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When Your Business Is Most Vulnerable (Hint: It's Not During Hard Times)

A learned helplessness takes over during hard times. It's when you're in recovery that you should nurture creativity and risk-taking.
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Business can be tough. Sometimes for prolonged periods of time.

A down economy, sluggish growth, crippling regulation can all hold business growth back for months, quarters, even years (maybe you've noticed)--and that's before factoring in rapid technological change, a gridlocked political environment, and what's that other thing...? Oh yes, brutal competition.

Prolonged political and economic stagnation means that for many businesses, hiring has been low or nonexistent. I've seen businesses operate under tough conditions for seven, eight years with substantially the same people who worked for them back when things were good.

So, over the past few months, as some industries begin to get some traction, albeit meager and inconsistent, it's been interesting to observe the degree to which businesses exhibit different RROs (response rates to opportunity).

OK, so I made that abbreviation up, but it's shorthand for something very real, which is this: As recovery grows, albeit haltingly, and your market begins to return, where will it leave your business?

The Advantages of Younger Companies

The interesting thing I've noticed in these early days of recovery is that younger businesses, particularly those that only started in recent years, are responding faster and with more creativity and innovation than those which have been around for some time--even when those older businesses are market leaders.

You might think that's natural--that it's about smaller, more nimble businesses being disruptive and stealing a march on larger, more unwieldy competitors, and in part, that's true. But there is also something deeper going on.

What I see in many of those businesses that have been under the economic cudgel for some years is that there has grown up a sense of learned helplessness. In these companies, many of their best people are lethargic, unwilling to experiment, and wary of taking even controlled risks.

Let me be clear, this is not necessarily about talent or ability. It's about conditioning--about being told over and over (albeit for good reason) that there's no budget, no market, no demand, no additional resources, no new hires, no place for innovation; it's about a prolonged (and again, needed) emphasis on productivity above all else; it's about working for a long time in a barren, parched landscape--one that can give little nurture to creativity and risk-taking.

And so, after operating in such an environment for a long time, once the first springs of new water, fresh life appear, what happens? In those companies with a pervading sense of learned helplessness, the answer is, very little. Everyone is wary, dubious, nervous. No one wants to be first to take advantage of the new opportunities that are arriving, small and fragile as they are. Everyone waits, a little dully, for permission. And every day, they lose market share to other, less reticent competitors.

Maybe you've done a sterling job in recent years of battening down the hatches to survive a truly dreadful economic storm. You've secured employment for a base level of good people and have ruthlessly managed the business to protect those jobs and your customer base.

If so, you should be rightfully proud. But take a look around. Maybe it's time to reopen the hatches and let your people come blinking back on to the deck.

Ready to reinvigorate your business? Download a free chapter from the author's WSJ bestseller Predictable Success: Getting Your Organization on the Growth Track--and Keeping It There to learn more about building a world-class culture that will rapidly accelerate the growth of your business.

IMAGE: Getty Images
Last updated: Feb 13, 2014

LES MCKEOWN | Columnist

Les McKeown is the president and CEO of Predictable Success, a leading adviser on accelerated business growth. He has started more than 40 companies and was the founding partner of an incubation consulting company.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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