Why strong leadership could be the key to your business breakthrough
Ninety percent of startups fail. It’s an unfortunate statistic that entrepreneurs hear far too often from investors, concerned family members, and even their business mentors. But equally as important as recognising this fact is understanding the reason behind it. Why is it that 9 in 10 new businesses don’t survive?
In one notable study, former founders were asked to cite the reason why their startups failed. The most common answers were a lack of market need, a shortage of cash, and a weak team. This illuminates a central challenge for modern entrepreneurs: the need to balance both operations and leadership roles.
Today’s successful entrepreneurs are more than risk-takers with a novel idea; they’re also well-rounded leaders who take a fundamental role in building their team. Implement these leadership skills to position your venture, and your team, for success in the age of disruption:
Define your vision and culture
Where is your company today, and where do you want it to be 1 year, 5 years or 10 years from now? As a leader, it’s crucial to have a clear, consistent vision for your organisation’s future. Once you set your vision, share it with your team. Hold a weekly or monthly staff meeting to reinforce your company’s purpose and trajectory, and encourage your employees to contribute to the conversation. With a consistent vision in place, your team will be better equipped to respond to changes, challenges or periods of rapid growth—all of which are inevitable as you grow your business.
A clear vision helps position your company for the future and also fosters a positive, inclusive workplace culture. Remind your team members of the company’s bigger purpose and their role in achieving this goal. Share ideas, problems and solutions openly with your team so that they’re encouraged to do the same. This transparency, coupled with your vision statement, will help ensure all team members are working toward a common goal.
Delegate, delegate, delegate
In one study, roughly 50% of companies were concerned about their teams’ delegation skills. This standard corporate issue also applies squarely to your startup. For entrepreneurs, it might feel like second nature to try to do everything, especially if you’re running a lean organisation. Resist the urge. Identify your strongest skills, and then build a team whose skills fill in the crucial gaps. When you delegate works efficiently, you will give your employees a sense of ownership in their work and will free yourself to tackle the tasks that matter most: growing your business and leading your team.
Set smarter goals
Goals tend to get a bad rap. But then again, many goals are simply too vague to ever move the needle. That’s just one reason why business innovators are embracing SMART goals—goals that are Specific, Measurable, Achievable, Relevant and Time-Bound. According to this methodology, if your goal is to “increase sales,” answer these questions: When is the deadline for achieving this goal? By what percent or dollar figure must sales increase? And which metrics will we use to measure our progress?
Once you’ve set your SMART goal, share it with your team and clearly articulate how each department can contribute to it in a meaningful way. Track your progress together and create a recognition or reward to commemorate the moment you cross the finish line. When you view goals the SMART way, they can boost both your business and your team morale.
Communication is arguably one of the most essential tools for success in any endeavour, business or otherwise. As a leader, solid communication skills will do wonders for your business: strengthening your team, enhancing efficiency and minimising costly misunderstandings or errors. Poor communication, on the other hand, can lead to employee disengagement, which costs businesses more than US$370 billion each year. Not surprisingly, companies with engaged employees outperform their competitors by 20%.
Successful entrepreneurs develop a well-rounded communication approach that reflects these core elements:
Uncertainty hides behind big words and ambiguous messages. Ditch the jargon. Speak naturally. Be understood.
Commit to staying in touch with your team. Communication is the epicentre that keeps teams and companies moving forward in the same direction. If your teams work remotely, it’s easy to let communication slide. However, a variety of apps and tools can ease the remote communication process, so everyone is always on the same page.
Sharing information draws trust and loyalty from your team. Timing is always important when sharing sensitive information, but sharing it is key to helping every member feel invested in your company and mission.
Cultivate other leaders
Effective leaders cultivate other leaders within their organisation. Whether through leading by example or direct mentorship, invest time in helping your internal talent succeed. Encourage growth and leadership development at all levels of the company. Empower people to make, and take ownership of, key decisions. Compliment team members on a job well done and show them daily what leadership looks like. By cultivating the talent of your team, you will foster a better workplace morale and align your leadership with the business’ strategic priorities.
Every entrepreneur makes mistakes. The true value in these failures, though, is the ability to assess them, recalibrate and turn challenges into learning experiences. Embracing failure has long been an integral part of Silicon Valley’s business culture, spurring risk-taking that every once in a while results in a billion-dollar “unicorn.” However, keep in mind that embracing failure doesn’t mean you should throw all caution to the wind. Instead, determine when it’s the right time to take a risk, and calculate the potential reward and cost of your action. If you fail, use the experience to guide business decisions that do pay off.
Know when (and how) to call it quits
Some businesses just don’t work, no matter how hard you try. It could be due to a poor market fit, insufficient cash flow, or a lack of foresight into the future of your industry. Whatever the reason, sometimes entrepreneurs must set aside their egos, close up shop and begin working on their next, and better, venture. Knowing when to exit the burning building is crucial. Create an exit strategy in advance so that if the worst case scenario strikes, you can adequately pay your debts and dissolve the venture in a way that respects your employees, investors and your company’s legacy.
In the age of disruption, a good idea simply isn’t enough. Today’s business climate demands that entrepreneurs possess a complex set of management, operational and leadership skills. By tapping into these best practices, you’ll be one step closer to landing in the 10% of startups that succeed.