Anyone that has ever thought of starting a business has probably heard the often quoted statistic that 9 out of every 10 start-ups fail. While the failure rate may not actually be that high – the actual percentage is often debated – there is always going to be risk when involved in a start-up. The success, or failure, of a new company usually depends on the leadership traits of its upper management. Larry Levy, the CEO of the Levy Organization recently spoke at the Kellogg School of Management at Northwestern University and discussed the traits of a successful entrepreneur. Here are ten traits or behaviors from his lecture that can derail a start-up:
- A focus on the negative – Nothing discourages employees faster than a bosses failure to acknowledge success and instead focusing on what has not yet been accomplished.
- An aversion to change – Young start-ups are more prone to rapid change than large corporations. Often, in order to become competitive start-ups have to continually adjust strategies. Entrepreneurs are entrepreneurs because they want to be free to create but this same desire can often lead to entrepreneurs to resist any change that may interfere with their vision.
- An Unwillingness to take risks – Just as an entrepreneur has to be able to make rapid changes in order to stay competitive they also need to jump on opportunity when it presents itself. This involves risk and any hesitancy can cost a start-up profits.
- An unclear vision of your business – Good ideas can often be derailed if the business does not have a clear idea of the necessary steps to achieve its goals.
- Lack of communication/inability to express ideas clearly – Even if an entrepreneur has a clear vision of his/her goals and the steps necessary to achieve them, a business can still stagnate if he/she fails to communicate them clearly to their employees.
- Expect mistakes, don’t be discouraged – Young entrepreneurs are inevitably going to make mistakes. The difference between a success and failure can be an entrepreneurs ability to learn from his/her mistakes and not be too discouraged when they do happen.
- A narrow knowledge base (not knowing what you don’t know) – An important trait of good entrepreneurs is a wide knowledge base. They don’t need to be an expert in everything but they should understand enough to know where they are weak. When an entrepreneur has a narrow knowledge base he/she is less likely to hire people with varied skill sets that may be necessary to the start-up.
- Close mindedness or an unwillingness to listen to others – Even an entrepreneur with a strong and clear vision does not have all the answers. An unwillingness to listen to talented employees can limit a companies opportunities and impede growth.
- A lack of preparation for the ups and downs of entrepreneurship – All start-ups experience obstacles and frustrations. An entrepreneurs ability to stay positive and keep everyone else positive can spur creativity and problem solving.
- A lack of correlation between your business and your passions – If the businesses aims do not line up with the passions of its founder then it is unlikely to persevere through the setbacks and mistakes that inevitably come.
If you are in the process of starting your own company or are thinking about doing so, then you should consider each of these flawed leadership behaviors and make specific plans to avoid them in your interactions with your employees.
Robert Cordray is a freelance writer. After spending 20 years as an entrepreneur and business consultant, he’s dedicated his life to writing about life, business, and everything in between. You will most likely enjoying time on the beach with his family.