Last week we began our discussion of the six common mistakes that entrepreneurs make by examining the first three. In review, they are:
1. Allowing your ego to dilute yourself and your team.
2. Merging yourself with your company.
3. Not understanding the role of the CEO.
Let’s move on to the next three.
Mistake #4: Lack of clarity. Whether in role, job descriptions or not understanding the measurements of success and failure, a lack of clarity can pose big problems for a company. The CEO’s role is to bring clarity to the business purpose, mission, initiatives, roles, organization – the clearer he can present the story and the company with all its functions and intricacies, the better leverage he will have with employees, clients, and the market in general
The antidote: As we discussed last week in mistake #3, establish Key Performance Indicators (such as client satisfaction ratio, prospecting to opportunity to close the deal ratio, response time to client inquiries, revenue, net profit and gross profit, among others) and be sure to stay focused on your goals and objectives. Manage the business through its purpose, performance, principles and values. Lose sight of these and you will lose sight of your role.
Mistake #5: Avoiding difficult conversations.
No one likes difficult conversations. But in business (and in life in general), they must not be avoided. Being upfront with your employees or colleagues about difficult situations can lead to greater transparency and trust, more direct communication, and improved alignment between the employee and his role. Avoiding them can only hurt your business. When avoiding difficult conversations, you allow bad situations to perpetuate themselves and fester the situations that created the need for the conversation in the first place. Decisiveness is paramount when running a business. You think wisely, your listen carefully to yourself and outside advisors, and you have these difficult conversations to allow the best to run smoothly.
This reminds me of a story. The founder and CEO of a successful company hired his son as a possible successor. After a few years in the trenches, the son was not performing at the level his father had hoped for, so he fired him for non-performance—a hard exchange, indeed. Naturally the son was very upset, but as he was walking out of his father’s office the father asked him to stop and come back. Respectful of his father, the son obeyed. The father said, “Son, I understand you were just fired from your job. As your father, I want you to know that I feel for you, and I will do everything I can to help you get through this difficult time.” A meaningful conversation ensued.
The lesson I take away from this story is this: There is a difference between a Founder/CEO whose responsibility is to his business, its customers and shareholders, and a father whose responsibility is caring for his own grown child. Both situations require difficult conversations – and the cost of avoiding them is extremely high. It could even cost you your business!
Mistake #6: Exclusively Internalizing or Externalizing Responsibility
In my experience, I’ve found that typically male and female business owners are very different when it comes to owning and holding responsibilities. It seems that women tend to internalize their perceived responsibilities and often blame themselves for things gone wrong – while men tend to compartmentalize their responsibilities and avoid taking direct responsibility for business decisions, especially bad ones. Which do you find yourself doing? One answer may not be better than the other – finding a balance will ensure balance within the company.
All of this may sound overwhelming, especially if you’re just starting out. Remember, you’re human you’re going to make mistakes. But also remember that you’re not alone. You can call me if you’d like more customized help with beginning or sustaining your business. Simply revisiting these guidelines may help you keep your head on straight while forging the fantastic journey of entrepreneurship. Good luck!