The 12 Dysfunctions of an Entrepreneur

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The 12 Dysfunctions of an Entrepreneur

1. Failure to evolve.

Markets change over time. People’s needs change over time. One of the biggest problems that I see with entrepreneurs and small businesses is that they start the business based on a single solution, or set of solutions, products or services, that satisfy one particular need or pain point in a market, and they may be doing it very well at that point in time.

But over time, markets evolve, needs evolve, pain points evolve and everything changes. All too often, the people who are providing solutions for those markets don’t continue to evolve with the markets and are left with a bigger and bigger gap between the need and the pain point of the market and the product, service or solution that they’re providing. Add a drastic change in the bigger economy and the speed at which these gaps open grows exponentially, as does the width and depth of the gaps.

The answer here is to keep your finger very much on the pulse of where the pain points currently are in the market and how they’ve changed from when you started your business. Create regular check-in mechanisms to see whether your current solutions are driven more by ego or the desire not to endure the anxiety of change or a continuing need in the market.  Then use that information to change the nature of the solutions that you’re providing, if needed, to keep them as relevant and powerful as humanly possible.

2. Perceiving R&D and marketing as separate functions.

Very often people start a business by creating some sort of product, service or solution and then turning around and asking the question, “How do I market this?” Truth is – product creation and marketing are two points along the same continuum. The more remarkable, the more powerful, the more effective you can make your solution, the less you then have to turn around and say “What do I have to do to market this?”

Building around remarkability and delight is the single most powerful way to market a product.

Because, when you get those down, people can’t shut up about how what you’ve created is blowing their minds on a daily basis. Thing is, these elements are cultivated at the moment of creation, not as some afterthought for the product. Focus your energies on how to make something remarkable and delight potential purchasers at the moment of creation and it will make your marketing much, much easier. In fact, it may even turn it into an afterthought.

3. Failure to understand the importance of culture.

A lot of companies roll along thinking, “If I create a solution which completely kicks ass, which solves a problem in the market, that’s really all I need to do.” If your solution is capable of being provided just through one person or completely commoditized and made as an online, downloadable business, that may in fact, be true.

But if you plan on growing a business – a company with people – the interrelationships between you and those people and between them, becomes paramount. You’ve got to focus on what type of culture you want to build within your organization. Same way Tony Hsieh focused on culture as a driving force in building Zappos.  The culture becomes a core driver of your business’ success and if its not built right – failure.

4. Over-working and under-thinking.

Very often there’s an ethic in business that says you’ve got to put in a ton of hours to get the job done. In fact, working hard is pretty much an important part of any major business accomplishment, especially in the very early days around launch time and the first couple of years.

But a lot of times the biggest solutions, the greatest breakthroughs, the most relevant and impactful innovation comes not when you’re working, but when you work hard and then step away and allow time for contemplation, and for breakthroughs. When you’re building a business, rather than focusing on how many hours you can put in, step back and really encourage – not only in the way you behave but in the way your employees carry themselves – time for pure thought, time for contemplation, time to remove yourself from the setting and the nature of the work and allow for the greatest revelations to simply bubble up.

5. Going it on sheer will for too long.

Very often a company starts based on the sheer willpower and the sheer drive and energy of one particular person or a small team of people. As long as all of the tasks that need be accomplished can be handled by that person or team, the company continues to move forward. But inevitably, as you scale, you reach a point where those people can’t humanly work anymore.

And if the company will continue to grow in the way that its capable of growing, it will need to be based on a bigger, more systematic set of guidelines that other people can then be exposed to, adopt, and then tap, in order to grow the business more systematically. Once you reach that critical tipping-point where sheer willpower will no longer drive the business, it becomes massively important to have well thought-out systems to build your business from that point forward.

6. Playing prevent offense.

One of the biggest things that tends to happen in business is that they start out led in a sort of visionary, aggressive outreach, innovation manner and then once business starts coming in, the mindset shifts to thinking about how to preserve the wins or the gains that have already been accomplished, rather than focusing on constantly innovating and delighting existing and new clients on the level that they never expected.

