Mind Your Own Business... or Not?

Everyone who is dependent in any way on the health of a company is called a stakeholder. A stakeholder can be an employee, a subcontractor, or even a vendor. There are various levels of dependency.

An employee is dependent on the company for a paycheck. If their employment ends and they can replace that paycheck somewhere else, the dependency is fairly low. If a subcontractor has their entire business built on the relationship (contractual or otherwise) with the company, it cannot be replaced somewhere else and therefore the dependency is high.

Too often I hear accounts of high dependency stakeholders who cannot be bothered with understanding the higher-level decisions the company, upon which they are highly dependent, is making. They say things like, “That doesn’t affect me” or “I’m too busy to worry about that” or “There’s nothing I can do about it anyway”, etc.

If you’re a highly dependent stakeholder and you find yourself saying, or even thinking these things, THIS article might be of significant value to you!

This episode focuses in on why it is wise to take the time for high dependency stakeholders to educate themselves on the decisions their company is making because it affects them in more ways than they think.

Eyes on the Horizon

Starting with the most obvious point: say you are responsible for your own subcontracting company; you are the CEO (Chief Executive Officer). As such, you are responsible for everything!

The function of a CEO is to have “eyes on the horizon” and have a sense for what is coming. To conduct oneself in a way that ignores the horizon is like riding a motorcycle and not caring about what traffic might be doing in front of you. “No, I’m just going to make sure I can maneuver my bike well and make sure it is in top mechanical condition. There’s nothing I can do about the road ahead of me.” We all might agree that approach would be foolish.

When I was in college my roommate was a bicyclist. He would do 100+ mile rides in a day. One day he was out riding on a two lane highway, head down, focused on the white line on the side of the road. Just pedaling and making good time. Never even considering that there might be a truck parked on the side of the road. With full force he went head first into the stopped vehicle. He didn’t keep his eyes on the horizon and paid the price.

Is a Bread Truck Coming?

There could be any type or manner of changes on the horizon that have the potential to materially affect one’s business. First, the effective CEO would need to estimate how material this potential is, and base a response on that.

I learned from a group of consultants years ago when we hired them to do a “deep dive” (refer to related article, “What is a Deep Dive?”) for our company. One of their first steps was to assess the size, or materiality, of the issue. The saying was, “We need to find out if it is bigger than a bread box/smaller than a bread truck”.

It Was Allowed, Now It Isn’t

Regulatory changes affect how you conduct business, and regulatory changes can result in instant obsolescence or immediate explosion of a business.

Maybe you used mail order back in the day. What did short-sighted CEOs do when that was regulated out? Some people stapled signs to anything and everything in order to build awareness of their company. What did they do when that was no longer allowed? How well did it work when those CEOs had no idea what else to do in order to grow awareness of their business?

Less impactful business changes might be on the horizon that the CEO would be well served to heed by simply focusing on developing certain components of their business.

Maybe your business supplies safety training for companies and you have developed a DVD library you are selling. Then you learn of a massive online resource that will be available soon that is much higher quality, more comprehensive and less expensive than yours. At that point it might be wise to shift your focus to live, in-person trainings or other innovative options.

The company you are dependent on might be sold, leaving the fate of your business in a gray area until the new owner informs you on how they will run things. Or the company you are dependent upon might acquire another company, again leaving you with many unknowns until it is announced to you what will be done with it. Acquisitions and divestitures are always a part of business and CEOs of high dependency businesses must be as informed as possible in order to make appropriate adjustments.

Who's Running This Ship and Where Are They Taking ME?

It is wise for a high dependency stakeholder (CEO) to be informed on how the company they are dependent upon is being run. This is especially easy when the company is publicly traded. There is an abundance of relevant and informative information on public companies. Annual reports, quarterly earnings statements and conference calls, and other quarterly and annual filings.

There are also business analyst articles galore that provide an objective (huge point) perspective on a public company. Maybe you are fortunate enough to have a trade association or some other group committed to the welfare of subcontractors like you. A CEO of a high dependency subcontractor who does not stay informed on how their company is being run has relegated themselves to living in a reactive world.

