WHAT YOU FEEL: no one that you work with – employees, consultants, vendors, family, friends – seems to live up to your standards
PERSPECTIVE: I recently had an entrepreneur tell me “no one can perform up to my standards.” I asked her “what about Steve Jobs or Arianna Huffington or Martin Luther King, or Donna Karan or Jack Welsh?” Would they be OK? I was trying to prove a point but I have no doubt I said the same thing when I started my company.
Entrepreneurs need to understand this feeling, why they feel it, how to manage it and the consequences. It makes a lot of sense. At early stages, you don’t have the financial or human resources to put in place normal relationships. This applies to many constituents such as employees, vendors, advisors, board members and consultants. Employees, for example, are often working for below-market compensation packages, for equity or even working for free on the side of their current jobs. Vendors are rarely paid full freight and are often asked to make financial concessions for the promise of working with the company in the future. Advisors often help the company without compensation and for the potential of the future. Same for board members. Even individuals that help with raising capital, especially at early stages, are not paid normal compensation.
Not only are many constituents underpaid (or unpaid), but you also don’t have the resources to manage them effectively. Combine this with a few other realities. First, no one cares as much about the business as you do. Second, no one has spent as much time thinking about it as you do. Third, these people have lives in which they laugh, relax, sleep, drink for fun (and not for serenity) and even take things lightly. Finally, what you spend all day thinking about is a blip on their screen. With the exception of full time employees, these resources dip in and out of your world. When a member of your advisory board wakes up in the middle of the night (like you do), he likely did so because he was worried about his sick daughter or his new boss or his mortgage bill or his golf game. Think of it like a pie. Your pie is 99. 999% your business. Their pie is life, love, family, business, sports, travel and the rest of their normal lives.
When entrepreneurs interact with these resources, they think they are not committed, are underachieving, or are not doing the business justice. We say “if they are not going to put their best foot forward, they should not be involved.” I recently had an entrepreneur say to me:
“It would be easier to get rid of everyone. No one does what they say they are going to do and when they do, their work is bad and late. They don’t even read the materials I send them. My board members are a bunch of old grey hair guys but what do they do for the company? My advisors are a waste – they aren’t out making introductions on financing even know they know how much we need money. My employees take the weekend off even though they know how much we have going on. One of my employees even told me she played in a volleyball tournament this weekend. My investment guy schmoozes and isn’t building the investment materials.”
I asked her two questions. What are you paying these people? What is the common denominator amongst these people? The answer was “nothing” (or little) and the common denominator was her.
Another colleague had contracted with a manufacturer to produce a product. A year earlier she asked the manufacturer to invest time in developing the prototype because if the business took off, they would need hundreds if not thousands of units. She called me and told me that her vendor was being unreasonable. She said that the vendor was not willing to deliver the final product and there were cost overruns that were unacceptable. She was considering legal action. I asked her “how long has the vendor been working on this and how much have you paid them? She said over a year and about $10,000. I said “$10,000 for a year, that’s an hourly rate of about $5.”
As entrepreneurs, we lose perspective all the time. The common denominator in these issues is you. You fail to recognize that given below market compensation and the other factors noted above, these resources will not be effective and valuable unless you manage them. It’s like buying the ingredients for making an elaborate dinner of pumpkin soup with crème fraiche, rack of lamb, braised vegetables and chocolate soufflé, dumping them in the kitchen with the busboy and coming back two hours later and screaming “I can’t believe that you mixed the crème fraiche into the soup.”
The failure to recognize the nature of your relationships with these resources and their level of commitment will lead them to underperform in your eyes. You will get frustrated that people won’t read voluminous materials and don’t spend every waking moment living your perspective. The sooner you realize this, and understand that it is your responsibility to manage these resources by aligning their skills and time commitment with actions that serve the business, the sooner you will no longer think that everyone sucks.
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