Steve McIntosh, Chief Fan Ambassador, Fanhub
Everyone seems to know the ‘secrets’ of entrepreneurship—so why are successful businesses so rare?
Nearly 90 percent of businesses in the U.S. have less than 20 employees, and half of all businesses close within five years. In tech, the stats are especially grim: Henry Blodget, founder of Business Insider, calculated that only 1 in 200 companies that apply to Y Combinator becomes a “success.”
So what’s the difference between a promising business and a predictable failure? Entrepreneurs take note: the difference is communication and collaboration, or “C&C” for short.
No C&C, No Consensus
Unlike goliath corporations with a chain of command as long as the military’s, small-to-midsize businesses (SMBs) have management teams that could fit in a small elevator. However, consensus in the prototypical SMB and enterprise is equally important, and consensus only occurs through C&C.
I like to get my management team and my entire company on the same page, because otherwise, what’s motivating them? If you thought an idea was awful, would you put your heart into making it a reality?
In the enterprise boardroom and SMB elevator, smart leaders ask people to voice their concerns if they disagree with the plan of action. They may have a perspective everyone else missed. When you C&C on a plan, employees feel committed, and it will have a higher likelihood of succeeding.
Repeat and Drive Your Vision
A kindergartner’s lemonade stand has a vision: to supply the passerby with cool, delicious lemonade on a sweltering summer day. Everyone’s familiar with this. Your SMB, however, might offer something the world has never seen. If you don’t communicate your vision, no one will understand it.
Moreover, in a world where markets and strategy change constantly, you must repeat your vision publicly and privately, again and again. Doing so shows employees that you believe in your vision, and conviction is contagious. Also, consider this: if your employees have spent countless, caffeine-fueled hours debating that vision and will spend many more hours carrying it out; they want to know that their leader is committed.
Repeating your vision is one aspect of “driving your business.” The opposite, I suppose, would be getting chauffeured by your business. Drivers listen to customers because sometimes they can prevent a collision, but ultimately the driver sets a path for the business, even if it alienates a few customers. 20 percent of customers will account for 80 percent of your revenue, and 80 percent of your complaints will come from 20 percent of your customers. Although exchanging goods and services is an act of collaboration, you don’t necessarily have to provide what your temper-tantrum 20 percent demand. Take in cues from customers, competitors and the market, distill these inputs into your vision and then repeat this vision often.
Implement and Follow Up
The first two thirds of this article dealt with 5 percent of entrepreneurship—this section deals with the other 95 percent. As a communicative and collaborative leader with a defined, often repeated vision, you still have to execute. And the essence of execution is follow up.
As a leader, you give direction and set expectations according to your vision, but without follow up, they mean nothing. It’s not just about asking, “Did this get done?” Rather, follow up is about asking open ended questions that give you the pulse of what is actually happening in your business. For example:
· When we did X, how did customers react?
· What do you think we could have done differently?
· What are the mission critical things that could affect our launch?
When you meet with employees, partners or vendors, write down on a task list or notepad what you will follow up on when you meet next. Follow up is an act of communication—the fruits of follow up are sustained collaboration, execution and results.
The foundation of consensus building, driving a vision and follow up is communication and collaboration. Remember, as CEO, COO or Chief fill-in-the-blank, you initiate C&C in order to engage your employees. A leader who never C&Cs will never listen to, or learn from team members. A leader who communicates but does not acknowledge and somehow act on the responses will alienate the team members who expected more collaboration.
1 in 200 startups likely fail because 199 in 200 entrepreneurs forgot that the relationships between individuals within an organization must succeed before the relationship between a company and its customers can thrive. Build your business on C&C, or crumble.
About the Author
After finding success at the early age of 17 with his first company World Choice Travel, Steve McIntosh, co-founder of Fanhub, knew he wanted to be an entrepreneur. Regarded as the world leader in private label travel, WCT grew to over 250 employees and 500 million in sales, and was purchased by Travelocity in 2003. With this success under his belt, Steve became a seasoned business leader, software developer, and serial entrepreneur, Steve went on to co-find BeQuick Sotware and later Fanhub, the small business Collaboration Center that combines CRM, ticketing, project tracking and pipeline management all in one cloud-based platform.