Small Business

When Failure Is Not an Option


When entrepreneurial commitment increases, so do creativity, insight, and drive. And going public with your goals can provide just the incentive you need to succeed

In a ham-and-egg breakfast, the chicken makes a contribution but the pig is committed, the old saw goes. Have you ever noticed that when failure is not an option for leaders—when they are really committed—they usually seem to figure out a way to succeed?

Like many entrepreneurs, Jim McCann, founder of 1-800-Flowers.com (FLWS), didn't make much money when he bought his first shop, a flower store he opened in 1976. McCain was a social worker at the time seeking to supplement his income. But he discovered he had a knack for business, and one shop became several.

Ten years later, when he learned about a company for sale that owned the rights to a name he believed had lots of potential, 1-800-Flowers, he quickly arranged to purchase the business, thinking he was ready for the big time. That perception changed when he discovered what bad shape the business was in, including some $7 million of debt he hadn't known about. "We had great motivation to make this idea work," he said of the time, "because if we didn't, we had just lost everything we had built over 10 years."

McCann was about to discover the power of commitment in determining success. On his first day as owner of 1-800-Flowers, the call center took a total of 15 calls. That's 15 total calls, not orders. Faced with bankruptcy if he didn't figure out a way to make the business work, McCann was in a situation where he had to be completely committed—he was the ham on the breakfast plate.

When I am working with managers of a client company who are having a difficult time getting the results they want, I often try to find a way to get them to put some more skin (or ham) in the game. I know that as their commitment increases, so will their creativity, insight, and drive.

Bonuses&Strong Incentives

For example, a few weeks ago I was sitting in a room with 35 managers of a company that has spent the last year trying to improve its customer satisfaction ratings. But it seemed no matter what they tried, the numbers just wouldn't budge. Then I remembered that this same company had previously struggled mightily to build a commitment to business process improvement (BPI)—but it was not until the bonuses of key managers were tied to the successful implementation of BPI that the company really got traction. "Why not time 2008 bonuses to a jump in customer satisfaction?" I asked. Dead silence. "Great, then it's settled," I continued.

Then the fun began as people scrambled to give me reasons why it wasn't a good idea: "Customer satisfaction is already 'baked into' our current bonus structure," argued one executive. "If we don't have good customer service," he continued, "our revenues and profits will suffer."

"Well, if that's true," I responded, "you should have no problem changing the bonus criteria for one year to tie directly to customer satisfaction." Frown. We went back and forth like this for nearly an hour—people trying to figure out reasons not to tie their pay to customer satisfaction.

There may be many good reasons why the company should not tie its bonuses this year to its customer satisfaction ratings, but I am confident of one thing—if they did link pay to customer satisfaction, their numbers would jump. I know the group well, and when they are committed, they make it happen. The challenge is getting them to view a situation as one where their backs are against the wall; if it is, time after time, this team prevails.

Tooting Your Own Horn

Another client of mine is in the industrial cable industry, and has tripled its sales in the past four years by offering shorter lead times and timely delivery for its customers. But that success has brought its own set of challenges. It has been difficult for capacity to keep up with revenue growth, and when we were together for a management retreat a couple months ago, it became clear that lead times were stretching out and the timeliness of deliveries falling.

There were many in the room who argued that given the company's growth rate, it was no longer possible to deliver product in six to eight weeks (roughly twice as fast as others in the industry). But the CEO wasn't having it. He charged the team to figure out how to sustain and even improve the company's lead time and delivery performance in the face of rapid growth. And just for good measure, he began posting the company's lead times and delivery statistics on its Web site. Now he and his folks are committed.

Five years ago I began writing a book, The Breakthrough Company: How Everyday Companies Become Extraordinary Performers, which was released this month. Over that time period, whenever I would talk about the book—in speeches to more than 100 groups, in my work with nearly 2,000 executives from more than 100 clients—I always mentioned that I wanted it to be a best seller. Perhaps some saw this as being overconfident or showy, but what I was doing was committing myself.

I was going public with my desire to write a really important book—the same way my client was committing himself by posting his on-time delivery statistics on his Web site (98.4% when I last checked). Will my book be a best seller? I won't know for a couple of months. But I do know this: If I hadn't committed myself fully and gone public with my intention, I would have never had a prayer. The same thinking holds true for entrepreneurs setting goals within their own companies.

Keith McFarland, a two-time technology CEO, is the founder of McFarland Strategy Partners. He is author of the #1 Wall Street Journal and New York Times bestseller, The Breakthrough Company: How Everyday Companies Become Extraordinary Performers. He writes his leadership column every month.

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