Barry Dodd: Don't believe the hype – in business, as in sport, ego often comes before failure

I was asked to explain myself.

My theory was based on experience. Several companies I've recently seen in administration had just won an award. Of course, it's nice to win awards and it's a mark of achievement. But perhaps there's a danger in glory too.

A total of 3,313 companies fell into insolvency in the third quarter of the year. These are times when that old-fashioned warning should be dusted off: When the going gets tough, the tough get going.

Many people wonder what the secrets of business success are, but one of the questions they rarely ask is about the signs of impending failure. If you come across a company that invests in its own flag, seeks accolades, and the boss has a personalised number plate, watch out. There's a quality that unites these three acts – ego.

The need to flaunt success, shout too loudly, or believe your own hype could say one thing: you put style before substance. History is full of stories, parables and teachings that all amount to the maxim that pride comes before a fall. But why can boasting about success potentially be the nail in the coffin? Because showing off is all about what you've achieved, it focuses on what you've done and how much you deserve. It can stop you thinking about what you need to do right now and in

the future.

In the present economic climate where the profit margin is wafer-thin for many companies it is essential for them to develop innovative new products or services. And innovation is about looking forward not looking backwards.

Flying your own flag or coveting awards are not motivations that lead to meaningful success. The flashiness of some Premier League footballers pretty much illustrates the problem. As the players show off their extravagant lifestyles, their clubs face financial meltdown – clubs of all sizes are struggling with the excesses of debt financing and players' toxic and unsustainable wages. Critics have said top-end footballer salaries make the bonus culture and risk taking of the investment banking industry look conservative.

I'm not saying money is the enemy. The goal of entrepreneurs must be to make a profit. I have many years of international business expertise. The GSM Group, founded more than 30 years ago, has a track record of increased profitability by staying innovative and responsive to customer needs.

Business sustainability and increased profits are just two of the benefits that innovation can deliver. Innovation drives our economy. Working with explorative minds, investing in research, harnessing science – all these things add quality and value to work and to life.

But investment in innovation is at risk. The Government is scrapping regional development agencies. Although grants are no longer available, it's crucial we continue to invest in innovation and it's important for business leaders to show optimism. Yorkshire has strong universities and of course, the Yorkshire work ethic is one that has international renown.

Whatever your politics, it's notable that Ed Miliband is the first MP from a Yorkshire seat to lead Labour since Hugh Gaitskell in the 1950s

and '60s. And that the strong Yorkshire contingent in his Shadow Cabinet has resulted in it being dubbed "the Yorkshire Mafia". It isn't a symptom of being biased to Yorkshire but a sign that Yorkshire is simply delivering the best people. Yorkshire increasingly offers inspiration and leadership on a national and global stage.

We have highly innovative people who deserve investment. This is why I decided to champion a venture with fellow Yorkshire business peers that not only feeds skills and innovation into business but also champions brand Yorkshire, the Yorkshire Enterprise Partnership CIC.

During the present economic downturn there's the risk of a knee-jerk reaction of battening down the hatches and investing in nothing new,

of focusing on what's safe, but it's those companies that increase innovation who will have a real competitive advantage: innovation will drive their long-term growth.

Now is not the time to be complacent or admire ourselves in the mirror. Never before has it been so crucial for the business world to take

innovative steps and work together with the embryonic Yorkshire Enterprise Partnership to grow and strengthen the regional economy. Only then can we give ourselves a pat on the back.