Over on Xconomy, Steve Woit had a great post on the top 10 mistakes by entrepreneurs last quarter. According to the post, they are:
- Undervaluing the importance of the management team.
- Attempting to build the business around rocket science.
- Assembling the wrong ownership group.
- Over-valuing the business at critical junctures.
- Failing to communicate with important constituencies.
- Failing to tap knowledgeable advice.
- Fear of dilution or loss of control.
- Spending too much for too little.
- Partnering for too little.
- Failing to understand the changing roles of founders.
What really struck me is how similar this is to the top 10 mistakes made by managers, which I could argue are:
- Under-valuing the importance of your senior staff.
Face it – half of the best ideas anywhere are going to come from them. Take the cotton out of your ears and listen. It’s your job as a manager to identify and implement the best ideas. This doesn’t mean that you have to come up with all the ideas yourself.
- Attempting to build your business around the business opportunity of the day.
I’ve seen company after company after company fail with this short term thinking … every quarter was a new project (despite the fact the project from the last quarter never got finished) and then they’d wonder why they went bankrupt.
- Assembling the wrong advisory board.
A group of ass-kissing yes-men might be good for the ego, but it’s bad for the business.
- Under-valuing key parts of your offering.
Sometimes an auxiliary product or service is actually more valuable than what you think your core product is. Failing to recognize this will rob you of your best revenue opportunity.
- Failing to communicate.
Your employees what to know what’s happening, and, more importantly, why. Half a message is often worse than no message – don’t make this mistake.
- Failing to understand the value of a good consultant.
As I pointed out in consultants are cheap, consultants are a very valuable resource that you can use to take your operation to the next level.
- Fear of experts.
Many managers think that they’ll be seen as weak, stupid, or dispensable if they turn to experts, when, in fact, the opposite is true. A good manager knows when there is a problem that requires expert input, and that she doesn’t have to worry about being replaced because managers who make the right decisions get rewarded (and promoted).
- Spending too little.
Many managers cheap out just to make the short term financials look good, even when the net result is a long term loss. This is particularly true when it comes to getting employees the tools and training they need to be productive – especially in IT and Supply & Spend Management when the company doesn’t understand the productivity enhancements that the right tools and training generates.
- Partnership avoidance.
You shouldn’t partner too early, but sometimes it takes a partnership to take the business to the next level. Also, the right partner at the right time can help a company address an emerging market trend quicker, and this can make a huge difference in the scale of new market penetration that a company can achieve in the short term.
- Failing to understand the changing nature of the business.
Some managers don’t think they’re doing a good job unless the business runs like clockwork … but considering even Canada’s top economist admits that if you’re doing business today the same way you were doing business even five years ago, that you’re on your way out of business … clockwork management just doesn’t cut it anymore.
Now, regardless of what I say, or don’t say, you’re going to make some of these mistakes – you’re only human, and it’s hard to get a 360 view when you’re inside the box. But whatever you do, don’t forget #6! If you can’t see the problem, chances are good consultant can – and it will be money well spent!