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Published:April 7th, 2008 07:10 EST
Don't Let Your Ego Take You Down the Drain

Don't Let Your Ego Take You Down the Drain

By Joel G. Block (Mentor/Columnist)

 

Ego Can Take You Down the Bunny Hole.

I recently had breakfast with one of my lender friends and he told me the most disturbing news. Several months ago, he called me privately and told me that a deal he`d gotten involved with had gone south. His company had partnered with Merrill Lynch on a deal for a company that was well known and well respected in their industry.

Like all lenders do, both companies took the appropriate measures to protect their assets. They structured the deal so that in the even of a collapse or a disaster they would be protected. The reason that this company went with a lender instead of a bank was because they didn`t have the credit worthiness to get their money on the very favorable terms that would be offered by a bank.

It wasn`t very long before this relationship started going south. The company started making promises that it could not keep. It started taking actions that were inappropriate in the eyes of the lenders. And dramatic action had to be taken by them.

I was brought in by the lenders to help negotiate a potential arrangement whereby the company could keep operating, make payments to their lenders, and straighten out their business situation. This business service is called a "turn around." I met with the CEO of the company that was going into this distressed situation and immediately felt that he was in denial of the severity of his situation. Also, he was a manipulative personality who tried to change language and change circumstances to meet his needs. I was very quick to point out that he was in no position to play games and the lenders had paid for me to come in to see what kind of assistance I could provide. The lenders would follow my lead and either give him more time or tighten the noose based on the outcome of our relationship.

I went back to the lenders and told them that I thought we should give him a little bit of rope and that we should control the way that new money was leaked out to him so that controls could be put in place that would enable him to operate, but that would be satisfactory to the secured lenders. The secured lenders put together a very friendly document that was not filled with lawyer jargon, and when it was presented to him, exactly the way we had agreed it would be organized, he pushed back and refused to sign. He wanted better terms, he wanted more money and he wanted more and more and more.

The lenders, being concerned about some of his demands, did soften up a little bit more against my suggestion and offered him even better terms. They finally got him to sign the document and offered a little more relief to his company in exchange for better compliance from him. Unfortunately, the better compliance never came and this morning, when I met with my lender friend for breakfast, I found out that the company had been thrown into a chapter seven bankruptcy. That means that the gentleman who had owned one of the premier companies in his industry, world famous, had been dissolved. The man lost his house, he lost the rights to all of the future money that would be made by this company, and I can`t imagine the toll that it took on his family.

The lesson that I take away from this is that sometimes you have to put your ego aside. Sometimes you have to allow people to help you. Sometimes you have to stop being cynical because the lenders really didn`t want to put him out of business. The lenders knew that by putting him out of business, they would receive only pennies on the dollar. They were motivated to give him more capital and help him in any way they could. That generally is the way it works in business. The lenders don`t have much incentive to shut you down. Instead, unbelievably, they want you to succeed so they can continue to make interest on the money they`ve put into the market place.

So, as you are working hard every day to build your company, or as you`re building your career, think carefully about when your ego is getting in your way. And if you find that it is, work hard to regroup so you can take advantage of resources and opportunities that are put in front of you " especially the ones that might help you to move your business forward at the pace you want it to move.

About Joel G. Block, President of Growth-Logic, Inc.
Often dubbed a "Growth Architect" by his clients, Joel Block advises companies on explosive growth strategies by driving revenue and sales. Well known in the capital markets, Joel is a successful entrepreneur, speaker and advisor. To bring Joel into your company, please visit www.joelblock.com or www.growth-logic.com.