It is the classic mistake of many successful entrepreneurs: the expertise flop. What begins as an innocent choice to hire external consultants and many managers can quickly lead to the loss of a company and even the entire fortune of the entrepreneur. The expertise flop is a train that, once set in motion, is sometimes difficult to stop.
I myself have also been trapped in this pitfall a long time ago and still have nightmares about it. Fortunately, I was able to intervene in time and derail the train, but not every entrepreneur sees this trap coming or has the ability to intervene in time.
A Good Entrepreneur Is Open For Good Advice
You might think that it is wise as an entrepreneur to get well-informed advice from people who understand matters you are less familiar with. That is true, but it is important that advice does not lead to an expertise flop. You should therefore better speak of being informed.
Recently, I encountered another typical case of the expertise flop in the Netherlands. Let's call him John for convenience. During his university studies, John discovered a solution to a problem that turned out to be a market gap. With this unique proposition, which other providers did not dare or think of, he quickly captured a significant market share in the business sector. Each year, his company grew steadily, and soon he had about a hundred employees. The customers were happy, the employees were happy, and John and his bank account were also happy.
Because his industry is quite conservative, it took more than ten years before the competition understood and could offer what made his company so special. Although this was no cause for panic, John realized that he needed to anticipate these changes. New markets had to be explored, and perhaps new propositions had to be brought to market.
The problem, however, was that his offerings had almost sold themselves up to that point. There had been no need for marketing for years, and entering new markets and launching new propositions meant rapid growth. But how was he supposed to manage all this?
The First Phase of the Expertise Flop
Although somewhat late, it was wise of John to innovate and professionalize. If you never do marketing, never try new things, and do not, or slowly professionalize your business, you will have a problem sooner or later. But what John did not know, and probably still does not know, is that this is the moment when you can unknowingly enter the first phase of the expertise flop. The train is not moving yet, but the doors are open.
In John's case, he decided, supported by profit margins and his well-filled bank account, to appoint an external CEO. This would give him the freedom to let his innovative mind come up with new golden eggs. In addition, a professionalization plan was developed, which included more structured processes and better management, and more attention had to be paid to marketing. The job tap was turned on, and now everything would be fine.
The Second Phase of the Expertise Flop
When you turn on the job tap, you actually always have to buy a mop, but the job boards never tell you that. In a matter of a few months, the size of the company doubled, and everyone was hard at work. But what they were so busy with, no one actually knew anymore, so extra managers had to be deployed, and the existing managers had to be replaced. Only the latter did not happen, resulting in people in positions they did not have the capacity and skills for. The marketing manager had previously written some texts for the website alongside his normal duties and now had to manage a team of web experts, online marketers, SEO, and SEA specialists, but how do you do that?
Another consequence of the rapid growth was that there was twice as much expertise and therefore opinions and ideas on the table. Sometimes even very useful ideas. But how do you deal with that? Hire even more experts and managers? Put everything on the new CEO's plate? John was busy laying his golden eggs, so he had no time for that. The train was moving to destination 'Unknown'.
The Third Phase of the Expertise Flop
The first CEO quickly grabbed his suitcase when he saw all the work that had to be done and jumped off the moving train. Better a few scrapes from the fall than getting tired of hard work. Besides, he knew the destination 'Unknown' and didn't want to go there at all.
Fortunately, the next experienced CEO was already waiting on the next platform, and after a short stop, he could comfortably settle in the first-class compartment.
Funny that there are always a few great CEOs waiting on every platform. As if they never have anything to do until someone in need with a big bag of money needs them.
It quickly became clear that not much insight and experience were needed to see that everything was a mess and the train seemed directionless. But no problem! He knew what to do. External brand managers, external process managers, and twenty agencies were put to work to do what needed to be done. Large WHY sessions were held on the heath, process and brand books were written, a new logo was being designed, and of course, a good event agency was hired to celebrate how well everything was going. There was no shortage of expertise within the company!
The problem, however, was that despite all those WHY sessions, consultants, brand books, and other initiatives, little to nothing came of it, and still no one internally knew exactly what they had to do. Even the newly invented golden eggs did not get further than the trash can or the desk of the newly hired business developer. Who should put it on the site, who writes the texts, who makes the briefing, who, what, where, when, how??
Help, who does anything here?!
The driver steps on the gas, in the third car someone pulls the emergency brake, and from the roof, a so-called crocodile expert shouts that we all need to jump off immediately because there is a pink crocodile in the toilet.
Fortunately, a bottle of champagne was opened in the dining car to celebrate how steady the growth was going.
Death or Glory
For John, this is the moment when he must choose between death or glory. Unfortunately, he does not realize this yet, but perhaps after recognizing himself in this article, he will understand.
Due to the accumulation of choices, a few things will likely happen if he does not intervene now:
Employees will become increasingly dissatisfied, and the sickness rate and number of mistakes will rise.
Innovation will hit rock bottom, and the few initiatives that exist will fail due to bureaucracy, endless meetings, compromises, and lack of execution.
