Hindsight is a fine thing, unfortunately most of us learn by making mistakes. There have been a multitude of ups and downs during my last decade as an entrepreneur… many of them avoidable. I have detailed 3 of the biggest; hopefully by reading this you can avoid at least one!
1. Don’t employ your friends
I have brought friends into my business a couple of times, each time it hasn’t eventuated the way I wanted or expected. My thought process was sound; I trust them implicitly, we are on the same wavelength and I know that they have mine and therefore the companies best interest at heart.
In reality, the unintended consequences outweigh the potential benefits. It shifted the power balance away from being equal, even though the intention was not to do this. It is natural to also want to treat them differently and not chastise them for repeating the same mistakes.
I brought the best man at my wedding over from the UK to be the General Manager of my company; what could possibly go wrong! After a year it was clear that it was not working the way we both intended. To this day having ‘that conversation’ with him has been one of my hardest moments as a leader. To his credit, we remain best friends to this day.
2. Deal with stuff, quickly
Deep down you know if an employee is not a good cultural fit for the company and dealing with it in a quick, decisive manner is critical. There have been a few occasions in the early years where we have brought on people who have amazing technical skills, above those which existed in the company at the time. I really wanted to keep them as they provided a lot of value to clients, however, culturally they were an awful fit for the company. They could be argumentative, objectionable and arrogant; not at all attributes we wanted to foster in our organisation. In the past I was slow to deal with these people and they eroded the culture and therefore caused damage to the company. I have now learnt to identify the problems and deal with them quickly and decisively.
3. Today’s stars are not necessarily the future stars
I am intrinsically a loyal person. If you have a job with me and you behave in an ethical manner, you will have a job as long as there is one available. In the early years we had a number of superstar employees, they believed in the companies mission, purpose and values and they gave their all.
Naturally as the company grew, these people were afforded better pay and more senior positions within the organisation. Once the company had grown beyond the startup phase, some of these people were not capable of the roles that they had grown into. Obviously it was no fault of theirs, it was my poor leadership and valuing loyalty over ability that was the main problem.
At one point this mistake cost me hundreds of thousands of dollars and caused the company and product to stagnate. Fortunately for me, I have a great team of advisors who helped me navigate these issues and ultimately create a far better company.
Nowadays I try my best to avoid the avoidable mistakes. One of the ways I have done this is by joining Entrepreneurs Organisation, we are split into small forums (ours has 8 entrepreneurs) who meet monthly for a prescribed 4 hour meeting. The meeting is run in a specific way and uses Gestalt language protocol, meaning you can only speak from experience, no advice can be given. This has allowed me to table issues and learn from other experienced entrepreneurs mistakes before I make them…. Hopefully!