The first stage in a company's birth and evolution happens when an entrepreneur (or two or three) come up with an idea, have a model in mind, and take the first steps to start a company. It is a very tenuous time for a company and many people are tested as to whether they have the money, belief, and resiliency to start the business and keep it growing.
We had a chance to see this in person recently as we talked with three entrepreneurs in the pharmaceutical field who are creating a new company looking at how to bring new chemical compounds to the marketplace. They asked to talk with us to share what they were doing. It was exciting to see the passion and expertise they were bringing to their new idea. However, they were experiencing growing pains and were interested to hear what we might have that could help them.
For our entrepreneurs, birth had occurred about a year ago when they came together to form their new venture. As we talked, our entrepreneurs shared that they were at an infancy stage, trying to figure out the two or three strategic steps they were going to make.
It’s a challenging time often made more difficult by the demands of an initial customer. Typically, a client will love what you're doing and where you’re going, but they usually have an additional requirement, because the prototype as it currently exists does not meet their exact needs. So the client asks, “Can you make this change for us?"
This creates a dilemma for many entrepreneurs. Do you pursue the vision you originally had, or do you move to meet the needs of a first client? Changing the vision is tempting, because you're hungry for your first client, your first revenue, and to get on your feet.
Developing an agreed-upon vision
In his book The E-Myth Revisited, author Michael Gerber teaches that a key focus at this stage in the development of the new venture is to have a clear “primary aim.” This is a meaningful vision that you write down and which represents the highest agreement among all the people involved in the new venture. It's where you and the founders of the organization declare who you are, what you're up to, and why it matters. This is your vision statement.
Next you need to identify your “strategic objectives.” These are the two or three key strategies that form your operating system, so it’s important to record and memorialize them. By doing so, you can come back to them on a regular basis to see if you're on track. This allows you to assess if those two or three strategic pillars are working, or if you need to make some adjustments.
This stage is also the time to set a code of conduct that outlines your agreed-upon values and the behavior you expect from one another. The code of conduct establishes the rules for getting along and sets the guidelines for what is right and wrong—what is inbounds and what is out of bounds.
Interestingly, as strong as our pharmaceutical entrepreneurs were on the science of their new business, they had not spent as much time addressing some of these fundamentals for building a strong foundational culture.
Without a clear foundation in place, the pressures and politics that inevitably crop up among investors, founders, and the work that needs to be done start to rear their heads. As tensions rise, you want cooperation—but that only happens when there is clear alignment and agreement.
Without clear agreements, it's easy for the person with the business point of view to say, “Good science is great but if you can't monetize it, what does it matter?” At the same time the person with the science point of view might argue, “The chemistry needs to be solid. If we don't get that right, there won't be anything to sell.”
In the case of our entrepreneurs, there was a third point of view. This person could see the importance of the business perspective but also recognized that strong financials could only happen if the chemical product could be positioned in a way that pharmaceutical companies could see as a viable investment.
The key in founding a successful business is to make sure that diverse groups see the value in one another. Enterprises that work well are made up of different departments that understand and respect one another’s unique strengths.
If people are not feeling safe, valued, or useful, they won’t bring their best to work. When this happens, conflicts can escalate and interpersonal issues can get in the way of a young company surviving.
Where are you on your entrepreneurial journey?
In his book Good to Great Jim Collins says that good leadership trumps everything. And while great science is incredibly important to success, if it's not combined with good teamwork and good leadership, the good science is never going to get out of the starting block.
That's why it's so important to engage in dialogue. For entrepreneurs looking at how they can improve the effectiveness of their own teams, here are a few thoughts to consider:
- Identify where you are in the life cycle of your business. What do you need in terms of direction and support at this stage of development? What are your next steps? What are your potential dangers?
- Have you taken the time to step back from the business and evaluate the processes that help things run smoothly? Many entrepreneurs get trapped on working “in” the business and not spending very much time “on” the business. Who is playing the manager role on your team?
- Finally, are you engaging in regular conversations? To what degree is there synergy and agreement among team members? Take the time to reflect on your primary aim and strategic objectives—including your vision, values, and strategy.
For our group of entrepreneurs, it was engaging and enlightening to see that there is a framework that guides human behavior and organizational development. They could see how they had fallen into some of the traps of blaming and judging rather than looking at how they could build on their differences. They also realized that with clarity they could move the organization more quickly through the stages of development.
Where is your company in its development? How would you assess the quality of the conversations taking place in your organization? Don’t leave your company’s success to chance. Take purposeful steps to guide your organization to its full potential.
—Scott Blanchard is the cofounder of Blanchard Certified, a new cloud-based leadership development resource and experience. Ken Blanchard is the best-selling co-author of The One Minute Manager and 50 other books on leadership. You can follow Ken Blanchard on Twitter @KenBlanchard or @LeaderChat and also via the HowWeLead and LeaderChat blogs.
[Image: Flickr user M D]