Organizational Strategies to Bypass The Entrepreneur’s Plateau

This is the conclusion of “The Entrepreneur’s Plateau” blog series.  The “Plateau” is the state of a relatively new business (started and run by an entrepreneur) with stable and profitable operations but growth has stalled.  

Key strategies to avoid entering the Plateau, or leaving it behind once there:

• Know the Risk – The critical knowledge is that growth cannot continue in the same way your business grew during the initial startup phase.  If a business does not continue to grow it risks being sidelined and left behind as the market changes.
• Balance Your Leadership Style – The key personal qualities that make an entrepreneur risk a business startup can create leadership issues as the management challenges change with a growing organization.  A larger organization needs leaders who can either balance their own personal instincts with learned behavior or create a team where others provide that balance. 
• Motivate – Entrepreneurs are by definition “self-starters” and as such it can be a baffling concept that other people need external motivators to excel.  The exact same things that energize an entrepreneur – independence, action, challenge – can stymie others.  Giving other people what THEY need to perform should be the challenge for the entrepreneur who wants to avoid stalled growth.
• Communicate – When a business grows beyond “line of sight” management one of the primary challenges to succeed is effective communication.  Delegation of both authority and details becomes necessary in a growing business and the trust required in this effort is not possible unless communication is excellent.
• Plan Ahead – The problems highlighted in this series are predictable and foreseeable.  Constantly assess your situation to identify the points where organizational change will be necessary and plan for them.  When you add people who will be responsible for delegated authority or details of execution, conduct due diligence to ensure you’re putting the right people in those roles and that you know how to manage them.

Clarity regarding self-knowledge on personality traits is a valuable commodity for any entrepreneur.  Using external, objective personality assessments can provide this information for yourself as well as candidates for key managerial positions.  This knowledge also points the way toward management strategies and tactics that will avoid the typical roadblocks to growth.

About “The Entrepreneur’s Plateau:”  This blog series focuses on common challenges encountered by new business initiatives after the initial startup phase. Please add your own insights about entrepreneurial challenges – I welcome your comments!

The Roadblock of Mistrust

This is the fourth in a series of blog entries on “The Entrepreneur’s Plateau.”  The “Plateau” is the state of a relatively new business (started and run by an entrepreneur) with stable and profitable operations but growth has stalled.  

This entry explores why entrepreneurs succumb to mistrust and how this derails growth.

A variety of personal and interpersonal factors can generate mistrust:

• Zero-sum Mentality – Entrepreneurs often succeed because they are aggressive and competitive.  Too often this creates a zero-sum game mentality even within the business where the leader seeks to win at all times at any cost.  Others will quickly learn that collaboration is not valued and they won’t contribute their own ideas or extra energy to the business – this scenario will create mistrust regarding motives among the people involved.
• Fight or Flight – Entrepreneurs have to battle a variety of forces to achieve success so they are usually the type of people who are comfortable dealing with conflict.  Conflict within a business has its uses (it can create a dynamic environment that encourages the best from certain individuals) but it can also be misused.  Conflict becomes a negative when a leader raises their voice or cuts off communication simply to force their own way in a situation.  If team-members can’t trust a leader not to abuse their authority they will move to passive-aggressive behavior and/or look for opportunities elsewhere.
• Communication Challenges – When communication goes wrong mistrust often results.  Entrepreneurial leaders with a strong technical orientation are often less comfortable reading people’s body language, verbal intonation and emotions and may misinterpret peoples’ meaning in any interchange.  A go-it-alone entrepreneur may take that route partly because they truly prefer to work alone – and may seek to minimize communication and interaction with others.  Some people prefer to “start at the end” of any story, others need to begin at step one and work all the way through.  Any of these tendencies can create misunderstanding and it is a short road from misunderstanding to mistrust.
• Risk Disconnects – Entrepreneurs are by their nature risk takers.  It is a rare operation we want everyone to have a strong preference for accepting risk in all their decisions.  When we start mixing more-cautious people into the organization the leader may perceive their caution as a lack of confidence.  The cautious people may become uncomfortable when a leader takes them in new and unproven territory.  These feelings can rapidly degenerate into mistrust unless addressed quickly.

In the early stages of an entrepreneurial endeavor when the number of people is small a leader doesn’t have to rely on trust because they have such direct involvement in all activities.  To leave the Plateau, however, trust is essential.

Next in The Entrepreneur’s Plateau Series:  Organizational Strategies to Bypass the Plateau

About “The Entrepreneur’s Plateau:”  This blog series focuses on common challenges encountered by new business initiatives after the initial startup phase.  Please add your own insights about entrepreneurial challenges – I welcome your comments!

The Limits of “Line-of-Sight” Management

This is the third in a series of blog entries on “The Entrepreneur’s Plateau.”  The “Plateau” is the state of a relatively new business (started and run by an entrepreneur) with stable and profitable operations but growth has stalled.  

This entry explores one of the key growth limiters entrepreneurs face when they find themselves on this “Plateau” – something I call “Line of Sight” management (LOSM – pronounced “Lose ‘em”).  LOSM means the entrepreneurial leader has to see everything that is going on for the business to function.

