Every time a fellow entrepreneur talks to me about a tough fundraising process, they seem convinced that the problem is potential investors failing to see the business’ potential. Although investors may cite things like market size, technology or stage, the real reason is often that they don’t believe in the entrepreneur and the team. In other words, it’s not them. It’s you. They just can’t tell you that.
So what makes a good entrepreneurial team? There are some traits that are easy to read. What are the backgrounds of the founders? Are they complementary or overlapping? Do they have the DNA to pull off the venture they are attacking? What kind of leadership qualities do they have? Are they trustworthy? Do they exhibit tenacity? All of these are good questions, but I’ve come to the conclusion that the most important attribute of the highest quality entrepreneurial teams is “Thinking while Doing.”
What does that mean?
As we’ve grown BloomReach, I have discovered the challenge that most scaling (and larger) companies face. To align a larger organization requires planning. Planning requires a lot of meetings. A lot of meetings means a ton of (sometimes) unproductive time. And all of that can really slow things down. Don’t get me wrong – I think driving alignment towards objectives is among the most important things a leader can do. But the process of doing so creates a highly linear dynamic:
- Create a strategic plan.
- Socialize that plan with members of the leadership team.
- Solicit bottom-up input from the larger team.
- Finalize that plan with the team.
- Share it and receive input from your board.
- Start planning on execution.
- Lay out the execution plan in detail.
- Refactor the strategic plan based on execution realities (and argue over priorities).
- Communicate the plan broadly including “why” it’s the right plan
- Execute with great focus.
Repeat steps 1 through 10. Nothing is wrong with that process — except that in order to meet reality (fast-changing markets, fast-changing execution considerations, team limitations etc. etc.), it’s just too slow.
A great CEO (which I aspire to be but am nowhere near) can execute the above process flawlessly and thoughtfully, driving both a great strategy and great execution. On the other hand, the entrepreneurial mindset means breaking that process as one deems necessary if it leads to better outcomes. It means thinking while doing. Let’s take a set of examples. What if the market is not responding well to an early product? The corporate mindset would wait until the next strategic plan before killing it. The entrepreneurial mindset would change the product strategy on the fly, independent of the “company goals.” What if the headcount plan suggests hiring 10 more people, but circumstances suggest those 10 people would not be particularly productive until a new leader is identified? The corporate approach would cause the company to execute on the plan anyway (until the next budgeting cycle). The entrepreneurial leader would kill that headcount, independent of what the plan says. What if a number of customers were not happy and the company decided that a product re-think was the only way to satisfy them? The entrepreneurial leader would apply a “by any means necessary” approach to retaining those customers while the product was being worked on.
Thinking while doing is really hard. Most organizations are set up for the leadership and the board to do the thinking and the team to do the doing. That is a broken approach in an entrepreneurial company – everyone is accountable for thinking and everyone is accountable for doing. And both need to be done in parallel. Good planning is valuable to get everyone on the same page towards a great set of goals and with a winning strategy based on current information. But the entrepreneurial mindset requires everyone to be totally prepared to throw out the part of the strategy they are executing on in favor of whatever works. Often that can cause short-term alignment issues or even hurt feelings. But as long as the culture of your startup is one that is oriented to outcomes and not process – all is forgiven. Entrepreneurs at all levels know that alignment is key in the long term. They will certainly communicate actively when they are “throwing out the strategy,” but they will likely do it anyway.
Both thinking and doing are equally important. Many teams I meet are super-scrappy and show great traction, but when challenged, they can’t clearly articulate why their approach is the winning one. Equally, many teams have the most thoughtful plans, but little to show for it. The magical startups have both. When investors ask you to present your plan, then follow that up with a series of questions about traction – they are in effect asking you if you can think while doing.
Having a well run strategic-planning-to-execution process, while maintaining an entrepreneurial mindset (which by definition means breaking that process when it’s the right answer) is a brutally difficult judo move. But the best businesses do it. The next time you’re thinking about whether you have the right entrepreneurial environment, ask yourself three basic questions:
- Do you have a great plan that everyone buys into?
- Do you have world-class execution skills to make that plan a reality?
- Do you have a mechanism for everyone in the company to throw out and refactor their part of the plan when they feel it’s the right answer?
If you’ve answered yes, yes, yes – you’re set with a scalable, yet entrepreneurial, culture of excellence.