Harold Geneen, the longtime boss of ITT Corp., a famous 20th-century conglomerate, was a great wordsmith who said: “The only unforgivable sin in business is to run out of cash.” I’m not sure that I ever agreed with such a broad and all-encompassing assertion–mainly because, in my own experience, money has rarely been the ultimate determining factor in a business’s success or failure.
Especially in the last 10 years, abundant funding for even utterly irrational stories–not to mention outright frauds–has been relatively easy to come by, whether or not anyone believed that the companies would ultimately last, and whether or not their business propositions made any real sense. How else to explain why any bank could have continued to give Donald Trump loans? The money is always there. It’s just the pockets that change from time to time. If you aggressively chase a clear and compelling vision, rather than chasing the money, the required funding will eventually find you. Smart money doesn’t lead, it follows. And it bets most of the time on the jockey rather than the horse.
But even if Geneen’s basic proposition made historical sense and accurately describes the abrupt end of many companies over the years, it’s definitely not the most critical error that a startup CEO can make. This is true in part because any problem (of whatever gravity and size) that you can fix with a check isn’t really an existential concern; it’s just another expense item that needs to be addressed.
Lethal problems are those that can kill your company’s culture, breach the basic foundations on which the business is built, and imperil its ongoing survival. Money problems, at the end of the day, are mainly just challenges to your checkbook. In fact, as a general rule, I’d put weak management, absent product/market fit, and bad timing all ahead of funding shortfalls on the critical causation list. But none of these are the number one risk for startups.
Startups, in their early and formative years, are a lot more like families than traditional businesses. In healthy businesses, the single most important element, the glue that sticks and holds the whole enterprise together, is trust. In “sick” businesses, it’s often money, guilt, or fear. Success depends on the team trusting and having confidence in their leaders, but it’s just as critical that the leaders trust and believe in their people as well. Trust in every enterprise is at least a two-way street. According to the 2020 Edelman Trust Barometer Special Report on brands, it’s actually a three-way intersection, because 86 percent of consumers say that trusting a brand is important or critical in deciding whether to buy or use its products or services.
Trusting and relying on each other is especially crucial in new ventures, where the path and the future are unknown and uncertain. A startup is in part a sacred and shared promise; a leap of faith bound by the belief that there will be a safe and secure place to land, or that you’ll learn to fly. Your faith has to be stronger than your fear. You’ve got to believe it to be it, and then you have to execute. As Bruce Springsteen wrote: “But these promises we make at night, oh that’s all they are. Unless we fill them with faith and love, they’re as empty as the howlin’ wind.”
It takes time, patience, and a lot of hard work to develop and build trust throughout a business–and only a moment or two of suspicion, not even proof, to destroy that trust. It’s that fragile an idea and that precious a commodity. Losing the trust and confidence of your team is the most lethal mistake any entrepreneur can make. And it’s almost always an unrecoverable error. Charismatic and narcissistic entrepreneurs often think that it’s all about being loved; even those who’ve never experienced or expressed real love share this fantasy. But to be trusted is a far greater compliment and commitment than to be loved. To be the one who can always be counted on, the go-to person.
In many ways, political campaigns share the common characteristics of startups: Intense, feverish activities. Lots of adrenaline and very little sleep. And an uncompromising belief and dedication to a shared dream. And much like life in a startup (after it receives serious initial funding or goes public), the real work of building, managing, and growing the enterprise–whether a business or a country–starts after the champagne and the celebrations. That’s when the rubber really hits the road. And every aspect of the adventure proceeds from a firm foundation of trust in the leaders, the team, and the dream.
But where do you go if the leader never expected to win? He never wanted to do the essential and unavoidable day-to-day work required. And he never truly believed in the team, the dream, or even in his own insecure self?
One of our soon-to-be-dumped Liar-in-Chief’s most fundamental-and-telling flaws is that he has never trusted anyone for a moment, not even his family, throughout his many shady and suspect ventures. This is a man who stands accused of consistently cheating his siblings and relatives alike. Trump’s only claim to fame (true or false) was always the same: He was all about money. Sadly, money doesn’t care who makes it. In a caring world it’s people, not politics, that matter the most. Trump never got it. The best entrepreneurs pride themselves on the many people whose lives they’ve improved, and whom they’ve helped fashion into serious and dedicated grown-ups, just as much as on the businesses they built.
Trump bragged incessantly about making a lot of money for people (mostly himself and his sick and sleazy offspring) and never spoke about helping to make people into better versions of themselves. Fish and families rot from the head. We can watch this latest disappointment play out every day as a petty and frenzied Trump fires officials across the government who are unwilling to maintain his fraudulent façade. And he holds mid- and low-level staffers hostage by insisting that they maintain his charade and not start looking for their next jobs, lest they be fired.
As we are also seeing every passing day, when you’ve lied and cheated to “win” your entire life, you come to believe that cheating and lying are the only ways that anyone else can win. In addition, if you are foolhardy enough to create and encourage a lifelong and multi-generational culture of lies and corruption, where the “alternative” truth is a fluid and flexible concept, you sow the seeds of your own demise. You come to learn that people who will lie for you will eventually lie to and about you.
In the last four years, confounded by 20,000 or more documented lies from the president, the question the entire world asked most often about our government was a simple one: If they don’t remember their lies, how would you ever expect them to remember and honor their promises? No one ever expected otherwise. We got exactly what we deserved for electing Trump: Truth decay. And trust in ourselves, our system, and our country are among the saddest casualties.
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.