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The business looked successful from the outside. Revenue was growing. The doors were open for customers. Social media activity gave the impression of momentum. There was a sense of activity among employees and of confidence from leadership. From afar, it appeared that the company was doing well. However, there was another story going on behind the scenes. Regular deadlines were not met. There was not a steady flow of cash. Employees were overwhelmed. Time was lost in making critical decisions. Each day was a struggle to survive. The apparent success of business was a shaky operation that was on the verge of collapse because of the panic.

This is much more prevalent than many realize. There is one of the biggest misconceptions when it comes to entrepreneurship that outward growth means internal health. For many business owners, an assumption is that if they’re making more sales and people are buying, then their business is doing good. The truth is that growth and stability of the business are not synonymous. A company might be making a considerable amount of money without realizing that there are serious issues with how it’s operating that could impact its future.

This is a pattern I have observed over and over again in my experience with entrepreneurs, executives and leadership teams. In Business Coaching, I meet so many business owners who seem successful on the outside score. They are known by their brands, have loyal customers, and their businesses are experiencing rising profits. But once I start talking about their daily business, another story comes out. Its decisions are being made reactively and not strategically. Teams are always pressed for time to meet expectations. Instead of spending time planning for growth, leadership is more into putting out fires.

The first red flag is when there is a sense of urgency that becomes the norm for the business. All requests are considered emergency. All deadlines are important. All challenges require action now. Sometimes it is thrilling to go at this speed. Staff talk about the world as busy and changing. However, with constant urgency comes exhaustion in the long run. Teams become unable to tell the difference between the “real” priorities and the “routine” activities. If it’s all or nothing, nothing.

I recall such a dynamic in my time as Director of the Art Institute. Structure, planning, and accountability are often essential for best organizational performance. However, once they are weakened, even strong people will have trouble. Individuals start using heroic effort rather than working effectively with systems. Some short-term success can still be obtained, at an escalating price. Then the organization can’t function without stress.

Another hidden problem involves leadership overload. If you’re a business owner, you can find yourself becoming the company’s solution to all problems. They receive problems from employees. They are the people who have to give answers to the customers. They are essential for the success of a business. These are through which decisions go. If a business is undergoing such a level of involvement, this can be beneficial for its growth at first. It eventually leads to a hazardous addiction. The owner takes over as the company’s operating system. Once that person is unavailable, overloaded or tired, performance declines right away.

This is usually because an entrepreneur’s business is his or her baby. They wish to guarantee quality. They are eager to please their customers. They wish to have their operations go smoothly. But they end up interfering in all the decisions the organization makes, and, in the process, they end up blocking the development of resilience. They don’t build systems, they build dependence. The business can go on operating, but only by extraordinary effort.

It is often the case that the way to success is not the way to stability, as seen in cash flow management. A lot of businesses look successful on the outside but are actually in dire financial straits. You may be making more money, but so are your costs. Late payments. Unexpected expenses put pressure on the strain. Short term decisions to keep momentum are taken by leadership. These challenges are not seen by the customer, but by the company on a daily basis. Money isn’t always a cause of worry, but it can be.

Breakdowns in communication also play a role in the problem. In an organization that is always under stress, information flows in an irregular manner. Staff are given partial directions. Expectations change frequently. Leaders are preoccupied with current needs and important conversations aren’t taken up. As time goes on, the company becomes confused. The energy expended by teams to deal with uncertainty is energy that is not spent on creating value. Everyone feels busier than ever, but there’s a decline in productivity.

The cleverness and effectiveness with which business organizations can cover up dysfunction is one of the more interesting things about business leadership. Products are still being delivered to customers. Working staff keep on reporting for duty. Revenue continues flowing. On the surface everything looks fine. But on the inside, individuals are in survival mode. Solving today’s problems, rather than addressing the root causes. This gives the false sense of success that can last a month or more.

While coaching leaders, I have observed that sustainable growth of a business relies on creating infrastructure before it is actually needed. Great organizations don’t get into a panic mode and produce outcomes. They use systems, accountability, leadership development and clear processes. They expect problems and don’t just deal with them. They provide stability so that people can operate at their optimum level.

For many business owners, there is a constant need to boost profitability, boost productivity and scale the business. It’s easy to get caught up in just external growth. More customers. More revenue. More expansion. Those goals are significant but so are internal health issues. If the operations are already under stress, then the company cannot scale. Growth amplifies weaknesses. It seldom cures them.

Hopefully, the positive part of this is that companies do not need to be stuck in this vicious cycle. The first step is “acknowledging reality”. Leaders need to be honest in assessing whether they are successful due to effective systems or because they are continually driven to crisis management. They need to discover patterns of recurring issues, enhance communication, refine processes and build leadership across the organization. But most of all, they need to disassociate themselves from the notion of panic as commitment.

The business that thinks it’s doing well but is running on borrowed time is running on borrowed time. Eventually the wear and tear, the inefficiency, or a random problem will show through. It’s not the organizations that work hardest under stress that will survive. They are the ones who replace panic with preparation, chaos with structure and constant reaction with intentional leadership. This is how any business can achieve success, and become resilient for generations to come.