While I am certainly an advocate for hands-on frontline management this responsibility has to be shared if an entrepreneur wants to maintain growth beyond their own ability to make it happen!  The key principle here is that a leader has to establish boundaries around their own “turf” that also allows for some level of turf ownership for subordinates.

LOSM becomes a losing proposition as soon as a business grows beyond a single location, a single shift or any other factor that prevents hands-on control by the entrepreneur.  If and when your business expands to this point you must lose the LOSM approach and change your management style if you are to succeed.

Next in The Entrepreneur’s Plateau Series:  The Roadblock of Mistrust

About “The Entrepreneur’s Plateau:”  This blog series focuses on common challenges encountered by new business initiatives after the initial startup phase.  Please add your own insights about entrepreneurial challenges – I welcome your comments!

Personal Sources of The Entrepreneur’s Plateau

This is the second in a series of blog entries on “The Entrepreneur’s Plateau.”  The introductory segment defined this “Plateau” as the state of a relatively new business (started and run by an entrepreneur) with stable and profitable operations but growth has stalled. 

This entry explores some common characteristics within the personalities of entrepreneurial leaders that lead businesses to get stuck on the “Plateau.”  This perspective has been gained through my work with dozens of such clients.

The following management challenges that lead to The Entrepreneur’s Plateau often exist because of the personality of the entrepreneurial leader:

• Delegating Authority – Entrepreneurs are often successful exactly because they are “take charge” personalities who thrive on broad authority and high degrees of control.  Given resource limits (e.g. even the most-energetic leader still has only 24 hours in a day) the entrepreneur who cannot relinquish authority and control to others will inevitably hit a limit on their growth.
• Delegating Details – Many entrepreneurs’ success springs from their expertise in a particular area.  When such expertise drives a sense of “perfectionism” a leader can limit their business’ growth by becoming a one-person quality assurance checkpoint/bottleneck.
• Creating Systems – The dynamic, high-energy entrepreneur who relentlessly drives business results through personal intervention in the marketplace often is the same person who can’t be bothered to create a structure that others need to effectively assist in pursuing results.  To expand beyond the “Plateau” a leader has to be able to communicate the parameters of expected contribution, in other words, create a management system that builds on the strengths of a complete team.
• Motivating Others – By definition, entrepreneurs are self-starters.  People like this are motivated by their own internal drive for goals and results.  This is a great personal quality but when one is internally motivated it can prevent understanding that other people need something other than an alarm clock to get them motivated for the day’s work.

Any one of these challenges can result in The Entrepreneur’s Plateau.  As with any dysfunction, awareness of the problem is the first step to correcting it.

Next in The Entrepreneur’s Plateau Series:  The Limits of “Line of Sight” Management

About “The Entrepreneur’s Plateau:”  This blog series focuses on common challenges encountered by new business initiatives after the initial startup phase.  Please add your own insights about entrepreneurial challenges – I welcome your comments!

The Entrepreneur’s Plateau

Too many new businesses fail to maintain early momentum built by the founder’s initial ideas, enthusiasm and enterprise.  Even in the early rush of initiative and energy, common problems such as a cashflow crunch, partnership misunderstanding or competitive pressure can derail an entrepreneur before they really get started. 

Even businesses that survive those early pitfalls which trip up most startups will then find they need to change their managerial game plan if they want to escape “The Entrepreneur’s Plateau” and continue to grow.  The Entrepreneur’s Plateau is a state of business with stable and profitable operations but growth has stalled.

The entrepreneur’s plateau usually takes one of two forms:

1.  The company cannot grow beyond the size which allows the founder to personally stay in control or generate sales.  Typically this can involve an organization of anywhere from 10-30 employees.  The scale depends on the complexity of the business itself.
2. The entrepreneur pushes growth beyond the point which they can personally control things but fails to develop an organizational structure to maintain the higher level of sales.  One or another dysfunction crops up which forces shrinkage back to a manageable level.  This cycle can repeat itself many times.

While some business leaders can survive and even thrive on this plateau, it has inherent dangers even when it generates sufficient profits and activity to satisfy the owner. 

One of the dangers is that a business on a “plateau” lacks the dynamism necessary to stay abreast of current economic trends.  How many times have you encountered a business that is “past its prime” or otherwise exhibits evidence it has gone stale or lost its edge?

Another danger is the risk of boredom inherent in a plateau.  A business that is going nowhere can lose the interest of those involved.  Bored owners, managers and employees make bad owners, managers and employees.

Finally, a plateau is a weak platform from which to pass on a business to the next generation or keep top talent from leaving.  If a business doesn’t generate growth it won’t have the expanding opportunities and resources essential to reward and challenge a new generation of owners or managers.  A business that cannot recruit or retain adequate talent will not survive.

Next in The Entrepreneur’s Plateau Series:  Personal Sources of The Entrepreneur’s Plateau

About “The Entrepreneur’s Plateau:”  This blog series focuses on common challenges encountered by new business initiatives after the initial startup phase. Please add your own insights about entrepreneurial challenges – I welcome your comments!