This is called “playing the game with a prevent offense.” Instead of trying to consistently win and delight, you’re consistently trying not to give up what you’ve already gained. And, in the world of business and entrepreneurship, it’s pretty much the fast track to failure.

Entrepreneurial businesses can’t survive with a focus largely on keeping what you’ve got. The focus has got to be consistently on continuing to delight and surprise the clients that you’ve already retained while also aggressively moving forward, innovating and pushing to take that level of service to the next level and continue to lead the market. Sometimes that means it’s an uncomfortable place to be in, but it’s a far better place to be in than sitting back and just hoping and praying that you don’t lose a client.

7. Hoarding control.

This one hits close to home for me because I am admittedly a bit of a control freak. As an entrepreneur, and most entrepreneurs I know are control freaks, we have a lot of trouble giving away control and power. But, when you hoard control you not only limit your business’ ability to scale, you inadvertently demean the people that you’ve brought into your organization because even if its not overt, what you’re telling them is “I brought you in here, I told you I trust you.  I told you I’m going to hold you accountable to my vision and my growth goals, but I do not trust you to think, to create, to innovate, and to execute.”

When you send that message to the people who work around you and with you, you kill their will and you create a culture of dislike and distrust. Therefore, it becomes really important to take a regular check and take some risks. Allow yourself to feel uncomfortable as a leader in a small business. Hire amazing people and give them control.  Hold them accountable to a particular result, but give them the ability to take action, to execute, to create, and show you what they’re capable of.

8. Incentivizing innovation with a carrot and stick.

In Dan Pink’s recent book, Drive, he reveals some fascinating research which showed that for very simple, rogue, mechanical tasks, the traditional carrot and stick – meaning, if you do X, I’ll give you Y and if you do X even better I’ll give you even more Y – tended to work fairly well as a motivational system.

But as soon as you bring in tasks that are more complex, more creative, or innovation oriented, the traditional carrot and stick type of motivation not only doesn’t work, but it literally disincentivizes behavior that naturally would have been incentivized simply by the opportunity to do something very cool. So, when it comes time to figure out how to motivate those types of activities in your organization, take a step back and instead of offering money or particular tangible things as motivation, think about how you can facilitate mastery. How you can allow people the opportunity to move more aggressively toward mastery of something that they’re already intrinsically drawn to and that becomes about the most powerful motivating factor that you can have for people within your organization.

9. Focusing on hours over results.

One of the biggest gripes of a lot of people that I know who work for bosses, is a focus on what used to be called “face time.” You had to be in a place for a particular amount of time, you had to attend meetings because that’s just the way it was. You had to push a certain amount of documents, because that’s the way it was – these were the processes. Meanwhile, all these actions were being taken, meetings were being had, and clocks were being punched, but results weren’t being accomplished.

A much more effective way to grow an organization is to allow people a certain amount of freedom.  Allow flex-time.  Being at the office for a particular number of hours, being seen at an office, really isn’t relevant if the results aren’t coming. Focus on results. Task people with goals that are meaningful to them.  Give them the resources needed to meet those goals and then, step back and like we talked about in #4 above, tell people “I trust you to get this done by this particular date. How and when you do it is up to you.”

Not only will people feel empowered by that level of freedom and trust, but you’ll find them working on it in different parts of the day in different ways that accommodate their lives much better.  And they’ll become much happier employees because they have a work situation they can wrap more effectively around their lives and their lifestyles.  In the end, we don’t really care if something is within particular hours.  What we really care about is that it’s done well and on time.

10. Underestimating the delight margin.

People are creatures of habit. It takes a near seismic shift to make them change routine.  Even if the routine they’re in or the solution they’re currently using is sub-par. Even if they gripe about it every time they use it.  “Better the devil they know,” they figure. That means, if you hope to move someone from a competitor to you, your product, service or solution must not be 5% or 10% better, but 5 to 10 times better.

It takes that much energy, that much of a difference for you to move somebody to actually take action.  Fact is, if they’ve already taken action and committed to a competitive solution, you probably need to ramp that 5 to 10 times up to somewhere between 20 and 30 times better to move them away from a long-term competitive solution.