The drive for processes and procedures will increase, making the company sluggish and even more bureaucratic.
Money will leak everywhere until cuts have to be made.
Important people will leave, while revenue drops and costs remain high, and the train rushes towards the abyss.
Months later, it will be game over, and John will have to file for bankruptcy.
A tragedy caused by the expertise flop, which could have been prevented by being informed by people around you and, as an entrepreneur, setting the course yourself in this phase and continuing to focus on action instead of management. John can still change the course in this phase, but it will not go without a struggle.
How to Prevent the Expertise Flop
The phase John has entered with his company is not unfamiliar territory for successful entrepreneurs. It is the phase where you are supposed to do things as they should be done, and who are you as an entrepreneur without knowledge of all those different matters to speak against the experts? The 'right' things include having a so-called 'brand' and a 'WHY'. Everything must be documented in processes, and if something goes wrong, an evaluation report must be written.
The more reports and meetings, the better!
The time of focusing on the customer is over; it is now about documenting, regulating, and streamlining within the rules of 'how it should be done'. But precisely this working by the book is the pitfall that leads you into a negative spiral.
As an entrepreneur, you want to steer towards action, you want initiatives to be developed, and employees to proactively express their creativity. However, by strictly working by the book, this is completely counteracted, and unnecessary costs are incurred without any results.
An example within John's company is as follows:
At the moment, an agency has been selected for the WHY session, another agency is still working on a new logo, a third agency on videos where employees inform the customer, and another agency is working on strategy and positioning, and so on. It is our task to make the website SEO-proof and provide the content.
The promised new website, which has been expected for more than six months and is badly needed, is not there yet, and optimizing the current website for SEO is like converting a steam train into a jet plane. Moreover, another agency will be hired for branding, and then another agency for the website. All this is coordinated by an external consultant who works three days a week, and I have already mentioned the marketing manager earlier.
So, a sloppy 100K or much more is being spent on matters that are currently completely irrelevant to the customer or revenue, and I am only talking about the amounts within the marketing department. Not that a WHY session and those other things cannot be useful, but priorities must be set. That is the real problem.
At the moment, for example, there are various commercial initiatives and propositions that business development wants to try out in the market. There is only no one specifically engaged in communicating those propositions, and even if there was, it cannot currently be placed on the website because it is not prepared for that. In other words, a sloppy 100K is being spent while the company is not even able to simply create a new product page. Everyone within the company seems to have lost sight of the essence of the company, including entrepreneur John himself.
A result of this is the following: a considerable amount is spent on an SEO site scan to technically get the site in order and get all the basic pages in order. The result is that there is still a very outdated site in a brand ID that is actually not a brand ID at all, and on which no simple product pages can be created. For a small additional price, we have proposed to completely rebuild the site so that you do not start with a steam train but have the flexibility to create product pages directly. This and much more, by the way.
But the external brand consultant does not 'dare to propose' that because first the other agencies have to deliver their work, then an agency for the branding has to be selected, and only then comes an agency for the website. The planning for this is about 5 to 6 months. That is how it is agreed internally, and that is how it has to happen. Who is she to have an opinion on that.
Our team has put in the effort and created a fully functional website for free within a few days, where all texts have been rewritten, product pages can be created, and much more customer-friendly functionality is included. I have sent the proposal for the new site to them today and am curious if they will reject it because it does not follow the planned process. I suspect they will.
Keep in mind that at the moment, there is almost no organic traffic to the site; this site will rank directly and attract organic traffic, and if a new branding ever comes, it can be easily implemented, while all the work on the old site will be completely lost if a new site comes.
What Should John Do as an Entrepreneur?
John must take control again, throw all external consultants and experts off the train. Let them shout from the track. He should turn the managers back into employees, and John should focus on realizing things that really make a difference. Only when this is in order is there room for heath sessions, brand books, and the like. Additionally, it is equally important that John gathers everyone and emphasizes that the established processes and procedures are just rules of the game and that anyone who achieves something by breaking these procedures gets a bonus.
Because John's company is not a company that does things as they should be done and as they are described in the books. That was precisely the reason they were initially successful: by doing things differently. With an emphasis on doing.
Chances are that John could use some coaching for this because you have to stand strong to tell people who have been practicing a profession for years, which you know little about yourself, that they are wrong. Why coaching? Coaching can ensure that he returns to his original strength that he had as a young entrepreneur when he took on players who had been doing what he wanted to do for years. Returning to the confidence that when you do things your way and really believe in it, it usually works. That is at least much better than being stuck in the expertise flop, where you can actually do nothing more than wait for the rails to lead you to nowhere.
Note: Although the described example is based on real events, it is not intended to fully reflect the reality of this specific company. This article is intended to illustrate the essence of the problem and the challenges faced by entrepreneurs like John, without detracting from the actual circumstances of his company. The people involved, including managers and advisors, are sincerely trying to help to the best of their ability. Their expertise is not being questioned, and it is not the intention to ridicule or insult them.
