2439 - Why Internal Leadership Failures Are the Real Cause of Business Collapse with Mandelberg Consulting's Lawrence Mandelberg

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0:46Visit podverified.com if you'd like to be featured as a future guest. I'm Josh Elledge. Let's get into it. With us right now, it's Larry Mandelberg. Larry, you are the author of the book, Businesses Don't Fail, They Commit Suicide. Larry, you are found on the web at mandelberg.biz, and you are the founder of Mandelberg Consulting. You live in beautiful southwestern France, right? and I think that that has something to do with what you do for fun. First off, Larry, it's great to have you. Thank you. It's a privilege and a pleasure to be here. Hey, Larry, this happened when we were chatting too.

1:31Your microphone, for some reason, for the first second, starts off really quiet like this and then it comes in. I don't know what it's, it's some sort of a setting. It might be. I've got a Samsung. I've got a really nice, expensive Samsung mic. How does it sound right now? It sounds good, but for whatever reason, like I said, this is what it does. So, yeah, thank you, Josh. And so what I'd like to do, that's exactly what it's doing. Like it's really quiet. And then it comes in a second later. Let's try it again. And I don't know if there's, it's, it could be there's, it's a gate. I think it's called a noise gate.

2:12And noise gates, what it does is it comes, it kind of cuts out the really quiet stuff. It's meant to cut out background noise. But sometimes if the timing is like, I forget what the term is, but it just takes a while to come in. Are you using a mixer? No. How does this sound? It's a USB microphone. Well, it's not doing it now. Okay, I just changed the setting. Okay. My system, for some reason, changed the setting from one mic away from my Samsung mic. I just reset it to the Samsung. Okay, okay, okay, okay. We should be good. Okay, here we go. Three, two, one. With us right now, Larry Mandelberg.

2:54Larry, you are the founder of Mandelberg Consulting. You are also the author of the book, Businesses Don't Fail, They Commit Suicide. And you are found on the web at mandelberg.biz. Larry, it is great to have you. It is a privilege and a pleasure, Josh. Thank you for having me. Absolutely. Absolutely. Well, listen, I always love hearing from leaders what they do for fun when they're not at work. And I think that you living in beautiful southwest France has something to do with what you do for fun. You mind to share what you've been geeking out on? Yeah. Well, I've always been a fan of wine. And my wife, 46 years, got me into wine.

3:35I was drinking the cheap stuff. She got me into the good stuff. We live in Bordeaux, France, and I've been drinking French wine for over 40 years, but I've been drinking it from the U.S., from the Napa Valley, in fact, the other wine center of the world. And I love international wine, and I love old wine, and Bordeaux is known for its old wine. I learned, I knew a lot about French wine, but when we moved here, we actually moved here because of a chateau, a Margot chateau. When we moved here, I started to learn more about French wine because you actually, you're living in the middle of it, right?

4:13And for example, I had no idea that it's against the law to irrigate vines in the Bordeaux region. What? Yeah. It's against the law. So that means that you can only rely upon weather? Yeah, it's called dry farming. Yeah. And we're close to the ocean. So interestingly, in the U.S., wine is always driven by the grape first and the winery second. In Bordeaux, and it's common in more international arenas as well, it's always driven first and foremost by the AOC, the region, the terroir. because on the left bank it's all rock and on the right bank it's all sand there's no dirt here all the grapes that are grown in the bordeaux region grow in dirt i mean sand or or limestone or gravel so you have the government dictates what you can put in the wine it dictates the grape It doesn't dictate the blend, but it dictates the priority.

5:21So if you're on the left bank, it has to be the bulk of it has to be Cabernet Sauvignon. If it's right bank, it has to be Merlot. Almost all Bordelais wines are 80 % Cabernet and Merlot or more. Some are 100%. But it's very rigid. It's very limited. and you have to be licensed to say you're a Margot or a Pesach or a Medoc, whatever the region is. So it's all by, first of all, AOC, the region, second of all, the year. The year dictates the heat and the moisture, hot, cool, wet, dry. And then they talk about the chateaus or the grapes. It's a fascinating thing. And it's just such a joy to learn about something I've been enjoying for decades.

