5 Things the Most Successful Entrepreneurs All Have in Common
What do Spanx founder Sara Blakely, AOL co-founder Steve Case, and Dell’s founder Michael Dell all have in common? Besides running their own powerhouse companies, they were also all winners of the Ernst & Young Entrepreneur of the Year Award–in 2002, 1994, and 1989, respectively.
It’s an award the New York City-based professional services firm has given to an average of 300 business leaders each year across regions and industries for 30 years. In honor of the award’s anniversary, EY partnered with the Harvard Business Review to survey 500 of its more than 9,000 past award winners, which includes luxury-fashion company co-founder Rebecca Minkoff and Starbucks CEO Howard Schultz, to find out what it takes to go from big idea to scalable business.
Here are the five main lessons that the founders and executives at companies with a collective $1 trillion in revenue and 14 million employees credit with their success.
1. Debunk founders syndrome.
It’s a popularly held belief that a founder who stays in place too long could end up poisoning the mission of the company and its culture with his or her personal objectives and personality. But the study says that the most successful founders were able to balance out their own influence in the company by empowering other members of their team to own different parts of the mission. By giving employees freedom within the company, 2014 EOY winner and founder of food-service company Bon Appétit Management Fedele Bauccio says he’s able to stay with the company but out of the way of its mission. Plus, it gives him time to do what he’s good at. “The founder is important since a professional CEO may not be able to maintain the culture and vision of the company in a way that has real meat,” he says.
2. Tap into the power of purpose.
It’s not just an altruistic notion anymore. The most successful leaders say they employ a defined purpose to retain employees, earn funding, and build brand loyalty. Founders like Ben Cohen of Ben & Jerry’s say that while profits should be a measurement of success, striving for a greater purpose should be the goal. And the market backs them up: according to EY’s analysis of public companies between 1996 and 2001, those with a defined purpose outperformed the S&P 500 10-fold.
3. Run lean as long as possible.
Self-funding strategies forced founders to focus on the most important aspects of achieving their company’s mission early on. Cohen says bootstrapping was one of the main secrets for his success. “It’s important not to have enough money when you start,” he says. “If you have a lot of capital, you can easily end up wasting it because you have it to spend.”
4. Always be selling–to potential employees.
Finding the right talent was cited as the biggest challenge for businesses–both during the startup days and throughout every stage of growth. The reason? Respondents don’t see recruiting as an end in itself–that is, finding someone with certain skills to fill a job slot. Instead, it’s important to find team members who connect with the company’s mission and possess the qualities that will keep them involved long term. To do that, founders emphasize the importance of fostering a distinct company culture, regularly recognizing employees’ accomplishments, and compensating them fairly. As a small, but important gesture, NPS Pharmaceutical CEO Francois Nader says he makes it a priority to personally greet and shake the hand of each new employee. “It is amazing how much employee engagement you can build from seemingly small gestures of recognition.”
5. Don’t be risky when it comes to risk.
Approaching risk correctly, something all entrepreneurs have to do, is about switching to a proactive mindset. EY’s study says that these founders learned they must map out all the possible routes, and associated risks, before making a move. That way they can form a strategy for mitigating risks along their chosen path. It’s the difference between playing defense, like many corporate executives do, and playing offense, says AOL co-founder Steve Case. “Many corporate executives are defenders. Entrepreneurs are attackers. They are still focused on what might go wrong, but put their attention on making sure more things go right.”
#businessstrategy #entrepreneur #success #risk #marketing