Unintended Consequences Matter

Optimal 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. Unintended, and un-thought of, consequences do matter!

Ravi Patel

 

Look at the Bigger Picture

Given the current shutdown of businesses, Entrepreneurs must be stressed out regarding all that they have to do when everything opens.

The well-known Pareto Principle of 80/20 could be helpful.

A lesson from that principle is for Entrepreneurs to focus on the big things they need to do and not worry about all the small details. Delegate the small stuff to others. If one dwells on small things, there is little time to work on the larger, more important things in business.

Similarly, if you are dedicated to bringing back revenues, focus on the 20% of strategies and tactics that would generate 80% of the returns. The same philosophy should be applied to keeping employees,  customers and suppliers safe.

Do the Right Things!

Re-creating Team Cohesiveness

With stay-at-home in effect, many Entrepreneurs, their management teams, and employees are working from home.

While mentoring and coaching the members of the management team is possible via video conferencing, Entrepreneurs need to build cohesiveness in their teams. Members of the management group must work well together and function as a well-oiled machine. Doing so remotely becomes very difficult.

The Entrepreneur should plan, after businesses reopen, team building events, preferably off-site, to re-create a feeling of camaraderie among the management team and facilitate effective working relationships between the members.

Ravi Patel

Make it About Others

Effective leadership should never be about you. Unlike dictatorship, it should be about others and a common cause.

Although Entrepreneurs start companies and should take pride in that, they should not focus the growing of the company all about them. Instead, the emphasis should be on the Mission of the company.

It is far easier to lead people around a common cause or good than for someone’s personal victory. A true leader strives to make it about others and constantly reinforces the message that achieving a particular Mission serves ALL stakeholders rather than only the leader.

Entrepreneurs can become great leaders if they can ensure that it is not always about them, but others!

Ravi Patel

Staying Cool Right Now

Entrepreneurs are facing a stressful and chaotic situation with the effects of the coronavirus. Are you keeping your cool demeanor in these trying times?

Have you watched firefighters, policemen or even bomb diffusers operate in high-stress situations? Their ability to act calmly reassures everyone around them not to panic.

Similarly, leaders who stay calm and keep their cool under chaotic business situations inspire confidence in their employees. Instead of panicking, they all tend to follow their leader and behave productively to resolve the issues. If the leaders lose their cool, who can blame the employees for doing so too?

Great leadership inspires people to do phenomenal things. Calm and cool leadership in volatile situations prevents their followers from panicking or performing irrational acts or even worse inciting riots.

Stay cool during these tough times Entrepreneurs!

Ravi Patel

Published in: on March 24, 2020 at 6:54 am  Leave a Comment  
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Managing Perceptions

A few simple tips for Entrepreneurs to positively manage perceptions in various situations:

  • Never overreact to situations where there is employee dissatisfaction or customer or vendor complaints. Analyze the situation calmly before taking proper corrective action, instead of taking hurried actions due to external pressure.
  • If you do have a serious situation, do not create a smokescreen and divert attention away from it to hide the real problem.
  • Do not focus on the small or minor issues in managing your companies; focus on the larger or macro issues for greater impact. Let your management team manage the details.
  • If you need to make a statement or message regarding any irregularities in your company, do it for significant issues not trivial ones. If you mostly emphasize minor matters, your employees or going to be dismissive of such gestures.
  • Be sensitive to the message that you send with your actions. If you are being austere or are having cost reduction programs, do not have bonuses or spending that is contrary to the current environment in your company. Having incentives is not inappropriate, but make sure that they are related to the right objectives and are perceived positively.
  • Of course, when you are borrowing a lot of money, do not spend it on bonuses or management extravagance. If contractual obligations are involved, renegotiate those for the long-term financial health of the company and goodwill for all stakeholders.

While the above sound obvious,sometimes we tend to lose sight of reality and the negative perceptions that are created.

Ravi Patel

Pacing Growth

“To climb steep hills requires slow pace at first.” – William Shakespeare

As most Entrepreneurs know, starting a new business and helping it grow is akin to climbing a steep hill. If you climb too fast you run out of energy and might not get to the top; a slow pace is required at first to build up strength and stamina to reach the peak.

Entrepreneurs too need to pace their growth. At first, one needs to move slowly to ensure that all the building blocks (fully developed product or service, employees, backroom systems and processes, etc.) of the business are in place. If one starts running without these fundamentals, one might not be able to get too far.

Starting with a slower pace also ensures that you have time to make sure everything is working as intended. If corrective actions are required, you have time to fix the problems before you get too far down the road.

Once the foundation is in place and you have warmed up, you can gradually increase the pace of growth as your building blocks are strong and the business has stamina.

Pace yourself in business to climb to newer heights.

Ravi Patel

Published in: on February 4, 2020 at 6:36 am  Leave a Comment  
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Respect Chain of Command

Entrepreneurs are often used to doing  mostly everything themselves when they start their businesses. As they grow the organization, Entrepreneurs should build a structure with people in key functional positions and clearly defined supervisor-subordinate relationships establishing a clear chain of command.

Due to their founding the company and established informal relationships with initially hired employees (could be friends), Entrepreneurs sometimes bypass the established chain of command and direct such employees at lower levels. This also encourages these employees in turn to bypass their supervisors and deal directly with the Entrepreneur or CEO.

Emergencies and critical decisions necessitate a breakdown in the organizational hierarchy. However,  organizational structure and the established supervisor-subordinate relationships need to be maintained to facilitate people to “Do the Right Things” and build companies for long-term growth .

This does not imply that Entrepreneurs should not maintain informal, leader-follower relationships at all levels in the organization. Instead, Entrepreneurs should cultivate an environment where the key management team and supervisors are the decision makers within their sphere of responsibility instead of relying on or promoting all significant decisions to be made by the Entrepreneur or CEO by bypassing formal relationships.

Ravi Patel

Firing without Aiming

Some Entrepreneurs are passionate and innovative with a bias for action.

While a seasoned executive will take a calm, thought-out approach to decision-making, akin to “Ready, Aim, then Fire,” some Entrepreneurs like to make quick decisions rather than deliberate for very long. They jokingly call this approach “Fire, Aim and then worry about whether you are Ready or have correctly Aimed or not.”

Who is right? Entrepreneurs need to carefully blend both styles of decision-making depending on the situation at hand or surround themselves with advisors who can complement the Entrepreneur’s decision-making style. No one style is always correct!

Ravi Patel

Published in: on December 17, 2019 at 6:43 am  Leave a Comment  
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Lead by Example

Leaders often encourage their followers “to give their best” to whatever they are doing. Entrepreneurs do the same when motivating employees towards fulfilling the Mission of the company.

In a team environment it is normal for all employees to contribute to fulfilling the objectives of the mission. However, is it always true for the leaders?

If Entrepreneurs expect the best from their employees, then they too should give their very best to the employees and the company. Do they? Leadership by example is not just a catchy phrase!

Entrepreneurs need to give their best to the organization to inspire their employees to do their very best. If Entrepreneurs show an attitude of “do what I say, not what I do,” their employees are not going to be motivated for the long haul.

Doing the right things for leaders means giving 100% or more to prove to the employees that they all are part of the same team and everyone needs to contribute their very best.

Ravi Patel

Published in: on December 10, 2019 at 7:00 am  Leave a Comment  
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