Why Businesses Fail

“Businesses don’t fail due to a lack of financial capital, they fail due to a lack of intellectual capital.”

I’ve been saying this for the last couple of years. I came up with this quote out of frustration in watching companies fail for no reason at all other than people.   Too many companies claim the reason they have can’t succeed or can’t grow or can’t whatever is because they don’t have the financial resources due to the bank cutting them off or some other reason.

I’m sorry, but I take major issue with that, because after having worked with hundreds of companies in a consulting capacity, the reason businesses fail is simply a lack of intellectual capital. To put it in even simpler terms — people.   This is especially evident in small companies where the person at the top is also the person who founded the company. I hate to say it but many times this person is the one making all of the decisions only because they’ve effectively shut everyone else out of the decision-making process. They have allowed themselves to be influenced only by those people who will agree with them.

One of the reasons the United States has been an economic powerhouse for more than 100 years is due to the level of intellectual capacity combined with the willingness to take risks that others will not.   This is what sales is all about. This is the role of the salesperson — to provide the customer with intellectual insights and help them mitigate risk.   Think about this for a moment. The underlying reason why people buy anything is to gain a return on investment for their business and/or improve their well-being either personally or professionally. They do this by engaging with those companies, products, or people in whom they have confidence.

In your role as a salesperson, you’re giving them intellectual insight and helping them mitigate risk.  I look at the role of a salesperson as being a leader to their customers. In this capacity, they are essentially providing them the “R&D” they probably can’t afford or are not willing to invest in.   This is why I say companies fail due to a lack of intellectual capital. And it’s  why I strongly believe it is one of our most important roles as a salesperson to help fill this void.    I could go on for hours giving you plenty of other reasons why I firmly believe this quote of mine, but I will let you determine in your own mind how you can use it yourself.

What are you doing to help yourself intellectually grow?

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