Letting People Go

One of the most difficult things for an Entrepreneur to do is letting people go, especially ones hired in the initial stages of the company.

The slow-down in the economy, budget cuts, tight cash flow situations and so on require Entrepreneurs to take drastic measures for the survival of the company. In this situation, the employees that are retained are ones who are multi-faceted and can handle varied responsibilities. Long term employees, though good performers, have to be let go to consolidate jobs and streamline the organization.

Entrepreneurs need to make reduction-in-force decisions based on the continuing needs of the company rather than past loyalty and emotion.

Spock, in the Star Trek series, has a famous line, “.. for the benefit of the many, a few have to suffer.” Entrepreneurs should heed to that thought.

Ravi Patel

 

Unintended Consequences

Good decisions for significant matters take into account all angles, even arguing from other points of view.

Adding to this process of making good decisions, Entrepreneurs should also weigh unintended consequences of their decisions. Did you evaluate, at least for significant issues, potential unintended consequences?

Take an example of developing an incentive program. If you have developed a program that correlates high performance with high reward, it is of course your intended consequence. But, what about unintended consequences of employees cheating or manipulating the system to obtain higher compensation? How have you protected the company against such unintended consequences?

When making crucial decisions consider potential unintended consequences and implement appropriate internal controls.

Ravi Patel

 

False Expectations

Entrepreneurs get into business with an idea that they hope to develop into something really big.

As they put together their Business Plan, they have certain expectations of how this idea will be commercialized and the Revenues and Income that the business model would generate.

Entrepreneurs hire people and have expectations regarding their performance. Similarly they expect clients or customers, vendors, other stakeholders will work with them in certain ways.

Entrepreneurs need to be careful about not having false expectations or hopeful wishes when they develop their Vision and Mission. All expectations need to be realistic, rational, and take into consideration the factors beyond the Entrepreneur’s control.

Having false expectations leads to unachievable dreams and disappointment. Moderate your expectations to be realistic, so that when your expectations are exceeded one has a reason to be jubilant.

Ravi Patel