Entrepreneurs are often incurable optimists. But if your optimism is clouding your vision, small problems can turn into business-threatening issues.
A key attribute of the successful entrepreneur is optimism: a fundamental belief that a business will succeed and the confidence to push through obstacles. Most of the entrepreneurs we know are supremely optimistic about their business and confident in their abilities.
However, Scott Shane, professor of entrepreneurial studies at Case Western Reserve University, notes that less than 50% of start-ups survive their first five years, and only one in three survive their first 10 years. Daunting odds for the would-be entrepreneur! Without optimism and self-confidence, the entrepreneur might reach Joshua's logical conclusion in WarGames: The only way to win is not to play.
So let's take it as a given that you are an optimistic, self-confident entrepreneur and that those attributes are foundational to your current and future success. How can you guard against rose-colored glasses syndrome?
In the Avondale Dictionary of Modern Entrepreneurism we find the following definition:
Rose-Colored Glasses Syndrome (n.): A level of entrepreneurial optimism and self-confidence that ignores/minimizes the reality on the ground and allows small problems to become business-threatening issues.
Two key points here:
Do not let your optimism blind you to what is happening in your business.
You should be actively seeking the facts that contradict your sunny view:
Talk with your customers regularly: Are they truly satisfied with your products?
Talk with your employees: What are the challenges that stifle their productivity, creativity and entrepreneurism?
Look at your financials: Are you achieving the financial results you set out to create?
Do not allow small problems to threaten your company's existence.
The purpose of seeking those facts is not to make you feel bad; it is to identify the currently moderate issues in your business and address them quickly before they fester.
We often struggle with both of these points. It is too easy for us to get caught up in the million-and-one activities we need to run the business. By not making the time to seek out others' views on the challenges we face, we can live in our happy CEO bubble and be oblivious to the negative undercurrents.
Or we may recognize problems but err by rationalizing, "That issue will work itself out; let's not take quick action on it." Frankly, so many of those problems have come back to bite us in the derriere that it's surprising we have any derriere left!
The point is, entrepreneurs should be optimistic, but that optimism needs to be grounded in reality, not illusion. The best way to remove those rose-colored glasses is to actively work to identify barriers and challenges in your business, and address them quickly before they become real problems.
Are you the incurable optimist in your business? How have you avoided rose-colored glasses syndrome? Please let us know in the comments below or email us at email@example.com.
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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. @karlstark