Do you know why most businesses ultimately fail? The answer might surprise you. It is not because of a poor product or sloppy marketing. The product and marketing can certainly contribute to success or failure but think deeper.
So, what is the causal factor driving most businesses to failure?
According to a Harvard Business School research study, 70% of businesses are sold off or close before the second generation has a chance to take over! Among those that survive the transition to the second generation, 90% are sold or closed before the third generation!
The top three reasons, according to the Harvard study, include disagreements among top executives, out-of-control emotions (greed, desire for power, etc.), and people not equipped to handle the demands of the business.
However, if you think about it, all three of the stated reasons are symptoms of an underlying problem. That problem causes most businesses being sold off or closed. And that problem is poor leadership!
I saw it all the time in my role as an advisor to a ministry devoted to helping small businesses. The founder usually had a great product or service idea, lots of expertise, and inexhaustible passion. While the business was small, his or her knowledge and passion kept the business going. However, as the business grew, employees were added and then supervisors. That is when the issue of poor leadership begins to take its toll on the business.
In the Bible, there are many stories about leaders who failed in one way or another. But one leader, in particular, failed most spectacularly.
Eli’s Failure
Eli was a powerful man in Israel. He was both a judge and the High Priest. In ancient Israel, that’s like being the king, the pope, and the head of the supreme court all in one!
Everything we read about Eli (1 Samuel 1-2) indicates he took his job seriously and was good at it. The problem was, as the leader, Eli was responsible for a lot of other people, including all the priests who served in the Temple of God.
Two of those priests were his own sons. Sadly, Eli’s sons were evil. They did not care about God, they disrespected offerings people brought, they used their position to enrich themselves, and they even slept with prostitutes right outside the Temple area!
As if the behavior of Eli’s sons wasn’t bad enough, it turns out other priests knew what Eli’s sons were doing, and none stepped in to stop their evil behavior.
Over time, Eli’s unwillingness to deal with his son’s evil behavior corrupted a whole group of priests.
Eli may have been good at his job as judge and priest, but he failed as a leader. He failed to deal with his own evil sons, and worse; he failed to build up a strong priesthood.
God’s judgment on Eli was fierce. However, God did not condemn Eli for his role as a priest, but for his poor leadership of the priests of Israel (2 Samuel 2:27-36)!
Leadership Lesson for Us
Eli’s story teaches us it is not enough to be a good worker or to be good at what we do. Eli was a good judge and priest. He failed as a leader, and that caused a massive failure in the priesthood.
What is critical for us as leaders today is that we must focus on being good leaders. We must train and develop good leaders to follow in our footsteps. Leadership must be our focus.
If you want to build a successful business, you must go beyond knowing how to do the work; you must also know how to lead.
If 70% of the first generation and 90% of third-generation businesses fail because of poor leadership, it stands to reason the one thing we should focus on is leadership.
It doesn’t matter whether we are leading a ministry, a volunteer organization, a small business, or part of a Fortune 500 company, leadership is the single most important factor that determines whether we succeed or fail!
Join the Conversation
As always, questions and comments are welcome. Has a failure of leadership affected you in your career? If so, in what way?
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Category: Personal | Leader Qualifications
