You are the founder of your business. You have grown it from scratch on your own or with a partner. You have validated that your product can be sold and your business is scaling. You, however, have never led a growing business of this type or scale potential and neither has anyone on your team. You are a smart person and because you have succeeded this far, because you were right about the product, you certainly must be qualified to keep driving the business – right?
A strong level of self-confidence is a trademark of many an entrepreneur. It clearly requires such a personal makeup to take the risks necessary to create a new business from scratch, making others believe in you in the process, and for this founders must be applauded. This same personality trait is however the one thing that ultimately stands in the way of creating truly successful businesses that grow anywhere near their potential.
Just because you were right about a market need and just because you can create and deliver a product or service that solves that need does not automatically qualify you to build a successful business. It simply means you were right about how to solve a problem. The analogy I use regularly is “just because you can engineer and build a car doesn’t qualify you to be the driver.” Designing, building, and driving are very different skills – each requiring unique capability and experience.
Founder-led businesses consistently fail to reach their potential because the founder(s), the one(s) who had the capability to recognize and solve a market problem, failed to recognize their own lack of capability and experience when it came to growing (driving) the business. A highly successful business is about far more than the product or service. It is about marketing, sales, finance, operations, leadership, team building, customer support, business culture, etc. Just as it takes a highly skilled engineer to design a quality product, it takes highly skilled people in all of the other business acumens to build a sustainable high-growth business. The most important acumen of all is leadership – someone who understands how to take a great product or service and grow a great business around it. Someone who can build the right team and culture to maximize (drive) success.
The reason many early-stage businesses fail or fail to reach their full potential is simply because the founders became the roadblock. They didn’t accept help because they already knew better. They wouldn’t relinquish operational control because their egos wouldn’t allow it. They didn’t build a proper team or culture because they didn’t understand the importance or know what one looked like.
“Companies with inept leadership usually fail in the first year or two, but even established companies can stumble badly when they outgrow the capabilities of the founding team. As a founder, you need the discipline to know when to hand over the reins to a professional manager who can take your business to the next level” (#1 on the Top Ten Reasons Start-ups Fail www.squidoo.com/starup_failures) Note that the following nine reasons on this list can be mitigated by solving the leadership issue identified in Reason #1.
The sad part of this trend is that it doesn’t have to happen. Our communities could be stronger, our businesses more vital, and our nation more stable if founders would simply be willing to engage applicable leadership at the right time.
Sure, some founders ultimately become great business leaders, but the vast majority build lifestyle-level businesses out of opportunities that were far greater. Thus their businesses never provide the economic vitality and impact that they were capable of contributing to their families, their employee’s families, and their community.
As a long-term client whose business recently grew nearly 3X in two years after turning the leadership of the business over to seasoned industry professionals said “I finally came to understand that I was the roadblock, and when I secured the right talent, got out of the way and focused on my area of technical expertise the company took off.”
The challenge to business founders is understanding the end goal. If that goal is to maximize the success of the business, and a potential exit, they must engage and empower the needed expertise and refrain from standing in their own way.
