The Care And Feeding Of Entrepreneurs

We revere entrepreneurs.  The rest of us would have nowhere to work without them.  There is a catch, however.  One of the reasons that so many promising new businesses fail is that the people who start them are good at creating businesses, but not so good at running them.  Many entrepreneurs seem to believe expertise in one area automatically confers expertise in all.

Don is a mechanical genius.  Nobody knows more about linkages than he does.  In his garage, he developed several prototypes that were simple, cheap, durable and absolutely elegant, as was the process he devised for their manufacture.  He started D2 (For Donald Davis) found his niche, and before long, his company had grown from ten employees to more than a hundred.  Maybe you saw his picture on the cover of several regional business magazines. 

It all seems like the perfect success story, except for one problem.  Don.

Don can’t let go of anything.  It’s not that he’s a control freak; he’s more like a big amiable puppy who’s there all the time, bounding around, getting in everyone’s way. The company is his life, and he wants to be in on everything.   

It used to be Don and two other guys in his garage doing everything.  Now there are departments for Procurement, Marketing, Manufacturing, Sales, Finance and Human Resources, and Don still acts they’re all working together in his garage. He goes everywhere, talks to everybody, and tells them what he thinks they should be doing. Sometimes his ideas are excellent.  It’s just that there are so many of them, and he doesn’t seem to recognize how disruptive a change in procedure can be if it’s not coordinated up and down the line. 

Don’s constant tweaking drives his managers crazy.  However they set things up today could change tomorrow if the boss has a better idea. 

Don is proud of D2’s flexibility and openness to innovation. He doesn’t seem to realize that too much flexibility is indistinguishable from chaos.  

Don creates chaos because he doesn’t understand that managing a company requires a completely different set of skills than creating elegant linkages.

In any business, there are three entities that must be managed, task, money and people.  Managers with training and experience know that you have to manage all three, not just the one you’re best at.  Don, being a consummate engineer, is phenomenal at managing tasks.  Whatever it is, he can figure out how to do it better.  In his mind, that’s all there is to it.  Like most Entrepreneurs, he is oblivious to the parts of management that don’t interest him, which in Don’s case is managing people and money.

The department heads have tried to explain this much management theory to Don, but he doesn’t understand.  His feelings get hurt, then he gets mad.  Regardless of what his managers tell him, he keeps coming back to the idea that if you do tasks in the best way possible the company should prosper.  Don doesn’t change, so everybody else has to.

How his managers react to Don’s intransigence creates even more chaos.  Every one of them has developed an individual style of dealing with Don.  Some managers try to accommodate him, because it’s his company and they don’t want to fight with him or hurt his feelings.  Other more rebellious managers don’t mind hurting Don’s feelings.  They argue with him, or say they’ll do things his way and then don’t.  Other managers play their cards close to their chests.  They hold back information, and when things don’t go well, they point the finger anywhere they can. Pretty soon, everybody is blaming everybody else, and D2 is going down the tubes.

Don thinks the company has problems because his managers are a bunch of squabbling malcontents, which they are.  He doesn’t see that it’s his style that keeps the conflict going.

D2 is about to become one of the many promising startups that self-destruct after a few years. If you ask anybody who works there, they will tell you what the problem is.  They just don’t know what to do about it.

Whatever the managers might tell you, the real issue they’re dealing with is getting an entrepreneur to understand or care about something beyond his own area of interest. Here are some ideas that might help:

Hang Together or Hang Separately — The very first thing the managers have to do is decide that it is in their individual best interests to act in concert.  This should be obvious. Lack of coordination is the problem; only coordination can solve it. The situation is kind of like the Prisoner’s Dilemma, in that cooperation is the best course only if everybody else is cooperating.

To get things started, there has to be a nucleus.  If the three most powerful managers are on board, there’s hope.  If they aren’t convinced, nobody will be.  Convincing people will take time, and some heavy-duty meetings without Don.

The first test of unity is agreeing what to say when Don finds out about the meetings, which he will.  Everyone needs to say, “We aren’t ready to talk about that yet.  When we are, you will be the first to know.”

If you get leaks to Don, which you will, you have to go back to discussing self-interest in the group of managers.  Who benefits if the company runs into the ground?  If someone thinks they might, then he or she will be an obstacle.  If that person is one of the top three managers, obstruction may prove fatal.

Know Your Goal – The goal here is not to stop Don from meddling, which won’t happen, but to adopt decision making rules that keep his meddling from being so disruptive.  The simplest solution in an organization like D2 is to adopt a policy that no changes will be put into effect until they are discussed at regular management team meetings, and a group decision is made as to when and how to implement.  In addition, the group should agree on a chain of command structure such that direction in each department comes for the department head alone.  This will make it safe for employees to tell Don that they have to check with their manager before acting on his suggestions.

Speak the Entrepreneur’s Language – Don is an engineer who hasn’t learned the standard vocabulary of business, so his managers will have to speak his language.  They need to develop a metaphor through which rudimentary organizational theory can be presented in mechanical or mathematical terms that Don can understand and use to communicate with them.  If he can grasp what is going on in the organization, he can use his analytical skills to be part of the solution rather than the source of the problem.

The managers put together a presentation.  The first slide is a diagram of Don’s elegant manufacturing process, which is the very essence of mechanical cooperation.  As the group watches, below each node, a set of dials and levers appears.  They are labeled “specifications”.  The presenter can then show that changes set manually in one node require manual changes in other areas, and ask “what’s wrong with this system?”

Don knows the answer, since the beauty of his manufacturing system is in the sensors at each node that can detect and respond to changes in the other nodes.  He elaborates on how this process works.

In the next slide, the names of the nodes change one by one to Procurement, Marketing, Manufacturing, Sales, Finance and Human Resources, the organizational structure represented as a mechanical process.  The same dials and levers beneath the nodes are used to demonstrate the effects of manual changes.  The striking conclusion is that there is no sensor mechanism through which all the nodes can coordinate.  Since there is no way that electronic sensors can be implanted in the managers brains, verbal communication is required.  The presentation demonstrates that the regular meetings and adhering to chain of command serve similar functions to the sensors in the manufacturing process.

Don, of course, explains how the sensing processes differ, but by doing so he is actually discussing a topic that he was unable or unwilling to talk about before.

It will require work to hammer out the details, but with a common language the work can now be done.

Sign the Constitution – Once the details are implemented, they should be codified into policies and procedures that are the new ground rules for running the business.  Everyone in management should literally sign on.  This is yet another metaphor that will ensure the rules are important and are to be taken seriously.

Obviously, every entrepreneurial organization is different, but if they are to be successful, they must go through a critical stage of development in which day to day authority shifts from the entrepreneur to a management team.

Since so many entrepreneurs fit the pattern I’m describing, that shift will require teaching them something that they have heretofore considered unimportant.  If entrepreneurs are to learn anything from the people who work for them, the lessons must be presented in a language that they understand.

AlBernstein Be safe; be well; be at peace,

Al

Please NOTE:  Albert J. Bernstein PhD is a Clinical Psychologist, Speaker and Business Consultant, and author of Emotional Vampires At Work, which can be purchased here.     He is guest blogging Dr. K’s blog while Dr. K takes a blogging sabbatical.  Dr. K will return in late-July.

 

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