When we want to launch a new initiative, when we want to do something we have not done before and perhaps not very many other people have done it before us, we charge ahead into unknown territory. Gone are fixed procedures, structures and the safety of business as usual. Instead we face oftentimes daunting obstacles, alluring possibilities and not least, we face ourselves and our weaknesses and strengths.
Much is being written and said about our communities needing to have more entrepreneurs to make sure that we will have a thriving business environment in the future. Much less is being written and said about actually building up a business from scratch and the types of situations that can/will land us in. One serial entrepreneur who has spilled the beans on highs and lows of the entrepreneur life is Ben Horowitz in his book “The Hard Thing About Hard Things”. It is very little about gloss and glamour and much more about uncertainty and having the back-against-the-wall. It certainly seems a far cry from the theories taught in business schools.
The Only One to Blame
As experts and contributors we are used to working into usually quite defined structures and processes and have people we report to. When we become the person to define the structures and processes, the person to whom others report, it can be angst-provoking. Especially since we cannot expect to be knowledgeable in all areas of the venture. Nonetheless, the buck ultimately always stops with us no matter our skills or talent for the issue at hand. We will get the blame and will hopefully share any glory. A constant reminder to ourselves in these situations should be that all research has shown that we are not alone in feeling doubt and inadequacy. In fact we are in excellent company.
It is important for us to avoid having the current situation and its difficulties force us into short-term thinking. By taking an expedient way around a difficulty, we may save time, money and effort in the here and now, but at the price of increased difficulties in the long-term. What saves us now, may in fact fence us in and prohibit us from making the moves we need to make at a future date. We do not need to make our decisions in isolation. Mentors, networks and most importantly the people working in the parts of the business that are directly affected by the decision can provide valuable input. Often these people have clearer, more up-to-date knowledge about problems and opportunities than we have, particularly if we have become somewhat more removed from everyday activities.
Creativity and accountability also need to be balanced for us to get the best results. We empower people to deliver results, but still hold them accountable to what they have promised to deliver. By granting people freedom within broader confines to solve problems and develop new products and services, we open up for full engagement and motivation from the employees – and potentially for new business opportunities. Further, we build trust and positive relationships this way. Continuous feedback becomes an important tool to ensure that everybody knows what is needed and expected and for Management to learn of challenges and issues that need help being resolved before they have grown into almost insurmountable problems.
The Business & the People
The most important discipline is getting the right people onboard at the right moment for the company. Hiring must look at cultural fit and a fit with the current characteristics of the role to be filled. Will a person who comes from a large established organization thrive and provide value to a small, struggling organization. Does the person have the strengths needed to do the job whilst none of their weaknesses form barriers to their performance. Does the candidate have ambitions for the company or is the candidate ambitious for their own role and career. This difference in ambition can have a huge impact in how much value the candidate will provide to the organization.
We may be faced with situations where our only choices lie between cutting people, product or profit. Which do we cut? Do we cut the people, which leaves us with a smaller group of potentially demotivated people whom we’ll have to ask to work even harder to create the services and products that are our livelihood. Do we cut the product, which could lead to a product that is poorer in quality and/or in features and thus does not give customers the expected value. Do we dial back on the amount of profit we generate, which could mean that we end up having to go out of business. We need to treat the people right, especially when we must cut some jobs. The logic is quite simple: motivated employees make good products and services, good products and services bring value to customers and thus bring profit. Being a good place to work is key.
Demoting or even lay off people is one of the hardest tasks we can be faced with. And so it should be. It should never be a decision taken in complete isolation from the people affected. It is important to be clear about the reasons and execute the decision as swiftly as is possible so as to prevent rumors from forming and gathering momentum. We risk fueling insecurity and demotivation amongst the remaining people making them start to be open to accepting offers from other companies.
Peace time – War time
Ben Horowitz makes an interesting distinction between two types of CEOs: the peace time CEO and the War time CEO. He goes on to say that business schools and most books deal almost exclusively with the former of the two types. However, what is typically needed in new ventures is the latter kind. That implies that there is no school for running new ventures other than the school of hard knocks, and having a mentor who has experience in running new ventures to help us avoid the worst pitfalls.
The difference between peace and war is huge. In times of peace we have advantages over our competitors and we have a growing market. We are in a secure position with a future that looks the best shades of bright. That allows us to focus on working to our strengths, maximizing our opportunities and further growing our market. It is what all the theories and models taught at schools deal with. However, in our world of increasing uncertainty, ambiguity and change, where the average lifespan of companies grows shorter and shorter, it does seem like the Peace Time approach may be losing ground. Even large and established companies need to think more like start-ups; need to engage in or at least be well prepared for War Time.
In war time we face a situation where our very existence is threatened by a number of factors such as the abilities and products from our competition, changes in society that may make it more difficult for us to run our business, money squeezes, changes in trends and norms that make our products less attractive to our target customers. These kinds of challenges do not call for long analysis via a gamut of theories and models. It calls upon us to make a decision, stand by it and rally everybody in our company to live and breathe this decision for us to survive. It calls upon us to be able and willing to change direction, as and when the situation around us develops. It calls for superb problem-solving and implementation skills, not structure, process or rule focus.
More and more of us find ourselves the leader of some venture or initiative. Whether it is a start-up company, a charitable venture we founded and lead or perhaps an interest group. For those of us who come from corporate life, and that is probably still the majority of us, the change from being a contributor to being the ultimate buck stop for everything can be somewhat daunting. Knowing that we are not alone in feeling doubt and worry, is certainly a help on some levels. However, getting practical advice from people who have been there and done that before, is priceless. As is the ability to motivate and learn from the people we work with. Because, even if the buck does stop with us, we are only as alone as we make ourselves be.Feel inspired? Have ideas? Need to launch initiatives?
Get in touch with NT Management Consulting today.