The Seven Deadly Sins of Transition: A Series

By: John Hotson,
Business Transition Alliance Co-Founder

Deadly Sin #5: Building a Winning Culture

In the first four articles in this series we talked about how owners who have built up a successful business have worked hard on seven good habits that have served them well in developing their business. Now however they need to undo and rework those good habits if they are to successfully transition the business, either through a sale or hand-off to family.

The fifth habit that owners have to rework is “Building a Winning Culture

If your company is like most, your culture is based on winning business by doing the same things over and over again. This “rinse and repeat until rich” strategy has served you well over the years. Winning has been rewarded and failures have been played down or even punished.

One of the outcomes for a business that has succeeded for many years by using this approach consistently can be a lack of incentive for thinking outside the box. While this may work well under your leadership, it will most likely not work for the next generation of leaders. As a result potential third party purchaser, or the existing management team will not place as high a value on your business as you may have in mind. Their world will be entirely different from the one you came up in.

Building a Winning Culture

As you face your transition you need to encourage your people to think differently. The focus needs to be less on winning and more on looking for new opportunities that may in fact be unsuccessful. In order to support this mindset you need to “Expect to Fail

In the words of Thomas Edison:

“I have not failed. I’ve just found 10,000 ways that won’t work.”

In his ground-breaking book BOLD, Peter Diamandis talks about how the next generation of businesses will be dramatically influenced by advances in a variety of technologies, including: networks and sensors, infinite computing, artificial intelligence, robotics and synthetic biology. In order for future leaders to compete successfully, a failure-tolerant structure must be developed that embraces how technology will impact their business.

This happens by building on a few core principles:

  • Acceptance of failure: You have to accept that stuff happens and failure is commonplace – this needs to be internalized so that failure isn’t punished, but rather embraced!
  • Massive redundancy: Then, it needs to be easy to have lots of redundancy built into the system – for designers, that means lots of designs get generated. For startups, that means lots of ideas are tested. And for marketers that means lots of different products and services get developed.
  • Cheap, easy, fast: As a side-effect of the redundancy, it needs to be easy, cheap, and fast to have lots of ideas, lots of products, or write lots of code. The harder it is, harder it will be to create redundancy.
  • Iterative, reality-based testing: Testing these individual components constantly becomes key – you need to force failure on the system to figure out how it reacts from a system-wide level.
    • Don’t delay. Fail early. Fail often!

As Winston Churchill said:

“Success is stumbling from failure to failure with no loss of enthusiasm.” 

Building up processes based on the principles above makes it easier and easier to deal with failure and come out on the other side!

Next 30 days: Identify the riskiest thing you could do in your business over the next 12 months and have your staff identify what it would take to make it work.


  • Creativity Inc. – Catmull
  • Forbes
  • Darkest Hour – McCarten
  • Bold – Diamandis and Kotler

About John Hotson:

John is a seasoned marketing and communications professional. He has worked as both a business owner and advisor to owners who are committed to improving the value of their business. John is a co-founder of The Business Transition Alliance.


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