Many years ago, I was working with a client who had grown rapidly through buying other businesses. In the usual M&A fashion it was all financed through debt. Within 2 years the company had grown to a £42m turnover by using £23m of debt. An empire had been built which was impressive by anyone’s standards.
There was impressive news articles, awards and the CEO was often quoted a as leader in the industry. This was just before the banking crisis and it looked like the best days were ahead. Then, one of the larger clients decided to downsize and cut back. Ouch that was painful, but, with a sales force of over 100 people, we were sure, more work would come in. After all, we were one of the biggest companies in our field. We could compete for the big work that smaller companies could not do.
We often look at people who have built massive business empire’s with a degree of envy. People such as Bill Gates and Rupert Murdock and imagine the high-life, private jets, being waited on hand and foot. It sounds ideal. Unfortunately, that bit is accompanied with the pressure, constantly having to keep the empire functioning and developing.
Just like Captains of ships, Emperor’s go down with their empire. When the Titanic hit the iceberg, the captain was resting. As the ship sunk the Captain had a responsibility to keep the ship afloat for as long as he could. He also went down to the bottom of the Atlantic with it. Emperor’s and Captains are the object of envy but their duties can also be brutal.
The quote “With great power comes great responsibility” is so true.
Coming back to my client, a year into the business empire being built, it took a lot more effort to maintain than it was to build it. With such a big debt to pay back the pressure was on to get the orders, keep the factory busy and get work invoiced quickly. Sometimes we envision we want to build a big business empire we can preside over, but in truth, empire’s need a lot of attention. In the end, the empire was so wieldy and difficult to control, it collapsed, 400 jobs were lost and the emperor disappeared into obscurity.
I too have been guilty of empire building. I wanted freedom, the ability to work when I wanted to, escape the 9-5, but I thought the route was to build a big business – WRONG. I went from a one-man band to a 16 staff operation. I did stop doing the day-to-day work of order processing and being face to face with customers, but inherited a whole new set of tasks, cash-flow management, credit control, work flow management, HR and a million other things.
We can easily deceive ourselves into thinking building big and power mean less responsibility. In reality, the more power, influence the more responsibility you have. So, if you are trying to build a business for an easy life, it’s often easy to keep it smaller, less responsibility, more flexible working times.