As shop owners, we are all too familiar with the highs and lows of running a business. Last month, I discussed employee theft, an unfortunate reality many of us face. This month, let's tackle another critical topic: how to manage major setbacks that often accompany them when growing your shop.
Setbacks are an inevitable part of any business journey. While they are challenging, they offer learning opportunities. Stressful and painful experiences like catching a trusted employee stealing, someone not doing the job you paid them for, or a technical mistake that caused a fire should make us to slow down and think more carefully about our decisions, policies, and procedures. This introspection is important. It forces us to discover the root cause and, hopefully, ensures that we don't repeat the same mistakes.
As shop owners, we strive to build a team to drive our vision forward. However, we all know the process of hiring the right people has its challenges and pitfalls. I want to share a personal story that shows the importance of diligence in the hiring process and how to recover from a major setback.
My business was growing fast, and I found myself working long hours, often feeling overwhelmed and desperate for competent help. During this time, I met someone who seemed to be the perfect candidate for a much-needed leadership role. This individual could talk the talk and convinced everyone, including me, that he was the best of the best… sound familiar?
In my eagerness to fill the position and alleviate some of my workload, I made a critical mistake: I hired him without conducting a thorough background check or reference check. I ignored the initial yellow flags, and the more concerning orange ones, and I placed him in a position of authority way too quickly.
At first, things seemed to be going well. However, as time passed, more red flags began to appear. His decisions started causing friction within the team, his promises went unfulfilled, and his management style created a toxic work environment. He had done a good job undermining me to my own team and had made veiled threats to them that I was not to be told what conversations were going on behind my back. By the time I recognized the red flags for what they were, the damage had already been done. I lost good employees and clients, and many nights of sleep.
The impact was significant. Trust within the team was eroded, client relationships were strained, vendor partnerships were jeopardized, and the financial cost was substantial. The conman had infiltrated my business, causing major damage in a short amount of time.
Rebuilding and Recovering
The road to recovery was not easy but a necessary journey. Here are the steps I took to rebuild trust and repair the damage:
Admitting the Mistake: The first step was to acknowledge the mistake to myself and to my team. Transparency was important in restoring trust. I had to own up to my error in judgment and communicate openly about the steps I would take to rectify the situation.
Removing the Problem: Once the issues were clear, I took decisive action to remove the individual from the position. This was a challenging process, but it was necessary to stop further damage.
Rebuilding Team Trust: Re-establishing trust with the team was critical. This involved regular meetings, open communication, and creating an environment where team members felt safe to voice their concerns and ideas.
Reconnecting with Clients and Vendors: I personally contacted our clients and vendors to explain the situation, apologize, and assure them of our commitment to fixing the problems he created.
Financial Recovery: The financial impact was significant, but we gradually stabilized the business by tightening our budget.
Implementing Better Hiring Practices: Learning from this experience, we tuned up our hiring process. We implemented strict background and reference checks and involved multiple team members in the interview process to ensure a well-rounded evaluation of each candidate.
No one bats 1,000 when it comes to recruiting and hiring. Sometimes, despite our best efforts, unqualified individuals can infiltrate even the most well-run businesses and cause significant damage. However, by learning from these experiences, we can rebuild stronger and more resilient teams. My wife has warned me for years that I am a “good horse” for people to hook their wagons to, and I need to watch out for people who want to take advantage of me and my success. Like a lot of you, we want to believe in the best of people, and they have the best intentions. Unfortunately, scam artists, conmen, and dishonest people are always scouting for their next opportunity to take advantage of a situation, company, or person.
I repeatedly told myself that setbacks are an opportunity to learn and grow, giving myself the same advice I would give my clients: By facing them head-on and implementing the lessons learned, we can emerge better equipped to handle future challenges.
The key question to ask yourself after a setback is, "Have you learned from this experience?" If the answer is “yes”, then you are already on the right path. Learning and adapting are skills needed to be a successful entrepreneur. Implementing these lessons into your business can transform setbacks into stepping stones.
When your business is in growth mode, slowing down can feel counterintuitive. However, as we mature as business owners, developing patience and becoming more methodical in our decision-making process is essential. This approach allows us to see potential landmines and hopefully avoid them—a lesson I am still learning!
Reflect on the following: Are you rushing decisions in the pursuit of short-term gains at the expense of long-term stability? Aligning short and long-term goals is crucial for sustainable growth. Often, setbacks occur when we chase quick wins, neglecting the broader picture. Taking a step back to evaluate your decisions' immediate and future impacts can help you achieve a balanced approach to growth.
Identifying and avoiding what caused the issue is critical. This requires a combination of experience, intuition, and a methodical approach to decision-making. By slowing down and being more deliberate, you can better identify these potentially bad decisions before they cause harm. This is one of the reasons my Mastermind group is so important, as we act as each other’s board of directors and can talk through major decisions together.
Once you've identified and analyzed the setback, the next step is to implement the needed changes. This may involve revising your business plan, restructuring your team, or changing your leadership approach. The willingness to adapt and make necessary changes is what sets successful businesses apart from those that never grow.
It's also essential to avoid self-blame in challenging situations. Remember, business is inherently tough, and setbacks are part of the journey. The focus should be on learning and growth, not on dwelling on past mistakes. (Read that again!)
Think about the next ten years, not just the next ten minutes. This long-term perspective will help you make decisions that benefit you now and in the future. Align your short-term actions with your long-term goals to ensure consistent and sustainable growth toward your goals.
Setbacks are tough, but they are also powerful learning experiences. By embracing these challenges, learning from them, and implementing changes, you can turn setbacks into opportunities for growth. Remember, the journey of hiring people and growing your business is a marathon, not a sprint. Your best allies in navigating this journey are patience, methodical decision-making, having the right advisors around you and clear vision.
I would love to hear your thoughts on how you have faced and overcome challenges. Email me at [email protected]
