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A decade ago, I ran a business that spiraled out of control. The company’s investors were people close to me, and they got badly burned. Even though many people contributed to the company’s demise, as the company’s leader, I was found responsible (something I accepted). It was the lowest point in my professional life.
Like many entrepreneurs, I now realize that failure is often a necessary predecessor to success. Of course, I wish things had gone differently, but I now see the mistakes I made and have embraced the gift of learning from my errors.
At the time, I looked past the company’s visible shortcomings, believing I could fix them. But, there are certain truisms about running an organization that hold firm. Things that — no matter how talented or hard-working you are — cannot be fixed. These truisms seem simple, but they are difficult to adhere to, especially if you believe that most people are well-intentioned.
I lost relationships, suffered bankruptcy and weathered a nasty lawsuit along my journey. I also gained humility, self-understanding and a reclamation of my values. Painfully discovered, here are five learnings that can help you avoid failure and achieve entrepreneurial success.
Related: 5 Survival Tips for Entrepreneurs Hitting Rock Bottom
Deal in reality
Are your decisions guided by reality? Do you act on red flags (or ignore them)? How thick are your rose-colored glasses?
Embracing reality is one of the most determinative skills of a business leader. The facts may not be ideal. Hope can be comforting. Dreaming can be exciting. However, reality exists in the present. And that’s where you are, like it or not.
Reality is transformative. It enables the formulation of solutions. The ability to admit something or someone is not working out and deal with it decisively is true leadership.
Dealing in reality also requires an honest assessment of one’s talents. Choosing the appropriate lane is not just about what one likes to do. Superior leaders know themselves and focus on what they do well. They choose a lane and stay in it. Similarly, they empower and guide others to stay focused on what they do well.
Organizations suffer when the CFO wants to do branding, or the general counsel wants to do PR. Particularly in startups where people are praised for “wearing many hats,” this lack of awareness promotes mediocrity and often fails.
Moreover, not everything broken can be fixed; it doesn’t matter how much effort is exerted. The same can be said for people; sometimes, individuals are uncoachable and must be let go.
Being a fixer can be noble and impactful, but the best fixers recognize that some problems don’t have a happy ending. They know when they have reached a point of diminishing returns.
Trust, like anything else of value, requires careful maintenance
What makes someone trustworthy? Would you personally vouch for them? If not, why not?
Because trust is earned, it can be lost in an instant. Once lost, it can be difficult (if not impossible) to recover. Trust is the basis for lasting relationships, and its ephemeral nature takes work to maintain.
Trust does not flow from a great pitch, investment check or impressive pedigree. Trust arises from honest human discourse. It builds or erodes over time. No matter how you slice it, business is about people. If you want people to believe in your business, they need to trust you as an individual.
Because people’s trust in you needs to transcend your professional abilities, you must stay true to yourself no matter the context. Your integrity depends on it.
Related: How I Know Who to Trust in Business
Listen to your inner voice
Is something or someone rubbing you the wrong way? Does something you’re being told feel wrong?
Not every decision can be made based on data or game theory. Some require intuition. Listen to your inner voice. What is it telling you about a particular decision? Don’t cram down those feelings; explore them. Build a trusting relationship with yourself. If an action concerns you, trust that your apprehension has some validity and examine it.
Questioning your internal reactions and attuning to your internal warning system will make you a better leader.
Transparency is key to effective leadership, so make a habit of over-communicating
Do you share good and bad news? Is everyone being kept in the loop?
It’s counterintuitive, but bad news can create good outcomes. Communicating with others about bumps and pitfalls, aspirations and accomplishments, opportunities and successes builds trust and rallies the team around a common purpose. Great leaders share bad news — the product failed, we missed our target, we hired poorly, or I made a mistake. They appreciate that knowledge is a power that’s best shared.
Alignment requires transparency. To be on the same page, direction and purpose need to be shared with all. Moreover, quality leaders appreciate that some people are personally dedicated to an organization’s vision. In contrast, others may be narrowly focused on how a job benefits them, and that’s okay. But, assuming someone’s alignment can be a disaster. Instead, ask questions and communicate openly.
Own your actions
Did you do something wrong? Did you forget to do something important? Did you delegate something to the inappropriate person?
If you’ve done any of these things (we all have) — take corrective steps immediately.
Gravity, in the metaphorical sense, does not exist in companies. Responsibility actually rolls uphill. Consequently, strong leaders are accountable for their actions and the actions of those around them. Effective leaders are accountable when their team members fail to perform.
That being said, only you can control you. No one else gets to tell you how to live your life. No one else gets to decide what has meaning to you. Investors and stakeholders may inform your decisions, but their opinions shouldn’t be a substitute for your own knowledge or values.
Strong leaders know what and whom they value. They bring this knowledge to every decision they make.
Related: 4 Steps to Reinventing Yourself After Hitting Rock Bottom
Next steps
I’m now on a journey without a final destination. What’s clear is that continuous learning is imperative for growth, healing and improvement. I am better today because of the difficult road I’ve traveled. I am now only focusing on what I’m especially good at–business development, strategy and relationship-building guided by empathy, humility and the personal values I’ve promised myself never again to betray.
Walking your talk is important. That’s why I’ve chosen to start publicly speaking about my mistakes and owning them. On the journey to becoming a better leader, I’ve realized the importance of knowing your purpose and living it daily.
Don’t repeat my mistakes. Know that you are your own north star; trust your instincts, live your values and stay firmly grounded in the present moment.
