Sunday, June 1, 2014

These 5 Decisions Define You As An Entrepreneur

Julia-Tang-PetersMost aspiring entrepreneurs are convinced that the strength of their initial idea somehow defines them as a leader, as well as the success potential of their derivative business. In my experience, it’s a lot more complicated than that. It takes leadership ability, as well as a good idea, to make a successful entrepreneur, and great leaders evolve from key leadership decisions along the way.

Fortunately, basic leadership and entrepreneurial skills can be acquired from experience and training. If you don’t have the entrepreneur leadership attribute or interest, but want to be an “idea person” or inventor, then I recommend that you find a partner with the requisite skills to implement and run the business from your idea.

Yet we all know that there is a big gap between good entrepreneurs and a great business leaders. Great leaders seem to make the right pivotal decisions at every critical point along the way. I’ve never been able to clearly define those key points, and what separates the good from the great at these points.

So I was happy to see Julia Tang Peters, in her new book “Pivot Points,” tackle this issue. She concludes from her work with many modern business leaders, including CEOs Bud Frankel (Frankel & Company) and Glen Tullman (7wire Ventures), that there are five pivotal decisions that propel certain entrepreneurs to be gifted leaders:

  1. The launching decision. At some point an idea captures your imagination and creating a business becomes more than just about income. You define goals that rivet your attention, galvanizing you to turn dreams into reality. The launching point establishes the platform on which every potential entrepreneur becomes an actualized entrepreneur.

  2. The turning point decision. This is the confluence of your willful decision to do more, and the pressing need to take action. It unleashes an extraordinary verve to take the idea or business to the next level. It tests your capabilities and capacity in various ways, stretching them far beyond your comfort zone and requiring total commitment.

  3. The tipping point decision. Here you are catapulted into leading and working on the business, as distinctly different from the work of mastering your subject and working in the business. At this point you will have built a team whom you trust with substantive responsibilities, freeing you to hone the art of leading, inside and outside the business.

  4. The recommitment decision. Now is the time when you as the leader look at where you are and where you want to go, knowing the need to renew the commitment or leave. For many this happens during disruptive change, like being acquired or being the acquirer. For others, it’s a personal decision to balance family life, or do something different.

  5. The letting go decision.  The ultimate test of leadership is letting go at a time of strength so that others can carry on the work. It may be a hold’em or fold’em business situation, or simply time to plan for succession. This decision point is the most emotionally challenging, since letting go is pivotal in defining the terms of the entrepreneur’s legacy.

I’m certain that an understanding of these points will equip you with the knowledge you need to take the right path on decisions when it matters most. The world is full of high-achievers and high expectations, but without the proper framework for turning entrepreneurial determination into real leadership accomplishment, you risk going nowhere.

I agree with Peters that entrepreneurial leadership is not all about people traits or characteristics, but often about the choices they make at key decision points along the way. Of course, skills in decision-making are not enough alone to make a great entrepreneurial leader. Here are some of the other characteristics I look for:

  • Willing to listen, and will address skeptical views.
  • Always an evangelist and a good communicator.
  • Willing to question assumptions and adapt.
  • Proactively sets metrics and track goals.
  • Ties rewards to performance results.
  • Aggressively takes smart risks.

So a great idea is necessary but not sufficient to make you a great entrepreneur and a great leader. Work on the right characteristics, and think hard about those five key pivotal decisions that can make or break your satisfaction and your legacy. It’s more fun when you are the entrepreneur leader you want to be.

Marty Zwilling


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2 comments:

  1. Hmmm...I think I like the characteristics you name at the end more than the 5 stages at the top. Why?

    Most of the five stages are 'hi class problems.' Most entrepreneurs are simply trying to get a company off the ground and get to some 'basic level of sales / profitability.' But can't. That's the primary reason most entrepreneurs never get to be 'great leaders.' Their organization never reaches the scale needed for them to lead. My guess is that fewer than 1% of all founders ever have the size and scale of organization where they need to lead. So...most of these stages don't really apply. What does, perhaps?

    For most entrepreneurs, I find the real struggles come about in a) finding the 'right' idea, b) finding the 'right team', c) getting any type of meaningful scale in terms of revenue, growth and profitability. Ninety percent of the start-ups I see don't have the above three happen in a meaningful way. For those that progress beyond this and, for example get into a top Incubator and/or get VC or serious funding...most fail to scale to meaningful profitability effectively. They simply lack the explosive growth (or a true profit making, need filling model) to stay in the game. It can take years or a decade to make it. So...there is also the level of bullheadedness and persistence.

    So...five decisions that might matter more to the 'common entrepreneur'...and may be more important than the above:
    1. Define success. Decide why you are starting a business. And put it down on paper. Clearly define 'success' for yourself. After all...entrepreneurs are, above all, people who want agency in defining their own lives. What is success to you? Is it to make ten million dollars or fifty million? Or to create an organization where people are a family and love coming to work? Or to create a lifestyle and career you love going to work in each day? Or to finally be able to work in your dream field...a field no one will hire you in. These are very different choices. Create a vision of yourself and company in five years. Find leaders and organizations you admire and put them up on a mood board. Write the kinds of articles people (Inc Magazine and your alma mater) will be writing about you five or ten years from now. What kind of business are you? What kind of leader.
    2. Decide (and think very carefully about) who will you partner with, how will you split the pie and the minimum amount of outside capital you need (not want, but need) to really push the idea to a true test. A big part of this is a ruthlessly honest assessment of who you are, what you are good at...and where you need to grow. You will (or may) need people that complement your strengths and weaknesses.
    3. Define how long you will try. When you will pivot. And when and why you will walk away. Having an idea of 'stages' and an end gives you the pressure needed to push. Trying your best...and working hard is never a failure. At a minimum you have learned something and tested yourself. And can hold you head high even if you never become Microsoft. There is honor in giving our all.
    4. Define what industry will you focus on - and the handful of best ideas you will test. Often the niche you choose is a lot more important than the initial, specific idea. The idea will likely change...but the time invested in mastering the industry may not be 'refundable.' Find an industry and segment you can have passion for, for a decade.
    5. Find and build out a mentor and advisor network that makes sense for you, your goals and life stage...and business segment.
    6. Decide to have fun in the effort. If you can't, why bother?

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    Replies
    1. Tom, thanks for the feedback. You are probably right, and your points are well taken, in terms of the total population of entrepreneurs. In this particular article, I was trying to focus on moving from "good to great," as I mentioned in the article.

      Looks like there in room for a couple of other articles, on getting from zero to good. :-)

      Thanks,
      Marty

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