11. Forgetting the fun.

Most small businesses are launched, at least in part, in a quest to discover then mine the sweet spot between a viable economic niche and some product, service, activity or solution that in some way engenders joy in the founder. So, people like Tony Hawk build a business empire around the joy of the activity they love. In the beginning, it’s fun. There’s an energy to launching that keeps everyone feeling up. But, all to often, over time, that sense of fun begins to evaporate and the focus turns to efficiency, production, systematization, scaling and growth.

These are all critical elements. But, a funny thing happens when instead of being “added to” a sense of fun, purpose and joy, they “replace” those things…the energy of the company begins to tank, mood crashes, productivity falls, morale craters and along with that goes growth and success.

In business and in life, fun matters!

Genuine joy in what you’re doing matters. It infuses and impacts every aspect of your business. Maybe it can’t be there every moment of every working hour. I didn’t particularly love cleaning the toilets in the early days of owning a yoga studio. But, it was a minor blip on a bigger, more joyous radar screen. Do what you can to preserve as much sense of joy and delight as possible for those who help build your business. When you do, not only will you have a better time, your employees will, too. And, that will spill over into every touchpoint with your customers as well.

12. Bailing on your body and mind. Even if you love what you do, starting and growing a business includes a whole lot of stress and uncertainty. There is no way to eliminate them. But, it is mission critical that you develop practices that allow you to move through them without losing your mind and watching your body decompose. That means, like it or not, some kind of daily movement or exercise and some form of attentional/mindset training are not only important in your quest to stay focused, fit and capable of enduring the stress of entrepreneurship, they’re mandatory.

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34 responses

34 Responses to “The 12 Dysfunctions of an Entrepreneur”

  1. [...] This post was mentioned on Twitter by Jonathan Fields and James Fuller, Noreen Blanluet. Noreen Blanluet said: RT @jonathanfields: The 12 Dysfunctions of an Entrepreneur – http://su.pr/2NZW6L [...]

  2. blogjunkie says:

    Great post! I’m guilty of nos. 5, 11 & 12 myself and I see too many who misunderstand the role of marketing (no 2)

    I’ve tried to ‘fix’ my dysfunctions by trying to gain some perspective regularly. I’ve been meaning to take a mini-retirement like Tim Ferris advocates but haven’t had the chance. So for the time being, 2 days with no Internet and a good book will have to do for now. I’d appreciate any advice you have on this :)

  3. RJ Weiss says:

    Really enjoyed this post.

    #12 – I have struggled a lot in the past with #12. Sometimes I get so focused on a project, I lose balance in other areas of my life. Especially sleep.

    The other day, I ordered Tony Schwartz new book that I saw on here. Excited to give it a read because it sounds like exactly what I need.

  4. [...] Read More… Click here to cancel reply. [...]

  5. John Sherry says:

    Yes that’s the one – forgetting the fun. But it’s not just would be entrepreneurs who let go of letting go and stop enjoying the scenery of life and work. It’s most people in these work frenzied days. Fun is the new f-word in business circles.

  6. Great stuff, Jonathan. Both in my own business as well as in others I work with, I especially resonate with the importance of culture, and how as an entrepreneur you have the opportunity, should you choose to be aware of it, of creating one that supports your vision and values. And as you said, if not–look out. It’s a hard thing to change once it’s ingrained in the system.

  7. Great list, Jonathan. Especially #7 (I”m a bit of a control freak, too) and #9 (I have indeed been a victim of bosses who preferred paperwork and hours to results).

    If I may add one more, I would say that it’s important to charge what your products are worth. Which isn’t to say that you should gouge your customers, but instead provide the right amount of value for what you’re charging.

    I’ve seen too many price wars over inferior products put too many entrepreneurs out of business, because they didn’t understand this very simple principle.

    I know that I’m willing to pay more for a better quality product and better customer service, and so are a lot of other people, so why not provide that, and then charge a price that makes sense for the customer and for your profit margin?

  8. John says:

    I really enjoyed your post. These things are also true of non-profits as well. Often in the non-profit world we forget that many of the principles go both ways. Thanks for your insight.

