Regardless of how great your product, service, or idea might be, you're not immune to failure. In fact, U.S. statistics show that 50% of new businesses fail in their first year. However, if you're fully prepared as an entrepreneur, the road to success doesn't have to be difficult.
I asked Harry M. Jansen Kraemer Jr. to give his opinion on the matter. Harry is the author of Becoming the Best: Build a World-Class Organization through Values-Based Leadership and the best-selling From Values to Action: The Four Principles of Values-Based Leadership. Here is his take on the most important thing entrepreneurs fail to do:
For most entrepreneurs, it's all about the "idea"--a concept that takes root to become the seed of a startup. At the very beginning of a startup's life, that idea--the concept, technology, app, or other marketplace proposition is the be-all and end-all.
As the entrepreneur begins to brainstorm the idea, however, the go-to-market proposition shouldn't be the only thing on the whiteboard. Even more important to identify and define are the values of the organization--even if this nascent "enterprise" consists of only two or three people. A startup that is grounded in values-based leadership will create the kind of alignment from the beginning that increases its chances of success.
Harry has practiced values-based leadership throughout his career, from early days in a cubicle through his tenure as CEO of Baxter International, a $12 billion health care company, and now as a professor at Northwestern University's Kellogg School of Management. Values-based leadership, Harry says, begins with the individual, regardless of title or position, and a commitment to become one's "best self" by putting four principles into practice:
The first principle is self-reflection, an ongoing practice that increases self-awareness and aligns a person's actions with his/her values. The second is balance, seeking different opinions and perspectives in order to make the best decisions. True self-confidence is the third principle, acknowledging one's skills, expertise, and accomplishments (as well as weaknesses). Genuine humility, the fourth principle, keeps the ego in check and shows respect to everyone.
When an entrepreneur becomes her best self, the emphasis is always on values. She knows what she stands for and the mission of the company she envisions. Too often, however, entrepreneurs are so focused on their ideas that they don't take time to identify their values. Without this awareness, the startup won't have a firm foundation.
Successful entrepreneurs who take a values-based approach start with self-reflection to identify their values and put them in writing. They reflect on what matters most and the standards they will never compromise. As they recruit and hire others for their teams, they continuously communicate these values, which become the core of the organization.
When the team is small, fit is crucial. If one person is not aligned with the values or the culture, the negative impact is exponential. Therefore, it is the leader's job to strive for the best fit possible when it comes to making hires.
A startup rises or falls on the strength of its people. Consider the example of , founded by Jai Shekhawat in 1999, which offers a vendor management system for the procurement of contract labor and services. Fieldglass, which was sold to SAP in mid-2014 reportedly for more than $1 billion, started with a small team chosen on the basis of the "whole person"--people who had the right attitude, a passion for the business, and a willingness to do the work that needs to get done. Shekhawat credits a values-based model he described as servant leadership and "subordination of ego." The leader serves the team, and together they devote themselves to service of the customers.
From the initial phase through its first years of growth, a company will experience changes: Some people will move up, some will move on, and others will come onboard. In these growth phases, values alignment must continue to be the No. 1 priority. As Shekhawat said, "Everyone needs to contribute to the DNA of the firm... A person who is contributing and feels that they've helped shape the company will treat it like their child. These are the roots of loyalty."
Creative ideas abound. Some will stay on the drawing board; others will become startups. The difference between success and failure is not the viability of the business alone. Values matter, guiding the entrepreneurial path.
Now it's your turn. What are your core values? How much work have you as a leader put into establishing and communicating values? What do you think is the most important thing that entrepreneurs forget to do? Let me know your thoughts in the comments section below.