The definition of insanity

The cold hard truth is, if your business is not performing to the level you want or, even worse, failing and haemorrhaging money, it’s your fault.



When I first started in business, my main goal was to build something up from nothing to be a market leader in its field. Right below that was creating a company where the people actually looked forward to coming to work. Delving into that wish a bit further, I wanted everyone whom I had ever employed to stay with the company for life. I read all the books I could and went to every seminar about leadership, building your company, achieving goals. You name it; I went on it.

I got all the advice I could and set about building my empire. About four years in, things were going really well. Everything I touched seemed to turn to gold and I could do no wrong. My ego was through the roof. In my wisdom, I decided to open a branch in Wellington. It was going to be easy. After all, I’d gone from nothing to having a very successful business in no time at all. Sure, I’d seen and heard of other businesses that had failed, but hey, I was a winner, look at what I’d achieved already, how could I possibly fail … I knew everything!

Therefore, I opened up in Wellington. I’d done everything right, made sure any customers I already had in Auckland would support me, hired the ex-manager of one of my competitors in Wellington, did all my forecasting and projections – I was set.

Things took off with a hiss and a roar … backwards. The first month, sales were well under 25 percent of what I had thought they would be. One of my larger customers lost more than half their business in Wellington the month before we opened. My suppliers were a little hesitant to say the least. One of them was even told by one of my competitors that if they supplied me they would lose the business they had with them and they had been around for 20 years. Stupidly, I wasn’t put off in the least at this stage.

By month four, things hadn’t improved at all and I was spending a week in Wellington and a week in Auckland doing neither branch any justice. I always do monthly profit and loss statements so I know where I am and I’d gone from the previous four years making good net profits every month to making a loss for the last four months in a row. Now I was concerned, but I just kept trucking on doing what I was doing.

Six months into it and this whole ‘open another branch’ idea had become my worst nightmare. We were absolutely haemorrhaging money. The company didn’t just graze its knee; we’d loss an eye, two legs and our right arm. We were losing so much money, I was literally wondering if we could rebuild, let alone be better than we were.

Month six was crunch month. Overnight, my wife and I realised we had to make changes – drastic changes. My accountant still laughs when she recalls me telling her that I was moving to Wellington. We’d decided this was our only course of action on the Wednesday and Thursday, when she arrived I told her of the decision.

“Ok, so we’ll need to get a few things done. Are you planning to move there in a couple of months?” My reply was, “Ah Julie, I don’t think you quite understand. I’m going this weekend”.

Things were that drastic, the company was failing … I was failing. I couldn’t even afford the airfares to and from Wellington so I was driving there one weekend and driving home the next.

I had to cut costs to the bare minimum and, unfortunately, that meant making the Wellington manager and our delivery guy redundant and doing it myself. My dream of having staff that never leave was shattered.

I also made a rushed decision and promoted one of my Auckland guys (who wasn’t ready to take the job on) to be branch manager there.

So, there I was in Wellington doing everything myself. For the first week or so, I ran around in circles thinking the sky was falling. I was going broke fast and blaming everyone else for it.

It didn’t take long before the Auckland branch was slipping backwards and we were starting to make losses there as well. I was hoping and praying that something would change or that someone would magically come along and fix all my problems.

The cold, hard reality started to dawn on me … I had to change. My initial goal had been to build something up from nothing that was a market leader in its field but my actions were leading me in the opposite direction. After lying in bed panicking for hours, I got up and made the decision to change what I was doing.

Failure in Wellington wasn’t an option. The first thing to fix was Auckland so we could at least survive. I put together an action plan for my Auckland manager to follow, which I knew would turn things around. He didn’t follow it so he left. His replacement did follow it and things started to improve. I also set about finding someone who could replace me in Wellington. Among hiring someone to do all the deliveries, going out and bringing in as many new customers as possible and keeping a close watch on the Auckland branch, there were several candidates to take over the management of the Wellington branch. I couldn’t afford to make any mistakes so I was fussy and held off until I found someone I knew could do the job. That person eventually came along and, 24 months after shifting to Wellington, the branch was now contributing to the company instead of bleeding money, and I moved back to Auckland.

At the end of the day, I learnt a few important lessons for turning a failing business around:

– Get yourself right. Concentrate on your main goal. If you are not moving towards it, the only reason is the actions you are taking. I heard a definition of insanity that I always keep in mind: Insanity is doing the same thing day after day and expecting a different result. If you want a different result, change the way you are doing things

– You can’t do everything, delegate to competent people. Don’t focus so much on how they get the job done (so long as it is done morally, legally and timely), concentrate on the result you want and monitor it. Tie your people’s bonuses into that result; make them your key performance indicators (KPIs). Go as far as letting them know what the desired result is and then let them tell you how they’re going to achieve it. They may not choose the same path you would, however, more than anything, you want the result don’t you?

– No-one likes change. The challenge is that change is the only constant in life. Things are always changing. Take calculated risks but never be afraid to change. Change is growth.

One last thing I’d like to leave you with: Brian Dyson is a former vice president of Coca Cola. In 1996, at the Georgia Tech commencement address, this was part of his speech and it is so true: ‘Imagine life as a game in which you are juggling five balls in the air. You name them work, family, health, friends and spirit. You will soon understand that work is a rubber ball. If you drop it, it will bounce back. However, the other four balls – family, health, friends and spirit – are made of glass. If you drop any of these they will be irrevocably scuffed, marked, nicked, damaged or even shattered. They will never be the same. You must understand that and strive for balance in your life’.

Through my experience opening that branch in Wellington, I can say with absolute certainty that, yes, work is a rubber ball and it does bounce back however you’re the one in control and only you can bounce it.

Vaughan Tombs
www.vtsalestraining.com