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Do Entrepreneurs Destroy Businesses?

Entrepreneurs are calculated risk takers, but do they have the right skills to manage a sustainable business?
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We were recently in a discussion with entrepreneurs who had all built growing businesses from the ground up. As their businesses reached some level of maturity, the CEOs had delegated most of the day-to-day priorities to various team members.

As a result, they were now dependent on others to replicate their previous levels of success. And each of them was experiencing similar struggles with this transition. Here's what we heard:

I'm not sure I can count on my team to produce growth. They just don't seem to be doing the same things I did to grow the business. 

I'd like to give up the CEO role and be more of a Chief Vision Officer.

I'm bored. I feel the need to move away from the core business and start something new.

The conversations provided us with four interesting insights about the entrepreneur personality.

1. People do what they are good at.

Entrepreneurs are good at building a business from nothing and creating sustainability.  They are scrappy, cost conscious, and thrive in an unstructured environment. They enjoy the challenge of going against the odds. It's next to impossible to take that entrepreneurial drive out of an entrepreneur.

2. Growing a business is different than managing an organization.

Once an entrepreneur builds a sustainable business, she must build an organization to take on many of the roles that she once handled herself. At a larger scale, there isn't much choice but to add people who can specialize in certain roles. Unfortunately, for most entrepreneurs, the organization they build needs to be managed, and that management takes most entrepreneurs out of their element.

3. Entrepreneurs are focused on "do or die" growth.

Entrepreneurs are at their best when they have their backs against the wall and must grow the business to keep it afloat. Prioritization and organization is not as important when all business is good business and new customers are necessary to sustain the organization.  Entrepreneurs are skilled at grabbing the organization by the neck and forcing it to grow.

4. Sustainable businesses need sustainable growth.

Once entrepreneurs are successful at creating sustainable business, they find themselves in a different world. Once a business is profitable and sustainable, it needs to shift from "do or die growth" to sustainable growth. It's better for a larger organization to grow slowly and steadily than to grow too fast and risk potential disaster. Classic entrepreneurs only move at full speed.

Do entrepreneurs run the risk of driving a sustainable business into the ground? The interesting question is whether the entrepreneurs we talked with will continue to run their organizations at full throttle and risk driving them into the ground. Will their focus shift to the next big thing, while their core businesses flounder? Will they drive their organizations to focus on fast growth over smart growth? And, will they be able to manage a larger organization with a different skill set than the entrepreneurial team that started the company?

Time will tell, but in our view, the most successful entrepreneurs will build a team that can continue to grow their company in the next growth horizon.

What are your thoughts on the successful traits of entrepreneurs?  Share your thoughts with us at karlandbill@avondalestrategicpartners.com.

Last updated: Dec 27, 2012

KARL STARK AND BILL STEWART | Columnist | Co-founders, Avondale

Karl Stark and Bill Stewart are managing directors and co-founders of Avondale, a strategic advisory firm focused on growing companies. Avondale, based in Chicago, is a high-growth company itself and is a two-time Inc. 500 honoree.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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