business owners also go through different emotional phases. This emotional roller-coaster is one of the reasons why many business owners get stuck. Andrew Jensen is a business growth consultant who has devised four phases of emotions that entrepreneurs pass through: the Busy Phase, the Second Thoughts Phase, The Self-Doubt Phase and the Been There, Done That Phase (Jensen, 4 Phases of Entrepreneurship, 2014).

The Busy Phase — When a company first starts, entrepreneurs experiences exhilaration because they have just taken the biggest leap of their lives. Once the excitement wears off, however, the next emotion is usually loneliness. Old jobs and old friends have been jettisoned in favor of their new life. It’s not unusual for this feeling of loneliness to change to feeling over-committed. New business owners begin doubting their abilities to handle their time, finances, family, and friends.

The Second Thoughts Phase — After the business has succeeded in getting off the ground, many entrepreneurs feel lost, and search for a new identity as a business owner. They soon realize that there’s little chance of going back to their former jobs, and decide to plow ahead. The initial enthusiasm for the business fades and is replaced by self-doubt. Entrepreneurial experts Arbarnel and Freeman say, You now know enough to realize just how much you don’t know about what you want to do. (Jensen, The Second Thoughts Phase of Entrepreneurial Emotions, 2014)

The Self-Doubt Phase — The doubts that started creeping up in the second phase can now turn into full-blown self-doubt. This happens pretty quickly. It’s in this stage where the entrepreneur loses one of their original clients or investors balk at their lack of returns. Entrepreneurs are thoroughly committed at this point, so the concept of quitting hasn’t entered the picture (yet).

The Been There, Done That Phase — The business now defines the entrepreneur’s life. Fatigue sets in from all the long hours getting the company to this point. Sometimes the fatigue even morphs into discontent or depression. The question many ask is, Will I always have to work this hard? Another problem in this phase is boredom. All those things that used to cause sleepless nights are now not so difficult, but the routines and processes they’ve established to run the business also make it less exciting. The good news, however, is that success often lets them feel simple contentment from a job well done.

BEING STUCK — EMOTIONALLY & PSYCHOLOGICALLY

It’s hard to know if the stuck feeling described in the fourth phase of entrepreneurship is from stress, or if you’re really burned-out. CEOs often try cures that aggravate the problem rather than fix it. Steven Berglas, writing in Inc. magazine said:

Stressed chief executives, exhausted by confronting threats, need a two-week vacation. Burned-out CEOs, bored and doubting that they still have the vitality they once had, go stir-crazy on a relaxing vacation.

(Berglas, 1996)

FEELING STUCK

Since this book is about how entrepreneurs get stuck, I will mostly be dealing with the been there, done that phase. It’s what I call entrepreneurial boredom, and it leads to feelings of being trapped. I also like the term coined by Steven Berglas, which he calls the provider paradox. It’s when you feel duty-bound to others, like your spouse, employees or business partners, because you’ve achieved a certain level of success, and you don’t want to let them down.

Some business owners are like Sisyphus in ancient Greek mythology. He was the King of Corinth who pushed the rock up the hill only to have it roll back down again.