Know your strengths
The biggest barrier to achieving success may just be yourself, writes Chris Ingram.
One of the most dangerous times for company founders is when they are no longer running a small business but are still some distance away from being in charge of a big one.
Suddenly they have to bring in and trust other people. No longer can they promise a client that they will handle or oversee everything themselves. At this stage, it’s commonplace to hear a founder complain, ‘The people we’ve hired aren’t as good as me – they just don’t have the hunger.’ Or: ‘Technically, they can do the job, but they’re not commercial. They don’t realise that however senior they are, they have to sell.’
Unfortunately, entrepreneurs are not naturally strong on systems, processes and delegation, but these skills become more critical if a company is to achieve scale.
Take a step back
The danger is that if you hire too many new people too quickly, you could ruin the culture of your company. If you do judge the hiring process correctly, however, it should give you enough breathing space to see the bigger picture, such as trends in the market and competitor activity.
That said, you mustn’t completely dissociate yourself from operations. Take time to sit in on meetings and listen. Go walkabout in your company and ask lots of questions. If you like the answers, move on; if not, keep drilling down until you get a satisfactory answer. Sometimes when I do this, I find myself walking away thinking ‘Yes, that seemed the right answer but there’s something not quite right’, so I go back to ask more questions.
If what you find is good, always let those concerned and their line managers know. You don’t want to be known as the miserable, moody boss who is always snooping around and highlighting faults. You should also insist on going through the management accounts, including cash flow, in detail with the FD every month before they are issued, regardless of how big the company gets. These meetings should be scheduled ahead and not moved.
Heart and soul
Once a company does start to grow, some entrepreneurs realise they don’t enjoy the day-to-day running of the business like they used to. Too much of their time is spent looking at management reports and dealing with operational issues. They miss being on the front line of the business.
If you find you’re losing your energy and enthusiasm as the business morphs into a larger beast, perhaps it’s time to move over and let someone else take charge. Deep down, you’ll know yourself because you’ll have become a moaner.
There is nothing so damaging to the confidence and morale of a business as when the leader walks around, perpetually moaning. If you ever find, as I have a couple of times, that you’ve changed from being an optimistic entrepreneur to a moaner and a cynic, then it really is time to quit.
I was with three entrepreneurs the other day and I gradually realised that two of them only wanted to talk about the past – the good old days and their glorious successes. It was as if the race was over, but it clearly wasn’t for their businesses. That’s a dangerous place to be.
If you are distracted and cannot focus, then expect the business to suffer. Do you have new interests taking up an increasing amount of your time? Or, as I did, are you pushing the company to diversify because you are always looking for the next big thing? For me, the trouble was that I diversified just as the core business was poised to reap the rewards of our efforts. It was an expensive mistake because valuable time and resources were spent going in the wrong direction.
Despite everything I’ve said here, the fact is that many entrepreneurs are limited by what made them a success in the first place. It’s their nature to be the star performer and dominate, and they cannot change. There is nothing wrong with this but the cost is that such businesses will rarely grow to a significant size, and their value will be lower when it’s time to exit.