Some examples might be a company has announced an entirely new direction they are taking in terms of their branding and how they market themselves to investors. This new direction might require major investment. Major investment always comes with risk.

Questions to consider are: What is the objective of this new direction? Is it consistent with the mission and purpose of the company? What is the risk involved (bread box/bread truck)? What can you as a subcontractor/stakeholder do, not only to prepare for these changes, but to make the best of them when they arise? To ignore them is simply foolish.

Here are a couple of real-world business examples:

Peleton (stationary bikes & home workouts) had a breakout year in 2020 due to the lockdown. Gyms/fitness centers were closed so people turned to in home workouts. Apparently the senior management at Peleton thought these high times would continue indefinitely so they added lots of overhead expenses and made big investments in expanding their service offerings. Well, who could have possibly foreseen that gyms would eventually re-open? Only everyone!

The result was a decline in sales, bloated overhead expenses, and calamitous times for the company. How does this affect employees and high dependency stakeholders? Massive layoffs, overall downsizing, management restructuring. Could high dependency stakeholders have read the reports, listened to the experts and made preparations for the inevitability that the senior management team was so blind to? Of course.

Here is another example:

A network marketing company, Advocare, terminates 100,000 distributors. These are high dependency stakeholders. One day they are the CEO of their own business, working on strengthening and developing a business that, in some cases, took many years to nurture and grow, and the next day they have no business at all. None. Gone.

What could these distributors have done BEFORE this tragic end took place? Could they have informed themselves as to what was happening in their industry? Maybe read the business articles on how their company was doing business? Maybe even get involved in a trade association or other group committed to the health and welfare of distributors? Of course.

To adopt the “I’m too busy to care about that stuff” attitude is irresponsible, short-sighted, lazy…and foolish. It is the epitome of the saying, “I’m too busy driving to get gas”.

Relegating oneself to living in a reactive world is like the children’s toy that just runs across the floor until it bumps into something, then changes directions slightly and keeps moving forward until it bumps into something else. All reaction. Destined for continual adjustment to unintended consequences.

Finally, a major contributor to the demise of any company a high dependency stakeholder is involved with is the “I’ll get mine while the gettin’ is good” attitude. This short-sighted and selfish behavior only exacerbates the demise of the company so many others are dependent upon by making the driving forces of poor performance even greater, thereby accelerating the demise. It is never enough, and the nature of it is absent integrity. And without integrity, nothing works.

It Isn’t too Hard, You DO have Time, You CAN Do Something About It

Finally, never confuse activity with productivity. This is sometimes hard to accept, but over-activity is another form of laziness. When someone is constantly “working”, then the first excuse out of their mouths is how they are constantly working and don’t have any time for anything else. How is that not a convenient excuse? Said another way, “I don’t have to think critically about my business or learn any new skills, or problem solve, or strategize…because I’m too busy”.

Rest periods are a universally accepted requirement in any peak performance program.

Vacations and rest periods provide the time necessary to see things more clearly, make adjustments, if necessary, re-set business priorities, gain different perspectives (reading books), and re-charging oneself. This idea of “grinding” and the glorification of constant work is simply unproductive and, in a way, lazy.

With this in mind, getting informed on these things is simple. As stated earlier, there is an abundance of information available. As is the case with any endeavor, it is a matter of placing value on it.

Incredibly complex problems are solved when people value the solution. Time magically appears in abundance when an activity of value is available. Something can always be done about situations/problems/crisis when value is placed on the desired result.

As Margaret Meade famously said, “Never underestimate the power of a few committed people to bring about really big change. Indeed, it is the only thing that ever has”.

I hope this has delivered on the promise to demonstrate why it is wise to educate oneself on the decisions the companies they are dependent upon are making and how they can affect, adjust, and prepare for them. High dependency stakeholders who describe themselves as having a "head down, butt up" work ethic might end up going head first into a parked truck.