Dan Adams is the founder of The AIM Institute and author of the books Business Builders and New Product Blueprinting, as well as the blog Awkward Realities and video series B2B Organic Growth. He is a chemical engineer with a listing in the National Inventors Hall of Fame. Adams has trained tens of thousands of B2B professionals globally in the front end of innovation and works with senior executives on driving profitable, sustainable growth. For more information, please visit theaiminstitute.com.

Corporate America is struggling. Few are able to demonstrate a track record of consistently dependable and profitable growth. This makes all parties — boards, C-suite leaders, managers and employees — unhappy. The knee-jerk scapegoat is the external environment (and with a shaky economy and rampant inflation, this certainly feels logical).

The labor market is, well … disgruntled. And there’s a long-held suspicion that the short-term financial focus most companies embrace is unhealthy, yet we can’t seem to break the habit.

Is there a root cause feeding all this misery? While numerous factors play into the dynamic, a big glaring one is that too many companies are led by executives who’ve drifted far from the Builder mindset (and behavior) that originally made them great.

A Builder is someone who behaves like the founder of a company, with a passion to grow by innovating for customers. Unfortunately, many companies have senior leaders who don’t think like Builders, but like Decorators, with a focus on “curb appeal” and an obsession with the quarterly financial report. That’s a big problem — one that impacts every corner of the organization.

As leaders have drifted away from Builder behavior, they’ve started making unforced, self-inflicted errors that are slowing their companies’ growth. Truly in some cases, the company would grow faster and better if their leaders stayed home and did nothing.

My book “Business Builders: How to Become an Admired & Trusted Corporate Leader” explains the four categories of leaders — Builders, Remodelers, Decorators and Realtors. There’s a place for every type of leader — but Builders need to be driving the bus. Companies with Builders in charge not only enjoy sustainable growth, but everyone is just happier. When the wrong people are in the wrong seats, of course boards are unhappy with the lack of growth, but employees are unhappy too. Anyone who’s ever worked for, say, a Decorator and then a Builder knows it’s night and day. The whole company feels different.

Here’s the thing: It’s not always obvious who’s who — even to the leaders in question. A CEO might think they’re a Builder but may not be seen that way by others. That’s why the book delves into the mindsets of each type of leader and the havoc the wrong ones can wreak — and it’s why I’m offering a quick and easy free assessment at areyoua businessbuilder.com.

Here are just a few insights from Business Builders:

There’s a dismaying shortage of Builders at the top. While every company was founded by a Builder, our research suggests only one-third to one-half of them are still led by Builders. The following excerpt from Business Builders explains the methodology and results:

To avoid bias in our survey, we didn’t use these four terms: Builder, Remodeler, Decorator and Realtor. We didn’t think many leaders would cheerfully identify themselves as a Decorator. Instead, we asked respondents to characterize the behaviors of their companies’ senior leaders using the four descriptions below. We added our four labels after the survey.

• Driving organic growth by delivering differentiated value to customers. (Builder)
• Improving operational efficiency through productivity, quality and costs. (Remodeler)
• Presenting favorable financial performance and outlook to investors. (Decorator)
• Pursuing external alliances, including mergers and acquisitions. (Realtor)

We asked survey respondents to identify the primary passion of senior leaders in their company and 53% of senior leaders gave themselves the Builder description, while only 32% of subordinates characterized their senior leaders this way. More subordinates thought of their senior leaders as Remodelers (41%) focused on operational efficiency.

There’s a misconception that once a company is established, it can be safely handed over to other types of leaders. But no company facing competition can maintain profitable growth without aggressively meeting customers’ changing needs. The need for Builder behavior NEVER goes away. Non-builder leaders CAN coast for a long time before the company descends into mediocrity, irrelevance or non-existence. Since the descent can take long, a company can be lulled into thinking Builders are no longer needed. This is an illusion.

Being a Builder is a mindset, not a fixed reality. Non-Builders can become Builders by embracing the right beliefs and acting on them. A Builder’s cornerstone belief is a commitment to the “first duty:” Leave your business stronger than you found it.

All stakeholders — shareholders, employees, customers, suppliers and communities — benefit when a company’s growth is not just strong and profitable, but also sustainable. When growth is just unsustainable window dressing, only opportunistic leaders and opportunistic investors benefit. When CEOs live for their retirement, without a thought for the lives their decisions impact, they’ve betrayed their first duty and forsaken the Builder mindset.

Maximizing shareholder wealth is NOT a worthy goal. GE’s Jack Welch is the prime example of a CEO who focused on this goal in the 80s and 90s, engaging in an intense combination of downsizing, outsourcing, offshoring and “financial engineering.” It worked — for the short-term. But 20 years after Welch’s 2001 retirement, GE’s value was at a quarter of its peak — and the company’s previous reputation for manufacturing leadership, employee loyalty and growth was in shambles.

Research shows that maximizing shareholder wealth is a lousy goal. It’s not inspiring to employees, quite the opposite. And when you look at how the stock price of a publicly traded company is valued — with 95% being based on expectations of future growth — it’s not hard to see that the short-term focus non-Builders take defies investor logic.

Market-facing innovation MUST be your primary focus. Simply put, if you aren’t continuously working to deliver superior, differentiated value to customers, your products and services become interchangeable with those of your competitors. You end up being forced to compete on price — and you fall into the “Commodity Death Spiral.” The only way to avoid this fate is to direct most of your resources into market-facing innovation.

Companies that prize market-facing innovation tend to be headed up by Builders. Non-builders tend to put their energies and funding toward things like quality improvements or cost reductions or building a powerhouse salesforce. These may be fine secondary initiatives, but market-facing innovation isn’t an initiative you turn off and on. Understanding and meeting market needs should define your company.

Too many leaders suffer from first-domino fixation — and worse: first-domino amnesia! They take an action thinking they’re tipping just one domino, but there’s always another that tips later.

Promote Builders. Put everyone else in a supporting role. When you leave a Decorator in charge — someone who is constantly trying to improve the company but lacks passion or an end goal — you’re failing to inspire employees, and you’re chasing away future Builders. Don’t fire those who aren’t Builders; they can still improve operational efficiency, make acquisitions or help you look good on Wall Street. You need them, but in supporting roles.

You can’t afford to hesitate with changes at the senior leadership level, but you can take more time with middle management. Give them a chance to show what they can do. Establish new measures of success, starting with their “duty” to leave their business stronger than they found it. When the Builder mindset predominates, it becomes much easier to take the other vital steps, like creating a growth capabilities roadmap and seeking out long-term-growth-minded investors.

I’ve seen billion-dollar businesses completely reinvent themselves in this manner. It’s not easy, and it takes several years. But as a leader, you won’t be on your own. You’ll have many very motivated employees coming alongside to join you. I&FMM.