Everything I Learned Not to Do in Business, I Learned from Business
Michael is Principal of The Vann Group, a professional advisory firm that assists companies in transition to unlock their value. Michael regularly writes about the highs and lows of business in his blog, “The Vann Report.” He can be reached at [email protected].
I was recruited out of my corporate consulting gig to become the number two in a small, but rapidly growing, service business. From all appearances, the owner—let’s name him “Bill”—was a successful entrepreneur. He had multiple houses, luxurious cars and a business that practically minted money. He was also a lifelong friend of the family and had a board comprised of influential people, which happened to include my father.
What began as an opportunity of a lifetime quickly became something altogether different. Bill had the tendency to ignore the people around him. He would undermine his team every chance he could, as well as berate and manipulate his staff to the point that some would get ill and others would cry. Worst of all, he would flaunt his wealth by driving his Porsche to work while he paid his employees not much above minimum wage.
Bill’s business was a cash business, and it was successful because he convinced his customers that his collection system prevented theft. It did no such thing; it just protected him. The first time I became aware of this gross dilemma was when a large customer became concerned about their collections and announced they were sending in an audit team to look around. The staff was directed to recreate collection reports that would tie into the customer reports. When the staff expressed their concerns to me, I told them not to do anything they were uncomfortable with. Bill chastised me for not being loyal; a flaw that, he said, made the staff lose respect for me.
Against my better judgment, I stayed with the company.
During the next few months, our relationship drastically deteriorated. One day, while I was reconciling collection reports with deposits, I found a glaring variance between two reports. I did some digging and discovered the reason. Instead of keeping my mouth shut, I left the company and became a whistleblower. I went to the board and detailed my allegations, and they promptly confronted him.
When he wouldn’t disprove what I said, the board was subsequently disbanded. After several years of what appeared to be misguided investments and bad business decisions, Bill had to sell the company. Publicly, he was able to make it appear like he had made tens of millions; however, court records from the resulting lawsuit painted a different picture.
With nowhere to go after leaving the company, I decided to start my own business. I did so largely because I never wanted to be involved in a situation where business wasn’t done the right way. Bill seemed to create a wake of misery with his every action, and I vowed to never be like that. Now, every time I have a difficult business decision to make, I pause and ask myself: What would Bill do? And then I always do the opposite. At the time, I didn’t think about how much influence the impact of this experience had on me. Now, looking back, I realize that it has been a major influence in how I run my business and life.
Nine years later, I’m successful because of the nine months I spent learning what
not to do in business from Bill. I learned that it is far more important to be ethical in business than it is to be wildly successful or rich. You are only as good as your word. I know that if I continue to follow my moral compass, I will position myself and my company toward continued greatness.