Ken Cauley.com

Why Do Entrepreneurs Have Such Trouble Scaling Their Businesses?

Posted on October 4th, 2006 by kencauley.
Categories: Business.

We have seen it happen many times, and you probably have as well. An entrepreneur who is intelligent, resourceful, and passionate about his or her business suddenly “hits the wall” when trying to take the business to higher levels. When it comes to scaling a business so that it will grow to higher levels, many entrepreneurs just seem to have no end of trouble.

Why is this? After all, these entrepreneurs have proven they have the business sense and enthusiasm to start and run a successful business. What is it about scaling up that creates such difficulty?

Here are four tendencies that inhibit the ability of entrepreneurs to grow their businesses:

1. Loyalty to Comrades –Loyalty is a wonderful trait, but when leaders fail to see and respond when a team member exhibits a weakness, they place their company’s very existence at risk. Stubborn loyalty, at the expense of an organization’s ongoing success, is surprisingly common among the ranks of entrepreneurs. The entrepreneurs who are able to scale, though, understand that their first allegiance must be to the broad community of employees, customers, and investors, and to the fundamentals of the business - not to any single friend or family member, even if they were “there at the start” and have “been with me since the beginning.”

2. Task Orientation – Hands-on skills during the startup mode of a business are critical to successful execution in those initial stages of a company’s evolution. However, continued focus on short-term needs at the expense of long-term strategy is a huge obstacle when it comes time to scale the business. Leaders who scale successfully understand the importance of a streamlined strategy, and have the ability to continuously extract three or four high-level goals and focus their teams accordingly. Furthermore, in the face of new opportunities or threats these leaders are able to release team members from promises made previously under different circumstances.

3. Single-Mindedness – During startup mode, an entrepreneur must have laser-like focus on the quality and differentiation of their new product or service. This is a crucial asset to the success of the business. However, as time goes by a leader’s devotion to a single issue can also damage a growing organization. The ability of a leader to spend time and focus on areas that are not his or her natural strengths is critical to understanding and anticipating issues that could blindside a growing company.

4. Working in Isolation – Many entrepreneurs come from backgrounds that don’t require them to do large amounts of public relations or spend a lot of time focusing on external issues. Their introverted natures and ability to focus quietly and intensely can be powerful advantages during launch mode, but distinct disadvantages when it comes time to scale the business. Leaders who are able to scale well understand and accept that successful CEO’s have to do a certain amount of glad-handing and public relations to represent their companies to the outside world.

There are those entrepreneurs who rise to the challenge of scaling their business without any apparent special effort. More often, though, those who are able to scale successfully do so with at least some help from an outside expert.

Entrepreneurs who grow into leaders that can successfully scale almost always do so because they are open to learning. They take deliberate steps to recognize and overcome their shortcomings, along the way becoming the leaders their organizations need them to be.

Source: TheCEOAdvantage

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