#1 Reason Entrepreneurs Fail (And What to Do About It)
Like most of us, I’ve been consumed by what has been going on with the Qaddafi regime. Libya is the latest Middle Eastern authoritarian state to be struggling and possibly collapsing.
This is no surprise. Authoritarian states tend not to last.
The authoritarian model, where a few people control the fait of many, only lasts when it operates in their people’s best interest.
But usually it doesn’t and the leader becomes disconnected over time. Eventually this disconnection leads to breakdowns with the people it was ostensibly designed to serve.
Just look at what Maummar Muhammad al-Qadaffi now has to deal with.
In business, this is no different.
The more disconnected the decision makers are, the more likely business breakdowns and possibly failures. Some well-publicized and extreme examples are Bernarld L. Madoff Investment Securities, Countrywide Financial, and the American Insurance Group (AIG), among many others.
Don’t think for a second this “disconnection” can’t happen to you. Most likely it already has!
Disconnection can take the form of being in touch with the market you are in, the technology you use, products or services you sell, businesses you compete with, employees and communities you work with and so on.
To be disconnected from any of these at any time is not good for you or your company.
To be disconnected comes from one thing and is the #1 reason entrepreneurs fail:
Your ego drives you to do what you do. Many entrepreneurs tell me, “My product/service is the best in our industry.” Really? When was the last time you checked to see what your competitors are doing? Or whether your market or technology has changed and made what you do either #2 or possibly even obsolete?
I cannot tell you how many entrepreneurs tell me crap like that.
We all have an ego that drives us. That is a good thing and also a challenge for most of us.
Being an entrepreneur is very competitive and without an ego driving you, your chances of success decrease. But when your ego takes over is when you can get bit in the &*@$.
For entrepreneurs, ego dominance can show up in many ways. If your company is struggling right now, it is most likely the manifestation of your ego somehow getting in the way.
Ego-driven thoughts can range from, “I have been doing this for many years, I don’t need an outsider [younger person, employee…] telling me how to do things”, to “my company has nothing to do with the environment, so I don’t need to bother” or anything in between.
When your ego has taken over, ask yourself how up-to-date you are on:
- your industry
- your competition
- your competitive advantage
- technology that impacts your business
- engaging your team
- your community and other stakeholders
- your company’s responsibility towards the environment
How you answer these questions is a direct function of how connected you are to the things that make a business thrive in today’s world.
And if you’re like most entrepreneurs, you probably could use some improvement on being connected with these issues.
But it is simple to get reconnected by going back to the basics:
1) Your company’s vision—what are you committed to making happen that inspires everyone around you.
2) Core target market—that customer that generates 80% of your sales.
3) What you really sell—what your product or service makes your customer feel about themselves, their business, etc.
4) Don’t go it alone—engage your stakeholders: employees, customers, communities, investors, and vendors.
I suspect the authoritarian regimes of the Middle East could benefit from using these four principles in getting reconnected with their people. Of course that might mean they would have to let go of the reins, but that might be a good thing for them.
At least they would get back control from their egos.
Action Steps for the Week:
What are you not letting go of that is not going the way you want it?
Get clear on what the core issue around that topic is. Then do the following:
- Let go of what the outcome “needs” to be.
- Open yourself to possibilities beyond what you think what should be.
- Involve your stakeholders in solutions—make it their idea.
- Revisit, recreate or revamp your company’s vision.
- Rebuild your strategy using your stakeholders.
- Leverage your stakeholders in implementing your new strategy.
When your ego steps in, as it most certainly will, say to yourself, “Ego, thanks for sharing and now I have work to do.”
And then get to work!