SEVENTY PERCENT of startup businesses fail within the first 10 years, according to a 2013 study conducted by Bradley University and the University of Tennessee. It’s a devastating reality, especially since most of those startups are small businesses, which generate more than half of domestic sales in the U.S.
More often than not, these failures are caused by a lack of solid management abilities. Ironically, the very qualities that inspire most entrepreneurs to take a risk and start a new business can work against them when it comes to actually leading that business day-to-day, because there are inherent differences between entrepreneurs and leaders.
Entrepreneurs are visionaries and innovators, but they may tire when it comes to execution. Entrepreneurs tend to favor the newest strategy instead of a tried-and-true strategy, since they are more comfortable with risk. While they don’t enjoy executing day-to-day tasks, they may struggle in effectively delegating those responsibilities to others as well.
Leaders consistently execute company strategy. They appreciate both the need to hire seasoned managers and the benefits of empowering them to make decisions autonomously. Often, however, leaders lack the entrepreneurial trait of being able to inspire a workforce to drive toward a greater vision, and they may struggle to maintain a culture of innovation.
An entrepreneurial leader is a rare bird. These are the people who inspire us with both their vision and ability to see it through, like Steve Jobs, Sam Walton, Henry Ford and Bill Gates. However, it typically takes a strong, balanced partnership between an entrepreneur and a leader for a startup business to find success.
If a management imbalance occurs, a sales and marketing strategy is not likely to produce a strong return on your investment. If an entrepreneur is solely at the helm, seemingly continuous changes in sales and marketing direction can result in team confusion and spinning of wheels without solid results. When a leader is alone in the driver’s seat, the business may become stagnant, focused too much on the strategies of the past without an eye to future innovation. Neither environment is suitable for sustainable growth.
Too many businesses fail simply due to a lack of balance between entrepreneurial innovation and leadership. To ensure your business thrives, recognize your natural strengths and truly empower trusted business partners to balance out your management team.
Combining entrepreneurial qualities with steady leadership is the key to long-term success.