6:12I have so many, you know, I think about like the, you know, the, I have so many questions. If we had more time, you know, I'm just thinking like, you know, for growers, that's got to be like, listen, that's what we sign up for. That's what we agreed to. But, you know, you would imagine that that impacts yield. Right. And so they're like, man, you know, I would love to double my output so I could double the amount of bottles I can ship out of here. But they can't do that to just preserve that particular, you know, again, that quality. That is fascinating. Actually, what it really boils down to is the government says, if you want to put Margot on your label, these are the rules.

6:50And it's worse than that because like universities have to get certified on a regular basis for credits. they have to get recertified on a regular basis and prove that they're following the law

7:07well very cool um yeah we could talk about this for days i'm such a wine noob um i you know my the extent of wine that i can appreciate it is a is a sweet florida wine okay i i just can't For the life of me, I just cannot go dry. So here's my 60-second advice for people like you who all say, I want to learn more about wine, but it's so complicated. It's not. It's like anything else if you let it be. Rule number one, find somebody that will let you taste it. And if you like it, drink it. And if you don't, don't. When you taste something you like, realize that it's a living thing, which means you can't keep buying the same thing forever.

7:53So you want to pay attention to the grape first, and second of all, who made it, and then look for more of it. And when you find something you like, buy it, and don't overpay. Don't get hung up in words or lingo or how people describe wine. Don't get hung up in any of that stuff, because if it doesn't make your mouth happy, it doesn't work. It wasn't worth drinking. It's that simple. Hear, hear, Larry, great advice. We need to get talking about your, your work. And so would you mind sharing just a little bit? I'm going to get into the book in just a second, but would you mind maybe telling me a little bit more about what you do, the work that you provide and the clients that you work with?

8:37Yeah, I work with some successful organizations with leadership teams that are struggling with success. One of the things that's true about the world and about organizations is that every organization wants things to stay stable. They want stasis. They want to avoid change. We know what works. We want to continue doing what works. We don't want the world to change. Unfortunately, the world is changing and has been changing since day one at a faster and faster pace. I call it the eternal conflict. You want to live in stasis, but the world won't let you. So what happens is as an organization is successful, it grows.

9:19As it grows, things change. Change creates unexpected circumstances that most leadership teams aren't familiar with. So they have to make decisions based on assumption, not fact. And when they make bad decisions, sometimes they're expensive, sometimes they're fatal no business ever failed due to external forces no business and and i want to be careful here i have 23 years of primary research in this statistically valid technically accurate you know academically rigorous research and six years of proof of concept my my research group excluded retail sales so this isn't true for retail sales but for wholesale sales including through covid no business ever failed due to external forces they always fail due to internal failure of leadership and i've got it broken down in the book and there's only three reasons it's it's really i get barked at when i say this it's really very simple it's not simple.

10:30What it is, is it's complicated, but it's not complex. Mousetrap is a complicated game, but when you drop that ball, if every single thing works the way it's supposed to, you know what's going to happen. The cage is going to fall on the mouse. Complexity is when you're playing chess and you have no idea what the next move will be because there's so many options. So fixing this, doing what's right to survive is complicated. To me, that means it's easy because there's a rule book. You follow the rules, you get success. It's not complex. It's not, I don't necessarily know what's going to happen. I can tell you exactly what's going to happen.

11:17Yeah. So your book, Businesses Don't Fail, They Commit Suicide. By the way, advertising and social media has got to be a little tricky because you got the s word in there and i know that sometimes uh algorithms like oh you gotta be careful when you're using that word i don't know if you've bumped into that but uh but it's definitely very pointed uh the subtitle by the way is how to survive success and thrive in good times and bad so um and i suspect that the the thesis you know has is expanded upon what you just shared but but tell us more about the book well gosh i could trying to do that in 30 seconds is very difficult there go ahead and take there's a 35 there's a thing called corporate life cycle theory which was developed in the 80s and popularized in the 90s and it's the study of how organizations age interestingly enough because organizations are made up of people, organizations age in just as predictable manner as people do, from baby teeth to permanent teeth, through puberty, through the loss of hair, the loss of joints, the wrinkling of skin.

