Why Closely Held Companies Need to Argue With Success


By Wayne Rivers, Family Business Institute

There was once a contractor who was blessed with the Midas touch. He bought a small, struggling company, worked diligently and tirelessly for almost 30 years, and built a regional powerhouse with an amazingly consistent track record of profits. In his “spare time,” he utilized the money he created in his operating company to bootstrap his way into millions of dollars of commercial and residential real estate.

By anyone's measurement, this contractor was successful. A few years ago, his three children left their previous careers and joined the company. Not long after the next generation came aboard, tensions became apparent.

The “kids,” along with several other talented key managers, observed things that weren't quite right, issues that needed time, attention, elbow grease, and strategic thinking. The founder, on the other hand, wasn't too bothered. He'd worked very hard to get where he was, and he was finally beginning to enjoy life a little more. There was a bit of a tug-of-war going on. NextGen said, “We have problems! We need change!” The dad said, "I built this company to where it is now without the things you're recommending; why do we need them now?” What NextGen was learning is that it is hard to argue with success! 

In fact, it is VITAL that you argue with success — especially in companies experiencing this intergenerational tug-of-war. There are a few pretty solid reasons why the worst business advice ever uttered is "If it ain't broke, don't fix it." While it may seem to be sensible on the surface, when it comes to closely held construction companies, it is awful counsel! The moment contractors stop tinkering with their businesses is the point when they either begin to stagnate or even decline. Here are the rationalizations for not arguing with success. Don't argue with success if:

  • You're satisfied with where you are or plan to close the doors in the near future.
  • You’re not at all worried about potential catastrophes like death, illness, or disability among senior leaders or other critical personnel.
  • You don't care about integrating and grooming NextGen leaders into the management, operations, and ownership of your company with structure and intentionality.
  • You don't care about where your company is going to be in the next three to five years.
  • You don't care about the needs of your employees for clarity and direction.
  • You don't worry about losing high potential, high impact employees.
  • You don't care if your competition is vaulting past you.
  • You don't care if your volume plateaus and profitability begins to fade.
  • You fear your children and senior managers may take the company to heights of which even you never dreamed.

Our argument with the "don't argue with success" position is that it limits and constrains a roofing company in a way that is often difficult to detect but powerful and insidious nonetheless. It can cause “hardening of the attitudes” and decline. It is the curtain coming down on a successful, long-running show. It means fewer jobs, less excitement, less energy, and more frustration. Many contractors who didn't want to argue with success now wish they had so they’d have plans in place to cope with slowing revenues, jobs and schedules pushing, declining backlogs, and the need to right size. 

There are serious, high impact, long-term benefits associated with arguing with success. What we're talking about is undergoing a rigorous process of analyzing and reanalyzing your construction company for problems and opportunities.

That means utilizing a structured process for long-term, forward-looking business planning versus the traditional “firefighting” methodology many contractors seem to prefer. The positives of rigorous self-examination, open, blunt, honest communication, and the alignment of corporate people, strategies, and goals are pretty compelling reasons for arguing with success.

The next time you hear someone say, “It's hard to argue with success,” don't roll your eyes and allow your blood pressure to creep upward. Grab this article and have a serious heart-to-heart. Arguing with success is precisely what most contractors need – especially during times like these.