We’ve all heard the grim data about startups’ success rates: 8 out of 10 will fail within the first year and 96% percent will fail within the first 10 years. If it’s challenging for a startup to get liftoff, the odds are even further stacked against entrepreneurs building a startup that thrives in today’s global marketplace. But do you understand why startups fail? And how other startups make it?
Here’s their secret: Don’t try to do everything. Instead, build a successful, sustainable business by narrowing your focus to three things.
1. Focus on Results
We can all agree that the #1 reason why startups fail is the same reason they succeed: Results.
The problem? Too many leaders fail to define the Key Results they are trying to achieve.
A Partners In Leadership Workplace Accountability Study confirms this. Eighty-six percent of people from companies across the world, Fortune 50s to startups, said that Key Results were NOT clearly defined and understood throughout their organization. And 84% of respondents said priorities change frequently, creating confusion around the Key Results they need to achieve.
What this means is that most leaders fail to define what the end zone looks like. The equivalent would be Tom Brady out on the football field continuing to throw for first downs but never scoring a touchdown–and not even knowing if he was heading in the right direction!
What are the results you are working to achieve? Is it cash-flow, revenue, or customer retention? Whatever it is, make sure everyone in your organization is aligned to deliver it.
2. Focus on Culture
What’s the one thing that yields the greatest ROI for a growing business: 1) investors, 2) public relations and marketing campaigns, 3) sales strategy. The answer is none of the above.
The one thing that yields the greatest ROI for a growing business is time invested in employees.
Your people are your most valuable asset, period. They need and deserve time and attention. And if you want to create a lasting impact on your people, focus on culture.
Culture is not what’s written on a poster on the wall or on a shirt you hand out. Culture is how you and your employees think and act today in your organization. And it’s shaped by conscientious leaders who are intentional about who is hired, developed, and promoted.
The great Edward Deming shared this cutting observation after working and researching industry for a few decades:
“I hear people say they don’t have time for development, yet they have time to solve for the same problem over and over again.”
Go ahead, ask your people to be superstars, just make sure you invest in their development. Ask them to give customers world-class service, just be sure to give them world-class training.
Because when you focus on your employees, the results will come.
3. Focus on Feedback
The CEO of a global manufacturing organization recently said that he had been leading his team for five years and was frustrated that he didn’t feel more ownership amongst other members of the leadership team. He felt like he was doing it all himself and results were suffering with revenues declining.
At first, he was resistant to asking for feedback–but then he decided to give it a try.
As the feedback from his team poured in, he quickly discovered what was wrong: it was him. He was dominating meetings, not collaborating and no one felt like they could make decisions without him.
“I was operating with blinders on and didn’t see the mistakes I was making. My team saw them though and I didn’t hear about them until I asked.”
Challenging as it was, he set out to make changes and create a different experience for his team. The results were immediate: he felt more fulfilled as a leader, he felt like his team was operating at a different level–and for the first time in 2 years they turned in a profitable quarter.
Feedback should be something you receive every day from your customers, employees, peer groups, and mentors. If you have gone one day without receiving feedback, you are missing a golden opportunity.
Creating Results and Shaping Change
Now that you know why startups fail, beat the odds by remembering this: don’t try to do everything. Instead, focus on three things: results, culture, and feedback. When you do, you and your company can adapt, grow and thrive in the global marketplace–no matter how shifty it gets.
Read the original article published on Inc. Magazine: Data Shows Your Startup Probably Won’t Last without These 3 Things
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