12:32It's absolutely predictable because we're all humans and we all live human lives. Using that as a baseline, I did my research into a particular demographic of organizations because I was tired of people telling me that startups that make it three years will survive. And then that was in the 60s and 70s. Then later in the 70s and the 80s, they said, if they make it five years, they'll survive. I thought that's BS. If you've got people investing in startups and they're all failing before three years, if they don't make it three years, they fail. Those investors are going to stop investing. They're going to figure out why they went wrong and what to do about it.

13:13I wanted to find out why they went wrong. So I spent 23 years of primary research on a statistically valid sample size to find out why they fail. And what I found is that organizations live in three stages of maturity, organizational maturity. This is experience. It's not knowledge. It's not expertise. It's not talent. It's hands-on, been there, done that, burned my hand on the red burner experience. There's youth, adulthood, and youth, adolescence, and adulthood. Youth is narrow and shallow experience. Adolescence is narrow and deep experience. Adulthood is broad and deep experience. When an organization is successful, they go through what's called the arc of success.

14:00It begins with an idea. When that idea is successful, it leads to growth. Growth leads to complexity. Complexity leads to the need for controls. Controls lead to the loss of flexibility. So you go from a free-form environment to an environment where change has controlled what you can do, and you have to learn how to make decisions under different rules and guidelines. The reason organizations fail in youth is a lack of clarity of purpose. The reason they fail in adolescence is a lack of consistency of performance and the reason they fail in adulthood is a lack of engagement of people i call it the three p's purpose performance people and to make things even easier oh wait maybe i'm making them more complex no there's a tool that was developed to measure the leading non-financial financial indicators of organizational capacity to create sustainable growth, leading non-economic indicators for the capacity to create continuous growth.

15:16And there's eight of them. Three of them are youth, three of them are adolescents, two of them are adulthood. So when I engage with a new entity, and by the way, I'm not recruiting for clients. I'm semi-retired. You got to be special to get me to work for you. That's why I'm delivering stuff electronically, et cetera, and doing these podcasts because I want to share the wealth. What it does is it's like a 10-minute assessment. It's a yes, no question assessment. And it tells you of those eight indicators, your weakest to your strongest. And then we go in and attack one of the three weakest based on the most urgent need.

15:56Best example, if you're having cashflow problems. We look for the one of those top three weakest factors that will impact your cash the fastest. That's the one we fix first. Then we go to your next weakest and your next weakest. And then we build you an organization that is more than durable. It's resilient. It's an organization that knows how to handle change by doing something very simple. It stops reacting to it and it starts owning it. When I speak to groups, I ask, I always open with the same question. How many of you, generally speaking, believe that people like change? Larger the audience, the more hands I'll get.

16:41But even with 500 people, I'll get 10, 15 hands. Then I say, okay, how many of you, generally speaking, believe people don't like change? And of course, all the hands go up. And then I say, you're all wrong. Every one of you that just raised your hand is wrong. Every human being on earth loves change. Change is not the problem. The problem is who's doing it. Everyone loves change they do to others. No one likes the change others do unto them. So the secret to managing change is getting your organization to think critically. That's a classic term, critical thinking, forward thinking. and to learn how to make change yours.

17:31So it's you imposing the change instead of the others imposing the change on you. It's fascinating stuff. And that's why I say it's simple. It's not simple. It's complicated, but it's not complex. Larry, your website is mandleberg.biz. We've got about 10 seconds here. We're really backed up against the wall here. Your book is on Amazon. It's called Businesses Don't Fail to Commit Suicide, How to Survive Success and Thrive in Good Times and Bad. It is both in paperback and Kindle. Larry, when someone goes to your website, what would you recommend they do? Schedule a free 20-minute consult with me to ask me questions and let me help you for free.

18:17Wow, what a great offer. Larry Mandelberg, again, Mandelberg Consulting, found on the web at mandelberg.biz. and the book is Businesses Don't Fail to Commit Suicide. Larry, thank you so much for joining us. My pleasure. Thank you.

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