  9. Elaine Huckabay says:

    Great job, Jonathan! I think the points about culture and hoarding control go hand-in-hand. All entrepreneurs must remember that they have to find, grow, and cultivate other members in trust, creativity, and power. A leader that hoards control and fails to develop a sustainable culture is no leader at all but rather a one-person-show. The best thing one can do for a small business is just like doing that for children – give it roots (culture) and give it wings (release control).

  10. Maxim says:

    Jonathan, post is a great collection of advice! These are actually important things to remember but too easy to forget…

    Also, I have a question. Could you please tell me the name of the plugin/widget you use to display these sharing buttons on the left? Would be perfect if you could reply by email. Thank you very much!

  11. Chris Bruce says:

    Nice post Jonathan,

    Some of the touch points for me are the uses of the terms “delight” and “fun”. I truly believe that fun is contagious, and more often than not, if you are having reams of fun developing your service, product or what have you, then you will have a much easier path to delighting your customers.

    The global market and financial downturn has certainly served to inject some pathos into the system, but your 12 points are important to keep in mind and strive to overcome in order to push through the walls and inject this fun and delight back into the sphere.

  12. Diane says:

    Hi Jonathan

    Thanks for this enjoyable post. I too like the idea of pushing to achieve the remarkable and to delight my customers, which could be seen as going the extra mile.

    It’s so important to have a balance of work/play, especially with the exercise. My Doc said, “Make an appointment with yourself daily, and take some exercise, and never feel guilty about doing so, because without good health you won’t have a business”. Keep up the great posts for us all to enjoy.

  13. Kerri says:

    Wonderful list. All true. I’ll be sharing this post with many folks. Thanks!

  14. GREAT list. Even if we know some of these points, it is ALWAYS helpful to be reminded of them. I always keep fun high on the list of priorities and also keeping fit in mind and body. I do a weekly Nia practice. (http://www.nianow.com) It’s like yoga on steroids — provides meditative movement to great music. I credit nine years of regular Nia with keeping me balanced in work/life. For entrepreneurs, is there a line between work and life?

  15. [...] AVG, tells us what we’re up against and what to do about it. Business PunditSelf-developmentIs your small business dysfunctional? Troubles with the founder, owner or founding team of a business aren’t limited to the startup [...]

  16. [...] Is your small business dysfunctional? Troubles with the founder, owner or founding team of a business aren’t limited to the startup phase. Difficulties can also rear their ugly heads as your business grows, creating new challenges and the need for change to meet them. Here are 12 of the most common dysfunctions you’ll see among entrepreneurs. Recognize any you have experienced? JonathanFields.com [...]

  17. [...] Is your small business dysfunctional? Troubles with the founder, owner or founding team of a business aren’t limited to the startup phase. Difficulties can also rear their ugly heads as your business grows, creating new challenges and the need for change to meet them. Here are 12 of the most common dysfunctions you’ll see among entrepreneurs. Recognize any you have experienced? JonathanFields.com [...]

  18. [...] Is your small business dysfunctional? Troubles with the founder, owner or founding team of a business aren’t limited to the startup phase. Difficulties can also rear their ugly heads as your business grows, creating new challenges and the need for change to meet them. Here are 12 of the most common dysfunctions you’ll see among entrepreneurs. Recognize any you have experienced? JonathanFields.com [...]

  19. [...] just last week, Jonathan Fields posted The 12 Dysfunctions of an Entrepreneur.  Almost as an answer to Marc’s series, Jonathan explores 12 of the worst character traits [...]

  20. Clara says:

    First, I confess that I’m catching up on old posts, having just returned from a vacation where I tried to be online as little as possible, so my comment isn’t even related to this post, but to an earlier one: ‘Is Social Media Killing Authenticity’?

    I’ve been a lurker to date, but finally figured I had to jump in and let you know how much I enjoy hearing what you have to say.

    Initially, I started reading your blog after I bought your book, Career Renegade. I was drawn to Career Renegade, in part, because of your background (I’m a former CMO of two large corporate law firms and a legal marketing veteran) and in part because of my interest in entrepreneurship and in finding ways to make a living doing what I love.

