With a great deal of American manufacturing now taking place elsewhere, economists and politicians are looking for entrepreneurs to relieve the high unemployment rate. In response, many universities have modified their business courses to increase the focus on entrepreneurship. However, these offerings lack one piece of vital content: teaching students that not everyone is cut out to be an entrepreneur.
I suggest that universities teach students that the most aggressively self-confident among them are probably the least likely to succeed as entrepreneurs. Rather, the student most likely to become successful is the one who does not believe he or she knows it all.
I once consulted for an entrepreneur who only hired people who shared his faith, whether they were qualified or not. He discreetly passed the word around church and hired from within his own congregation. This led to a very small pool of potential employees. Eventually, I found myself having to teach the product engineering manager the concept of a bill of material and why part numbers are important.
Universities provide good instruction on risk management, market analysis, sources of expansion capital, and the like, but they lack solid educational offerings on how to hire the right employees. Teaching entrepreneurs to hire properly is vital, particularly because they often don’t easily recognize or appreciate the seriousness of problems. In the early days of a new company, entrepreneurs can personally handle whatever is required. They often feel they do not need new technologies, performance standards, or disciplined procedures. As a result, they earn more profit than their larger competitors and likely grow cocky, thinking they have found a better way.
But, as their companies grow, entrepreneurs realize they cannot do it all alone; they must hire. To assure that nothing changes, they might hire people who will do things just as the founder has done them. A true professional will want to install standards, procedures, and disciplines. But that’s how the competitors operate, so entrepreneurs want no part of that. Key employees become yes-men, not allowed to think for themselves. Growth problems are not addressed, market share is lost, and the once-promising business deteriorates until it folds.
If an entrepreneur does nothing else right, he or she must hire experienced, talented people and be willing to pay the going rate. A good employee will complement the entrepreneur and reign in any idiosyncrasies; a good entrepreneur will allow the experienced worker to do so.
If you are an entrepreneur who has survived the start-up of your company, congratulations—the odds were against you. But know that you cannot grow using the same qualities you applied when starting out. Initial success does not portend future success. It is in the growth stage that your company is most vulnerable because you must share the workload with new people who do not know everything you know.
Respect their experience and expertise, and allow them to change many of the very things that initially made your company a success. It may be difficult to accept, but operating your business along the lines of larger, successful companies probably means you are on the path to success.
Randall Schaefer, CPIM, is an industrial philosopher and independent consultant. He may be contacted at email@example.com.
Do you have an anecdote that teaches, enlightens, or amuses? Consider sharing it with the readers of APICS magazine. Stories should be approximately 700 words. Email submissions to “Lessons Learned” editor Randall Schaefer at firstname.lastname@example.org.