If you’ve owned a business for any period of time, you have lost objectivity in your business. Yes, I just said that. In fact, I boldly placed that sentence at the beginning of this article. I could have asked, “Have you lost objectivity in your business?”. Sure, I could have. But I know better. Truth be told, I’m not aware of any business owners who haven’t lost objectivity about their business, especially about how valuable their businesses are. Therefore, I declare that you’ve lost objectivity in your business and about your business. In fact, I, too, have lost objectivity.
According to Merriam-Webster’s online dictionary, objectivity is defined as “relating to or existing as an object without consideration of independent existence.” Now that’s Webster’s definition. My Financially Simple mind puts objectivity this way. It is the lack of bias, judgement, or prejudice about a particular matter. If you lose objectivity, you lose the ability to judge things around you properly, or you have a bias in a situation.
In reality, business owners have an incredibly difficult time looking at their companies objectively. It’s virtually impossible. In the book When to Hire or Not Hire Consulting: Getting Your Money’s Worth from Consulting Relationships, Linda Orr addresses business owners’ lack of objectivity. She writes, “Leaders may lose objectivity when being too heavily immersed in day-to-day operation and lose sight of the big picture. They focus on the forest and ignore the trees.” She goes on to explain how processes and control matrices can help buffer the business owners’ lack of objectivity, and I agree with her on many of those things.
However, I think business owners often lose sight of the forest. We’re focused on the trees. Sometimes, if you’re like me, you’re not only focused on the tree, you’re focused on the tree bark, or the leaf, or the ant walking up the tree. Forget the tree itself. See, you’re so invested in your company that it often feels like another child or a spouse. You get so wrapped up in the day-to-day that you lose objectivity about the possibilities of your company.
“Your company was once a startup…However, as you’ve gotten busy with your business, you’ve lost the focus to increase the value of your company.” – Justin Goodbread, CFP®, CEPA®, CVGA®Click to tweet
Your company was once a startup. You were struggling just to make enough money to cover your bare-bone expenses, and you worked your fingers to the bone. Yet, as you’ve gotten busy with your business, you’ve lost the focus to increase the value of your company. Perhaps, you don’t know how. Maybe you’ve never even thought about what the value of your company is. Perhaps you desire growth, but you don’t know how to describe what growth looks like.
Before you can focus on increasing the value of your small business, you must understand that you’ve probably lost objectivity about your company. Like my writer, you’ve looked at the same details over and over again and can’t see your mistakes. But, if you never identify or correct the mistakes you’re making in your business, you could harm the value of your company.
So why is this a big deal? Why does it matter if you’re biased toward your business and think it’s amazing (even if it isn’t)? Does it matter that you’ve stagnated or that you aren’t competing with your industry peers?
In fact, losing your objectivity does matter. Bad things happen in your business. I’ll give you some examples.
When you lose objectivity in your business, you:
I recently read an article called Strategic Issues in Entrepreneurial Venture where an author addresses business owners’ loss of objectivity. Aneefar Yasmin states, “The founder’s attitude, ability to be objective, willingness to bring in needed help, and share power are all crucial to success. The mistake of falling in love with their product or service is the weakness. Ultimately, it’s a lack of self-criticism that causes many companies, startups, and their mature counterparts to fail.”
So, be mindful of your defences. I don’t want to attack the way you do business or attack your business. However, I want you to look at your business objectively, as an investor, banker, or consultant would. If you want to increase the value of your company, you must first remove your subjectivity. As Catherine Booth, co-founder of the Salvation Army once said, “If we are to better the future, we must disturb the present.” In order to increase the value of your business in the future, you must make changes today. And honestly, the biggest hurdle you must jump may be your owner’s bias. You view your company as more valuable than it is. Thus, in order to better your future, you must disturb your present.