Part of Newton’s first law of motion states that an object in motion tends to stay in motion, with the same direction and speed, unless an external force is applied to it. If you downsized your business during the recession, you might want to keep this law in mind. Your business may be in motion, but will continuing in your current direction help you reach your personal and professional goals? Consider these three indicators of a dysfunctional business.

1. Constant crisis: If you wake up every day wondering what fires you or your employees will have to put out, you’re probably already deep into constant crisis. The cause: lack of planning and a lack of standard operating procedures.

It’s difficult to get out of this mode because addressing each crisis eats up the time you need to plan, develop, and implement procedures that would have prevented the crisis to begin with. For example, if you underestimate or underprice your work, you will forever be trying to find ways to reduce your production costs.

Also consider that it may only be a matter of time before employees and vendors get fed up with constantly having to do and give more because your lack of planning has become a way of doing business rather than just a phase you’re working through. This too will keep you in constant crisis.

2. Relative success: If you have convinced yourself that your business isn’t all that bad when compared to other dysfunctional businesses, you’ll never achieve true success. Being less bad is not good.

Rather than judge your business on relative success, judge it based on absolute success. This requires planning, but it also requires creating metrics that allow you to measure progress toward a predefined goal. Keep in mind that being better off than you used to be might not be a great place to be either — depending on where you previously were.

3. Broken behavior-consequence strategy: If your business requires that you do almost everything because “if you want it done right, you have to do it yourself,” your business is dysfunctional, and so are you. If staff or subcontractors can’t or won’t follow through on tasks, why are they still there?

It doesn’t make sense to establish rules if you don’t also establish clear and actionable consequences for not following those rules. Why give a salesperson a commission for closing a sale if he or she hasn’t completed the paperwork required to hand the project off to the production team? If employees don’t correctly fill out and turn in timecards by the deadline, why do you pay them on time?

Owning and running a business requires leadership. Without leadership, a business can quickly become dysfunctional. If any or all of these indicators are evident at your company, step back from your business long enough to develop an outside view.

And keep in mind these words of wisdom from a bumper sticker inspired by Albert Einstein: “The problems we face will not be solved by the minds that created them.” If you can’t eliminate the reasons for your dysfunction, find someone who can.

Shawn McCadden founded, operated, and sold a successful design/build company. A co-founder of the Residential Design/Build Institute, he speaks at industry events and consults with remodeling companies.

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In the Wave: A surfing metaphor for business decision-making

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