IBUILT a recruitment organisation which spanned Europe and then nearly lost the whole thing when the market turned down post 9/11. And the fact that it’s now back on its feet again, with offices in 30 countries, is because I learned a lot more from getting things wrong than I ever did from getting them right.
If you’ve spent more than a few minutes in an airport book-store lately, you’ll be all too aware how many books there are in the market written by entrepreneurs and corporate CEOs keen to give you the story behind their dazzling success. But in the real world, hubris can turn to nemesis very easily – as I’m only too aware.
This was the start point of the book How they Blew It which I co-wrote last year with business journalist Jamie Oliver. The book looks at sixteen examples of how over-confidence and downright stupidity brought down a succession of high flyers such as Bernie Ebbers, Dick Fuld and our very own Mark Goldberg. So what lessons can be learned from these former members of the “great and good” club?
1) Believe in the miracle of the mundane
Most very successful businesses are built on simple ideas and processes. But once that success reaches a certain level, it’s often tempting for their creators and managers to lose sight of simplicity, because it’s just not exciting enough. This in turn can create a “bunker mentality” where the people running a business lose touch with the front line and start believing they can get away with anything. Just look at the madness going on within Lehman Brothers, Enron or Worldcom before the bailiffs came knocking for jaw-dropping examples of where this can lead.
2) Remember the basics
Losing touch with the basics can also prompt highly successful entrepreneurs to abandon the key business skills that got them to the top in the first place, as if they were somehow no longer needed when the bank account hit a particular figure. Mark Goldberg built a highly profitable recruitment business and a £40m fortune and then decided to achieve his boyhood dream of owning a football team. But instead of applying sound negotiation principles to his new venture he simply asked Ron Noades, the chairman of Crystal Palace, how much he would like for it and then stumped up over £22m for the club without any of the key assets such as the stadium it played in. The result? Bankruptcy within two years.
3) Take your own advice
If you’ve built a profitable company then the chances are that you know what you are doing. So why stop taking your own advice? Property dealer Peter Klimt once told an interviewer, “You have to create an infrastructure. Without that what you’re doing is just a series of deals, a sequence of events, not creating a business.” He then promptly failed to build that infrastructure and his company collapsed. And finally...
4) Don’t believe your own PR
When a Roman general returned in triumph a slave rode in their chariot reminding them they were only human. Perhaps every entrepreneur needs a similar voice or reason today.
Tony Goodwin is CEO of recruitment specialist, Antal international, and co-author of How They Blew It published by Kogan Page.