    I appreciated the apparent authencity of your voice (geesh, “authenticity” is so overused these days to the point where anybody using it starts to sound inauthentic, but, hey, it’s hard to find a good synonym, the lack of bullsh*t, and the values that came through in the spaces in between the words. You’re now one of only a handful of individuals whose posts I read regularly, both for the content and for what’s behind them.

    So what prompted me to unlurk today? Well, as I read the post, I realized that while it’s about social media and how it can alter us, it’s also about ambiguity, and about noticing what may be happening to us before it happens, and about continuing to question both the value and the effects of the things we do and the tools we use. You’re not providing us with answers, or Truths (with a capital “T”), just suggesting that we pay attention, and that in itself is unusual, and welcome.

    As a marketer, these are issues that I think about often. I shy away from a knee-jerk acceptance of the strategy or tool de jour, and when I use the strategies or tools, I try hard to keep “noticing” and questioning.

    So, no earth-shaking observations here; I just thought it was time to say thanks.

  21. [...] Out Of Your Comfort Zone – Uncornered Market Tips For Hiring Great Employees – Inc. The 12 Dysfunctions of an Entrepreneur – Jonathan Fields/Awake At the Wheel 5 Team-Building Lessons From the NBA Playoffs – [...]

  22. Great job, Jonathan!

    Superb list. All your points are true, I really liked #4 over-working and under-thinking.

    Thanks for sharing the interesting and engaging post.

  23. Wow, this is awesome Jonathan! This really made me take a step back and figure out some of the things I’m doing wrong. Thanks for sharing!

  24. Superb post. I really liked the points about making R&D and marketing the same thing, building interrelationships, and avoiding prevent offense. Excellent stuff that any entrepreneur should definitely understand.

  25. Phil SImon says:

    Interesting post. Upon reading it, I immediately thought of Drive by Dan Pink, which I recently read. Of course, then a few paragraphs later, you quote the book.

    Great minds, I suppose.

    I am reading the Facebook Effect now and it’s interesting to see how Zuckerberg kept focusing on the product and community, knowing that money would come later.

    Follow your passion. Money will come later.

  26. ben david says:

    The 4 Hour Work week addresses the ones associated with productivity (which really is all of them) Ive experienced most all of these. Thanks for the post.

  27. Regarding #2 Perceiving R&D and marketing as separate functions:

    One of the most frustrating jobs I ever had – trying to build a new line of business for an organization with an anti-entrepreneurial culture. Day after day, I was reprimanded for failing to find more ways to pry open people’s wallets for our service. Day after day, I presented research showing that the WAY customers wanted the service delivered was in direct opposition to the way management thought they should want it.

    Result: every product met by prospects with “too expensive,” “too inconvenient,” or just “huh!”

  28. [...] a look at Jonathan's entire post, "The 12 Dysfunctions of an Entrepreneur," and see if some of his statements make sense to you. And then change some things [...]

  29. Bill Simmel says:

    GREAT article, should be required reading for any entrepreneur / small business owner. You have hit the nail on the head and go well beyond the E Myth.

    These 12 points should be on every small business owners’ desktop for a monthly “gut check”

    Nice job.

    Bill

  30. I read the entire article, but I think my mind was stuck on #1. Looking back at previous business ventures, I can see that without a doubt, our lack of paying attention to the market (and possibly a fear of changing something that “works”?) kept us from evolving and keeping up with changes. It will be a personal post, but think I’ll focus on this with a future blog entry…excellent article!

  31. [...] full article……via The 12 Dysfunctions of an Entrepreneur.  From Jonathan Fields Share OptionsPrintTwitterEmailMoreFacebookLinkedInStumbleUponRedditDiggLike [...]

  32. Diana Bear says:

    You are remarkable and delightful…thank you for your insights

    Respectfully Submitted,

    Diana Bear

  33. [...] Turn up the volume on the remarkable. Posted on March 10, 2012 | Leave a comment Focus your energies on how to make something remarkable and delight potential purchasers at the moment of creation and it will make your marketing much, much easier. In fact, it may even turn it into an afterthought. – Jonathan Fields [...]

  34. Mikael says:

    Very creative and well written dude! Loved it!

    Mikael.