Staying above water today is tough. Most business owners are doing their best to keep pace with growth and external forces. They know how to use their teams to the fullest. They are adaptive and know their people.

Yet sustaining a business past the first five years is a major challenge. A large percent of businesses don’t survive those first five years. Derailment of a business leader, especially an owner, is a major cause. How can that happen?

As I tell many of my clients, there’s always a caution light flashing in some part of the business. Train yourself to read the faint signals, both positive and negative. You don’t want to be the cause of drowning both yourself and your business. Owner derailment can occur.

The external world is tough enough when you stay on track. The word derailment applies to any business owner or leader who involuntarily or unexpectedly steps down from the top position. It is the owner/leader who is responsible for any derailment.

All the derailment factors are under the owner’s control. These can be the inability to respond to the external forces impinging on the business; personality issues, like taking credit for a lot of results and not recognizing employee or customer contributions; not building relationships within and outside the business; and failure to delegate.

These are a few; the list can be endless when you consider each owner’s unique knowledge, experience and competencies. The inability to adapt to change is a factor in derailment. Though much of a business owner’s journey is straight, there are turns that come up quickly, and adjusting to the changes in direction is a must. The inability to create teams and build strong relationships leaves the owner the only one setting priorities and making important decisions. Mobilizing the team requires strong interpersonal skills to motivate, inspire change and get more done.

Inadequate communication of the business vision and objectives can be an express derailer. A broad focus can help an owner see more and listen more to his or her team members. Overall inadequate interpersonal skills and flexibility are the most critical components of leader derailment. A big ego and arrogance make it even lonelier at the top.

If the owner’s background is finance or marketing, broadening the perspective can provide more knowledge of each function in the business whether production, technology, administration or sales. The owner can then ask questions from the perspective of each function. He or she will be able to handle the twists and turns of the business.

A derailed business owner typically does not remain in the company. They are suddenly outside looking in. The danger is the business itself is now in serious trouble. Unless the number of shareholders is a few more than one, the business is shut down. A replacement to save it is usually found by the stakeholders as quickly as possible.

What could the owner have done to prevent this occurrence? By learning how to build teams, selecting the right people and empowering them to achieve specific objectives; by not reacting and first reflecting on significant changes; by treating each mistake as an opportunity to learn; by having a strategic focus; and by always have a plan to share internally.

The cost of losing a derailed business owner because of ineffective behavior is high. According to the Center for Creative Leadership, the cost can be as high as $500,000 when you include the hidden costs to recruit new talent, the loss of intellectual capital, missed business objectives, low company morale and high employee stress

In most cases, it’s the owner’s ego that starts the business decline. People see that their voice won’t be heard, their stress level rises, disagreements have a one-sided outcome, and profitability declines. As a business owner, renew your open mindedness, your collaborative style, your flexibility and adaptiveness, and your emotional intelligence. Prepare for a long legacy journey.

Bob Vecchiotti is a business adviser and executive coach. He can be reached at