The 5 Unwritten Rules That Will Kill Your Business

Every business follows these rules that "go without saying." But could they lead to disaster?
Author, Profit First
August 14, 2012

It goes without saying that as business leaders we enforce rules that “go without saying.” You know what I'm talking about—those unwritten rules like “The customer is always right” and “Hire only A players.” These apparently obvious business success rules aren’t necessarily written in corporate guidelines or HR manuals, but they obviously work. Or at least that's what we thought.

There are five common unwritten rules that almost every business follows with the best of intentions. The outcomes, though, might be disastrous:

1. The customer is always right. This unwritten rule has taken many a business down the path of a costly, time-eating, “make it right” nightmare. The rule dictates that every customer who makes a demand, regardless of who is making it and how unreasonable it is, gets what they want.

Often the biggest most unreasonable demands are made by the most unfit customers. Ultimately, you cannot adequately service a customer who isn’t a match for your business, and you shouldn’t try. In fact, the most successful companies focus on servicing only a specific type of clients and actively filter out those customers who are not a fit—even referring them to alternative vendors.

Add a new written rule to your corporate guidelines that states “the right customer is always right.”

2. Put new hires on automatic probation. You hire that new employee and welcome them on board—with an automatic 90-day probation. The concept of this unwritten rule is that new employees need to prove to the company that hiring them was not a mistake.

Talk about starting off on the wrong foot! The first experience that new employee has with your business is a veiled form of punishment. Top that with a first day of filling out paperwork, ordering their own business cards and eating lunch alone.

Never forget that the first impression is the most important. A new employee should be welcomed with celebration and encouraged with “show us what you can do,” instead of “prove to me I didn’t make a mistake hiring you.”

3. Promote top performers to managers. Your top sales rep is crushing it, outperforming all the other sales reps combined. So you follow the unwritten rule of promoting her into a management position. She fails miserably in the new role. She loses and your company loses.

Just because people are great in one role does not mean they will be great in another, more senior one. In fact, most individuals have super strengths in one area alone. When an employee shows extreme talent in an area, it should be cultivated and used accordingly.

4. It’s all about the bottom line. Too many entrepreneurs measure their prior year’s success based on the financial statements prepared by their accountant. Was the bottom line a profit or a loss? Is my business a success or failure?

While the bottom line represents the critical lifeblood of the company, it does not alone define success. Businesses success is in fact determined on a much bigger level. What kind of impact did the business have on its customers and community? How many employees are being supported by the business? What innovations did the company bring about?

Create a new rule of measuring success through overall impact, not just the money you made.

5. Hire experienced “A” players. I will never forget my business partner running down the hallway waving a resume and gleefully shouting “We got him! We got him!” My partner had found an applicant with the perfect background and experience for our company. After I looked at the resume and conducted the interview, I too knew we had found an “A player.”

That was until he started working. Shockingly you can’t find values, attitude and energy in a resume (or even in an interview, in our case). It quickly became apparent that our new employee had to go.

Experience is a tricky way to gauge a future employee. After all, experience is the only thing you can give to an employee. They come hard-coded with their attitude, outlook and intelligence. Start recruiting your employees on the intangibles, and teach them the experience part.

Mike Michalowicz is the author of The Pumpkin Plan and The Toilet Paper Entrepreneur. He is a nationally recognized speaker on entrepreneurial topics and is the CEO of Provendus Group, a consultancy that helps companies whose growth has plateaued to move forward again.

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