When It's Time to Take the Back Seat
We're fascinated by the power of entrepreneurship. An individual entrepreneur, or an intrapreneur within a larger organization, is essential to jumpstarting business growth. An entrepreneur can take a start-up, a collection of products or services, or a fledgling team and create a growing business. We like to say that entrepreneurs create growth by grabbing the business by the neck and forcing it to grow.
But once the business reaches a critical level of sustainability, an entrepreneur can also become an inhibitor to growth. Entrepreneurs that have the foresight to step away from the business and redirect their efforts when the time is right can make sure that their business's early growth is sustainable.
Growth leadership is different than "grab by the neck" entrepreneurship, and can be more effective at growing an established business.
We mean "stepping away" figuratively. Instead of physically leaving the company, entrepreneurs who distance themselves emotionally and psychologically can have a wonderfully positive effect. This works best as a gradual process of handing over growth responsibilities to the next generation of leaders and positioning them to succeed at a different game.
Here are three things to remember as you build your business from an entrepreneurial "survivor" to a growth engine:
1. Delink your ego from the business.
Just as family businesses can be inhibited by prioritizing family harmony over business growth, entrepreneurial businesses can be inhibited by prioritizing the needs of the entrepreneurial CEO over the needs of the business. The first step is to stop thinking about your own reputation and happiness as tied to the business. Be willing to let the business live or die, shrink or grow, and focus or expand based on financial and strategic decisions, rather than your own biases.
2. Take a long vacation.
Test the business's independence by taking yourself off the grid for at least two months. Allow the business to adapt to your absence. One successful entrepreneur recently told us, "I knew I could pass the business to the next generation of leaders when I went to Arizona for two months. When I came back, the business had grown faster than when I was there, and they weren't happy to see me return."
3. Build it to sell.
You may not have a personal goal to sell your company, but to best position the business for growth, you must make it attractive to an outside party. If you refuse to consider a future sale, you will inherently guide the business toward your personal goals rather than the goals of the business. Building a business that's attractive to an outside party is, by definition, increasing its value. When an entrepreneur is open to this outcome, he or she will prioritize decisions that result in a bigger and more valuable business.
One of the most valuable things you can do for your business is to be willing to walk away. If you have grown the business sustainability, make a resolution to create your "walk away" plan this year. That will increase your chances of becoming a valuable CEO for the business for years to come.
Have you considered walking away from the business you built? Send us your thoughts and questions. We can be reached at email@example.com.
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.