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Ain’t it the truth? The best movie sequel I’ve ever seen is The Godfather II, and it still wasn’t as good as The Godfather. Why is this?
As with many other businesses, it’s about priorities being out of balance. Specifically, in the sequel there is too much focus on making profit and not enough focus on building strong relationships with customers.
In the typical business trajectory, an owner or group of owners start a business and scale it up. They are passionate about the business, and they work very hard to build strong relationships with customers to create repeat business and sustainability.
At some point those folks decide to step away from the business, so they hand over control to another group of leaders. It’s very difficult to find a group of leaders who have the same passion for the business as the founders, so in general I’ll dub this new group “the money guys.”
They are businesspeople who are focused on creating profit and shareholder value. There’s certainly nothing wrong with that, but their lack of passion for the business mission and for building strong customer relationships leads to a hyper focus on internal efficiencies and profit margins.
Over time there are fewer repeat customers, and then profitability begins to suffer. In addition, this insufficient focus on relationships leads to an exodus of the most talented A Players in the business who were attracted initially by the passion of building something unique and exciting.
So, what’s the wise play here? When you exit your business, take care to find folks who share your passion for it. Whether these are private equity buyers or family members, look for leaders who are both competent and caring and who understand the value of strong customer relationships.
All said and done, ultimately business is about relationships, and your sequel doesn’t have to suck.
Don’t be a stranger. (770) 993-1129, tdockery@TheResolveFirm.com
