The book E-Myth Revisited discusses the misconception of the entrepreneurial venture. The true entrepreneur has an idea and brings it to market in a well-structured, profitable venture.
For many start-ups, a subject matter expert decides they can build a business on their own. In truth, they have simply created their own job making themselves their own boss. They usually lack any plans for marketing, believe they can do their own sales while also completing the work required to get paid. They have little thought about when employees may be required and often begin a roller coaster ride of prospect, sell, produce, languish and the ride begins again. Each step is linear requiring the full attention of the owner until the next step can begin. When the production ends, they have to go find the next victim, er, customer. It becomes a vicious cycle.
Leadership recognizes the need for multiple functions, each simultaneously performing so a consistent rhythm of production is possible. When product or service resources are available, a customer is waiting to purchase the resulting solution to their needs. To build an organization of any size, the initial productive cycles may be accomplished by just a few or even one person, but the need for all functions performing at once is recognized. If the owner has the desire to remain the subject matter expert and “produce”, they need assistance in the other areas.
Ultimately, the leader of a scalable entity sets the Vision, Mission, Goals, and Objectives for the organization. The size of the organization is not so important as long as it is a properly functioning organization so that it can grow as it continues to produce. Leadership makes sure the Vision casting and communication occurs. All parties involved must understand the purpose of the organization as well as their own purpose within the organization. Each department and individual focuses their efforts in meeting their goals in fulfilling the Vision; creating a healthy and whole entity.
The benefits of strong leadership are often overlooked as the owner believes everyone sees the effort as he/she does. Conversely, the inexperienced owner may have no clue as to what it takes to run the organization and tries to grow with important pieces missing. This cripples the organization and limits its ability to grow beyond a certain size. Inefficiencies and chaos are the result and the business implodes. Not a pleasant experience. The defeat is often blamed on others who did not understand the efforts of the owner when in reality, the owner did not fulfill an important function as leader. For instance, the owner may complain he could never find competent employees, when in reality he never created an HR function to manage the employee hiring and management appropriately. She may blame the failure on difficult customers when an improper sales and marketing function failed to fully understand the customers’ needs. It may be the sales department is blamed when market research was never performed to understand what the market required.
No matter what the business brings to market, leadership must first create a vision for the company and ensure all of the appropriate functions are carried out by her team to support the vision. If any foundational element is missed, the chance for success is diminished.