2009 is on pace to record close to 150,000 commercial bankruptcies to go along with almost 1.5 million total bankruptcies. That is a lot of lost wealth and lot of crushed dreams. Businesses have failed because leadership was poorly matched with the situation they encountered. Whether it came on suddenly or gradually, the leadership missed important steps to preventing the failure from happening.
How do you prevent getting into such a dire situation when the best choice you have left is to ruin your credit rating and get into a disastrous financial situation for your organization? You have forethought and rely on these three steps.
Obstacles are a guide post
Along the way to every bankruptcy were poor decisions and misunderstood obstacles. Obstacles are not always best dealt with by waiting from them to get out of the way. You can't throw money at obstacles and hope that will make them to go away. Just going around them and not considering the new direction you just took is also a poor decision.
So what do you do with obstacles? Sometimes obstacles are an indicator a new direction is needed. But make sure you know where the new path is heading other than simply around the obstacle. When you encounter an obstacle to the normal flow of your business, stop a minute and think what it means.
Obstacles will show you what you are doing incorrectly if you stop and pay attention. Most people are of the mind set to plow forward and charge through on the same path they have always taken. In these times of rapid upheaval change, it's the right time to stop and think what your obstacles are telling you. They could be warning signs of greater problems down your normal path.
Refuse to lose
What does it mean to refuse to lose? Continue to bang your head against a wall until you are unconscious? Of course not, "refuse to lose" is more about commitment and dedication with a healthy mix of business savvy.
Bankruptcy had become too easy in this country and poor decision makers were using it to wipe the slate clean of mistakes to get a fresh start and letting others pay for their mistakes without making the effort to save the mess they created. The bankruptcy reforms of 2005 tightened the rules on these folks making it tougher to file for bankruptcies, but the mentality of business owners haven’t adjusted as fast as the law.
I see business leaders throwing in the towel because the work seems overwhelming. I've seen small businesses disappear because owners simply quit. Most business failures don't happen overnight unless there was a disaster such as a fire or a devastating law suit. This is not a popular opinion I know, but most businesses fail because leaders either were not paying attention or didn't have the energy to do what it takes to refuse to lose. If there was ever a time to have mental toughness, now is the time.
When you dig deep surprises happen
Innovation never happens unless someone is trying to solve as problem. When times are challenging and you feel backed against a wall, dig deep for new ideas, fresh thinking and new solutions.
We never know what we are fully capable of until we are fully tested. Don't shy away from challenges, embrace them. Don't throw in the towel, stoke that fire from within and drive harder. Failure? It doesn't stand a chance when you are fully engaged and committed to coming out on top.
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