Many successful leaders in the corporate world fail in startups. Why does this happen? Are there any additional traits of leadership that are required to be successful in a startup environment?
Having worked with a few startups, I have learnt a few things. I am sharing some of those things which can be of some help to people who plan to launch a start up.
The first and foremost leadership trait that is applicable to startup scenario is all about finding a problem to be solved. This should be a considerable problem being faced by the target group of customers. If there is no problem to be solved, there is no business to be done. This is then linked to the personal reason for solving the problem. Why this problem and Why me? This is bigger WHY to be answered by the entrepreneur. This leads to a compelling vision which paints a future status where the problem has been considerably reduced. This typically does not happen in a corporate scenario. Unless the leader feels very strongly about solving the problem, he won’t be successful as an entrepreneur.
The next thing is to find a solution for the problem. Unlike in a company where the leader has access to a well qualified team of subordinates, an entrepreneur usually figures this out by himself. This requires problem solving skills at a very different level, in the field and on the ground. Most of the senior managers grow in their career at the cost of distancing themselves from the field operations. This is the challenge for them when they become entrepreneurs. Entrepreneurs do not hesitate to ask for help. They are not afraid of failure and hence are willing to experiment. This is very much against the typical ethos of corporate management where failure is frowned upon.
Leaders are good at formulating and communicating the vision, which paints the big picture of success. Because this vision indicates great future possibilities, people are excited. People don’t follow leaders. They follow the path to achieve that vision. This won’t happen unless the previous two steps are effectively taken care of.
Startups are not well oiled corporate machines which will start functioning easily. The entrepreneur has to push them hard, every day and constantly. It is like riding a bicycle where we have to do everything. There are no well defined processes. Whatever needs to be done has to be done by the people available. This warrants a different type of leadership. People who have challenges delegating work may prove to be great entrepreneurs as they strongly believe that only they can do a good job.
There are no departments in a startup. In companies the leadership roles are assumed by hierarchy. Even when people have the leadership abilities, they rarely display them because it is assumed that leadership is associated with the position. But in a startup, there are no well defined roles and boundaries. Everyone must do whatever it takes to get the things going. Akio Morita, founder of Sony, explains in his great book “Made in Japan” his experience of unloading a batch of goods in the early days. You can’t say that you are the CEO and can’t unload the goods. A typical corporate leader works only within the defined boundaries and these boundaries become constraints to perform in a startup.
An entrepreneur always stays positive. This comes from his strong belief that the problem he is tackling is really important and worth solving. That drives the commitment to stay the distance. The larger the problem is, the powerful the vision and the stronger the commitment. He must support the seniors and mentor the juniors.
Leadership is to keep the team moving towards the goal and not to let it weaver. This can happen very frequently as the company starts finding new economic opportunities in the market which are different from its mission. This is very difficult to ignore as all the startups would be suffering cash crunch. This is where a successful leader does not allow the team to digress from the original goal and objective.
Leaders keep the integrity of the value system which builds the company culture. Without that bedrock of values it is very difficult to build a lasting business. History is full of great companies which collapsed overnight because they have lost sight of their value system.
Often neglected trait of a leader is physical fitness. A Startup demands long hours and if the body is not in good shape to deliver that work, things won’t happen. The mind also fails to think smartly in a weak body.
Entrepreneurs learn fast, by failing forward and failing fast. This is where a seasoned manager may struggle as it is often very difficult for him to function without a standardized process. This is linked to the amount of risk assumed. Risk management starts with the premise that things would go wrong and tries to mitigate the impact.
These are some of the new leadership traits an entrepreneur should have to succeed.