Think About How to Ruin Your Business—Then Do the Opposite

“How to Succeed in Business Without Really Trying” is a classic Broadway show about an opportunistic guy who makes it to the top with little effort. Putting a new twist on the title, entrepreneur and author M.J. Gottlieb points out that it’s also easier than one might think to tank your business in his book, How to Ruin a Business Without Really Trying.

After learning from a series of mistakes, he theorized that figuring out what not to do gives business leaders the best chance of succeeding.

Inverted Thinking

While every CEO makes errors, Charlie Munger believed leaders don’t have to live through pitfalls to learn from them. Instead, the former Vice Chairman of Berkshire Hathaway and business partner of Warren Buffet relied on a process called “inverted thinking,” a concept he picked up from Albert Einstein.

People with an inverted thinking mindset look at situations from the opposite perspective. Instead of considering what it would take to succeed, they envision how specific approaches and decisions could lead to poor outcomes and devise alternative solutions.

What Could Go Wrong?

According to the U.S. Bureau of Labor Statistics, approximately 20 percent of small businesses fail within the first year, and the numbers worsen as time goes on. By the end of the second year, 30 percent will close their doors, only half will survive five years, and just 30 percent stand to make it an entire decade.

Reasons for the failures abound and include unpreventable external factors. However, businesses often don’t make it because their leaders don’t anticipate, acknowledge, and prevent internal problems.

Author, speaker, and Red Team Thinking president Bryce Hoffman outlines self-defeating practices and behaviors in a recent Forbes article based on his coaching tool, “The Enemy Within.” Although outside threats can be formidable, he notes that they pale in comparison to self-inflicted wounds, including:

• Groupthink and lack of critical thinking
• Resistance to change and failure to adapt and innovate
• Poor leadership and management
• Ineffective communication

Groupthink and Lack of Critical Thinking

According to Hoffman, groupthink occurs when “a desire for harmony or conformity within a group leads to irrational or dysfunctional decision-making.” He cites NASA’s Challenger space shuttle catastrophe, which occurred when the organization decided to launch despite some engineers’ concerns.

Embracing an inverted thinking perspective would have elevated the relevance of red-flagging issues. NASA’s leadership might have averted the ensuing tragedy if they had encouraged critical thinking instead of suppressing it.

Resistance to Change and Failure to Adapt and Innovate

Many things cause leaders and their staff to balk at change, including not wanting to leave their comfort zone, fear of the unknown, and protectiveness of “the way we’ve always done things.” The marketplace is rife with shuttered businesses that dug in their heels and didn’t embrace the possibilities that innovative adaptation can bring.

Large companies like Kodak, Blockbuster, BlackBerry, Borders Books, and Myspace made the headlines, but thousands of smaller businesses succumbed to changing times because their leaders were complacent. They didn’t scan the horizon to identify factors that could lead to their organization’s slide or encourage their people to think beyond the status quo.

Poor Leadership and Management

Looking in the mirror and assessing their performance is one of the hardest things for some leaders to do. Too often, people in charge refuse to acknowledge or don’t see their blind spots and biases. However, self-awareness about their strengths and weaknesses can be a critical asset for CEOs.

Those willing to perform an honest, proactive critique gain an opportunity to prevent derailments by implementing corrective measures, working on self-improvement, and enlisting the right staff. In doing so, they set an example for their management tiers. As the leader goes, so does the company; the quality of leadership is directly related to a company’s success or failure.

Ineffective Communication

Communication is the lifeblood of an organization. It can either invigorate team members and accelerate progress or cause the company’s demise because it’s sluggish or blocked. The costs of poor communication include lost revenue, customers, staff, and time.

To work effectively, leaders must identify the signs of poor communication, such as a lack of transparency and sharing, unclear expectations, and vague or obscure language. They should then thoughtfully craft and systematically reinforce channels that prevent such communication vacuums.

Hoffman anchors his list with “Neglecting Organizational Culture.” Most leaders know that workplace culture is important, but many don’t think proactively about cultivating an environment conducive to personal and organizational success. Instead, they let their company culture happen organically by highlighting core values and assuming people comply with them.

However, like the impact of a leader’s influence, the quality of a company’s culture can make or break the organization. It is far too vital to leave it to chance because it influences every aspect of a business.

Author and CEO coach Eric Partaker posted a list of the top five company culture killers on X that underscores the importance of inverted thinking when it comes to how to approach culture. Leaders should imagine the negative outcomes of these behaviors and then ensure they don’t occur.

1. Tolerating toxic behavior.
   Unfortunately, the worst behavior a leader is willing to tolerate sets the bar for their organization’s culture. Often, leaders let an employee’s poor attitude slide because confronting them might rock the boat—especially if they are a top performer. This signals to everyone that toxic behavior is acceptable, often causing a ripple effect.
   
   
2. Promoting self-serving leaders.
   People in supervisory roles who prioritize their own agendas or have oversized egos can undermine organizational goals. Putting their concerns, ambitions, and accomplishments above those of their direct reports demoralizes staff and stifles productivity. Leaders often promote people with these negative characteristics because they are top performers or have a high level of expertise.
   
   
3. Neglecting work-life balance.
   The pandemic created a seismic shift in people’s priorities and how they view their jobs. Leaders who reflect and expect an “always on” approach to work will initiate high levels of burnout and disengagement. These conditions are prevalent in today’s workplace and cause productivity slumps and turnover.
   
   
4. Punishing mistakes harshly.
   Leaders quick to call out mistakes and cast blame create an atmosphere where people constantly look over their shoulders and don’t take creative chances. Pointing fingers also delays solutions and makes people fearful and more likely to cover their mistakes than learn from them.
   
   
5. Ignoring employee feedback.
   Leaders lose insight and harm their company by not listening to their staff or failing to build a psychologically safe environment where employees feel secure speaking up, asking questions, and making suggestions.
   

In his book Culture by Design, CultureWise CEO David J. Friedman advocates for leaders to take a hands-on approach to developing their culture. One step of his process outlines a simple process for pinpointing behaviors that can undermine their business. He suggests that leaders reflect on what they don’t want to see in their organizations, asking themselves:

• What are the things that you often rant about?
• What are the things that drive you crazy when you see them happening?

He then tells leaders to reverse their passion regarding these undesirable behaviors by envisioning their opposites. By viewing workplace behaviors through an inverted thinking lens, they can craft a dynamic culture that will drive the company’s success.

No CEO sets out to destroy their business, but letting it decline inadvertently is easier than many may want to admit. As leaders strategize and plan long- and short-term goals and objectives, they can avoid pitfalls leading to failure by thinking about poor outcomes and visualizing what would prevent them.