Continuation from Part 1
Management is an entirely different world than being a technician
As I read in one of my favorite books, “The E-Myth Revisited” by Michael Gerber, we all have three personalities within ourselves – a technician, a manager, and an entrepreneur. The technician knows how to do the technical work of the business like baking pies, building websites, or tuning an engine. The manager knows how to monitor and organize the team/projects. The entrepreneur creates a vision and builds the business.
While the technical work is relatively straight forward, the managerial work is much more subjective and soft. Getting an employee to like you is relatively easy but getting an employee to consistently, happily carryout a project and never-endingly work towards the company’s benefit is an entirely different world. There is an infinite number of factors that go into being a good manager and no one is perfect. If I could list a few important factors it would be high integrity, timeliness, great communication, optimism, ability to make decisions despite ambiguity and a good listener. In my brief experience, I found that it was far more important for the team to respect me, than to like me. As long as I clearly communicated to them that my actions were in the best interest of the company and therefore in their job security. I’m pretty sure mastering the art and science of management will be a lifelong endeavor.
Invest back into the company
2010 was a relatively good year for the company financially. In fact the margins were so high that I thought the company was extremely successful. Higher margins are good right? Yes, however what I didn’t realize was that by keeping the margins high, I was taking away from how much better the service could have become. It was an opportunity cost to creating higher customer lifetime value.
With our margins at 30%+ we were creating cash flow; however we could have greatly increased the level of customer satisfaction if we had reinvested another 15%. Had I realized this before, I would’ve kept the margins at a safe enough level to survive and reinvested the rest back into the company instead of letting it sit in the company bank account. That said, when you’re bootstrapping a company it will feel like you need to cling to every penny.
Integrity is everything
For the early part of my life this word has had a purely theoretical meaning. After receiving my black belt in Tae Kwon Do I remember it as one of the Five Tenets (codes of conduct), but even then it was just another check on the list.
Integrity is everything. Both in terms of self-trust and in terms of choosing team members who also operate with high integrity. Integrity on a personal level is being able to trust that you will carry out the things you say in your head. On the smallest level, it’s going to bed on-time and getting up on time. If you can’t actually carry out what you say you want to do, it will continually lower your self-trust. Can you will yourself to go to the gym 3 days a week? Can you quit smoking? Can you eat healthier? Can you trust yourself to do the things you say you will do? It’s a very important question. It might also help to look at it from the perspective of the three brains, as I mentioned in Part 1 about psychology. Remember that if we were completely rational beings, we would go to bed at the ideal time, wake up at the ideal time, eat perfectly, go to the gym 3-4 days a week, work hard at work, cut everything off after work and be super happy all the time. Unfortunately, we aren’t completely rational. We have 3 brains to deal with, not just one. And learning how and when your reptilian/emotional brains are working against you is important. The logical brain knows you should eat broccoli instead of potato chips because you will have better energy and it’s extremely good for you, it’s the reptilian/emotional brains that want the high that comes from the texture and taste of the chip. This relates to integrity just because you have to recognize when the reptilian/emotional brains are taking over and you’re not being logical or operating with integrity.
Integrity is the core of business. Choose team members that have lots of integrity. This may seem soft or not applicable until you look at the opposite. Imagine a team where you couldn’t trust anyone to do what they said, get it done on time or to the standards you wanted. How would your output be? Pretty terrible right? The ability to trust that you can carry out your own desires and the ability to trust the words of another is priceless. If you can’t fully trust your team to carry out what they promise on-time; missed deadlines, finger-pointing and a lot of uncomfortable conversations are sure to follow. This carries the exact same effect with dealings with clients.
Get comfortable being uncomfortable
As an entrepreneur I quickly found myself in tons of uncomfortable positions. Some examples might be the uncertainty of a new project/marketing campaign, an uncomfortable conversation with a team member, or new long-term lease to be signed. Calculate the risk of the project/campaign, have the uncomfortable conversation sooner than later, and talk to mentors/lawyers about the lease. Find as much information as you can about the situation, manage/mitigate the risks, and finally make a decision acknowledging that while you did as much research as you could, you have incomplete data. On a daily basis I had to make decisions based on 60% certainty. There is rarely a perfect answer. Nothing is certain, especially in business. Just like setting out to create a business, the most important part is the decision and action to start. Situations won’t solve themselves with time, especially if you’re CEO.
One of the biggest pieces of ambiguity I had to overcome was whether the company would succeed or fail. Rather than trying to convince myself it would succeed, I completely accepted that it was uncertain, dedicated myself to doing everything possible to help is succeed and accepted the results. Being afraid of failure and being attached to success brings nothing but unnecessary stress.
Many people that talk about starting companies but don’t end up following through don’t truly understand that often times in entrepreneurship starting is more important than planning. Take action now. If you have an idea, create an name for it Monday. Buy a domain on Tuesday. Research all the companies in the industry Wednesday through Friday. Take action now. Today. Not plan. If you think more planning is going to make the future more certain, it’s just an illusion. Planning in entrepreneurship is often only useful as an exercise. The business model will likely change many many times over the development of the company. Build a solid team and vision, and like Columbus, set sail west.