I was speaking with a good friend recently about an entrepreneurial project he's been working on for several years. He's incredibly passionate about it but he can't seem to get it off the ground. I listened patiently as he talked about the many ideas he has to help move it along incrementally. Then I asked him a simple question; "where do you want to go with this?"
You'd think that after years of trying to make it work he'd have an instant answer. He didn't. His response was, "That's a really good question." After decades of working with hundreds of startups I've found that his response isn't as odd or as unusual as it might seem.
Where are you going?
I've spent much of my career meeting with, consulting to, and coaching founders. When I first meet with the founder of a startup I always ask them that same question, "So, where are you going with this?" Surprisingly, few have an answer that goes beyond the colloquial response that they want to create value. But will that value come from creating a lifestyle business, selling the business, an IPO, or is it about serving some greater social purpose?
Not answering the question of where you're business is going, clearly and definitively, creates ambiguity and risk. One thing I've noticed, that's common to every great organization, is that no matter who you ask that question of you'll get the same answer. If you don't answer it as a leader there's not a chance that your team will be able to answer it.
Establishing the trajectory of an organization in explicit terms is one of the fundamental responsibilities of a leader. Humans are wired to focus on predicting the future. The economist Frank Knight, who focused his work on uncertainty, even went so far as to say that, "The role of consciousness is to give the organism knowledge of the future." When the view towards the horizon is murky, obscured, or just plain obtuse we get anxious and begin to doubt our ability to navigate the uncertainty. Trust is eroded and alignment around strategies becomes nearly impossible.
As a leader, people look to you to minimize uncertainty by charting a course to a definite destination. In fact, I'd co-opt Knight's quote to read, "The role of leadership is to give their organization, and its people, a knowledge of the future." Great leaders are those who set that destination and then constantly reinforce the path to it and the rewards of getting there. That assurance helps to align your team and to motivate them
So, why is it that many founders fail to do this? In my experience there are two reasons; they're afraid to commit to a destination or they simply don't realize how important it is for their people to have this stated explicitly.
I often draw an analogy between CEOs who fail to be definitive about their company's destination and a recent graduate writing his or her resume. The graduate is typically unsure of where they want to end up and they don't want to pigeonhole themselves by being overly specific in their resume. A CEO who doesn't take responsibility for clearly detailing his or her organization's trajectory is doing much the same by being non-committal or simply neglectful.
There are two significant risks that this creates. First, you are taking away your team's ability to make decisions that are aligned with a specific direction. Second, you will confuse team members who will not understand why decisions are being made that seem to be contrary to the company's well-being. For example, I regularly see this in companies that are clearly a life-style company for the owner but which also espouse the benefit of some sort of long-term equity participation through phantom stock options or stock appreciation rights. There's nothing at all wrong with a life-style company as long as the owners are clear about that choice.
If any of this is ringing familiar chords stop and take a close look at the impact your lack of communicating an definitive direction may be having on your team and organization. Start by asking different team members if they know where the organization is going. Not getting consistent answers is a sure indication that you need to take action. The good news is that it's something that can be easily corrected. And right now, as the year is starting, is probably the best time to sit down and define your organization's direction and the best time to articulate and start to reinforce it.
If you're already doing this, then congratulations; keep reinforcing it at every opportunity and reminding people of what that destination means to them personally. You'll know you've succeeded when everyone in the organization has the answer to the simple question, "Where do we want to go with this?"