The Frozen Hostage Entrepreneur

Damon has a problem. His staffing company is four years old and growing like crazy. Bottom line profits have doubled year-over-year since he launched the firm and several members of his team have been with him from the very beginning. Sounds like a dream story so far, right? But as I said, Damon has a problem. A key member of his organization, Mason, has become increasingly disruptive. Mason is in a position of leadership and works tirelessly – the business would not be where it is today without him. Unfortunately, the way he treats others is unacceptable. His approach is command and control. He bullies. He yells. And he threatens. Other members of the team go out of their way to avoid dealing with this individual and everyone walks on eggshells when they are forced to interact with him.

Damon isn’t blind to the problem. He has counseled Mason on many occasions. The result is always the same – an apology and a promise to change. But change is either short-lived or never happens at all. Within days he’s back to his old ways. Damon has offered to pay for therapy but is met with a benign sort of resistance. Mason agrees that he will consider professional help but never follows through to begin receiving it.

Recently Damon began thinking about making a change and terminating Mason. He considered all the chaos and hurt feelings caused by this person. But he also recognized that Mason has some unique skills not to mention important client relationships. On the one hand Damon knows that Mason has already caused the departure of several team members over the past 18 months. Yet, he worries that letting Mason go might cause the loss of certain clients. And who would be able to step in and have the domain expertise to function as effectively as does Mason? Damon doesn’t know what to do and as the days and weeks go by, the problems with Mason persist. This is a classic case of The Frozen Hostage.

In effect, Damon is allowing himself to be held hostage by Mason. And he’s frozen into a do-nothing position. Does any of this sound familiar? Many of us undoubtedly have similar situations that exist in our own organizations. We want to try and make things work to everyone’s satisfaction. We all want our “Masons” to turn over a new leaf and start treating others with the respect they deserve – then everyone will be happy. Not one of us wants to take that deep breath and plunge into the icy waters of our “Mason’s” exit. We are convinced it will be messy and painful. So, we procrastinate. And our inaction causes more suffering within our organizations.

I will be the first to concede that dealing with an issue like this is not pleasant. We develop loyalties, especially where we know someone has busted their rear to help us build our business. But eventually we cannot tolerate the behavior any longer and realize that we need to put an end to the madness – especially if our “Mason” isn’t interested in truly modifying his behavior.

The path toward “thawing out” the Frozen Hostage is straightforward. We need a plan. It starts with determining whether we can abide our “Mason” until we find a replacement for him. In either case, we must identify the process for finding the replacement. The plan includes developing a clear understanding of Mason’s role and accountabilities and looking for vulnerabilities. Then we tackle the vulnerabilities including technical skills and processes, as well as internal and external relationships. What is the timetable for implementing this plan? What is going to be announced and when? Who is going to cover the different roles and accountabilities on an interim basis after Mason departs? If we are lucky enough to surreptitiously hire his replacement, how are we going to ensure that our new team member hits the ground running without stumbling?

When we are the Frozen Hostage, we aren’t inclined to create this plan of attack. We just keep hoping that things get better, and we don’t have to take drastic action . . . except it never seems to work out that way. By forcing ourselves into the planning mode we begin the thawing process.

As leaders, becoming a Frozen Hostage causes serious morale problems within our organizations. Knowing that we eventually must take an unpleasant action, a logical planning process for replacing a key team member can make the path a bit smoother.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

The “Do You Know Who I Am?” Entrepreneur

The actor, Alec Baldwin, purportedly was riding his bike the wrong way near Union Square in New York and was stopped by police officers. After uttering some profanities, he produced this gem, “Don’t you know who I am?” We’ve all heard this before. Someone isn’t getting his or her way and so they play the “Don’t you know who I am” card. This statement is reflective of the ultimate entitlement mentality. Entrepreneurs are often on the road to success – sometimes in a big way. This success may lead to wealth, fame, and power. What it doesn’t produce is entitlement.

Let’s define entitlement a bit more clearly. There are certain circumstances where entitlement is perfectly legitimate. For example, suppose we pay through the nose to fly first class on an airline. There are perks that inure to our benefit when we pay extra for them. Similarly, if we pay a premium for a luxury automobile, there will likely be some special treatment that we receive at the dealership when we arrive for service. Again, we are entitled to this special treatment because we paid for it.

Now, contrast this with the guy who always parks his luxury car in a “no parking” zone. Or the woman in an expensive mink coat who cuts in line at the grocery store or the theater. Or in 2009 when a young woman ordered a hamburger in a fast-food restaurant and upon asking her name for the order, she replied to the server, “You don’t recognize me? I’m Miley Cyrus!” I don’t know about you, but I cringe when I witness this kind of behavior. This type of entitlement mentality is not the legitimate kind.

As leaders we’re role models whether we like it or not. Our team members are watching every move we make. If we happen to be in the public eye, there are many more eyeballs and ears that are taking notice of everything we are doing and saying. Oh, and they are judging us AND our organization at the same time. It’s one thing to have a great deal of self-confidence and assertiveness – this is entirely necessary to succeed in today’s rough and tumble world of commerce. But the line is crossed when that self-confidence and assertiveness becomes boorish, arrogant, and aggressive.

The whole issue is one of self-esteem. The way we see ourselves comes from within and not from the outer. It’s probably no secret that people who are shoving their fame, fortune, or power in the face of others, are acting from a feeling of low self-esteem. Sometimes the resulting sense of misplaced entitlement leads to destructive actions such as heaving drinking, drug use, gambling, extramarital affairs, and other sorts of outrageous behaviors.

There’s absolutely nothing wrong with driving a luxury automobile, wearing expensive jewelry, and clothing, or being on a magazine cover. It’s how we feel about ourselves and how we treat others that matters most. Country singer Dolly Parton is one of the nicest and most humble mega-stars on the planet. Soccer star David Beckham is super polite, and actress Jennifer Lawrence is known for being very down-to-earth and easy to work with. There’s no doubt that all three are members of the rich and famous class. And yet they aren’t overcompensating for their insecurities (and they may not have any) by displaying an attitude of entitlement. They, and many others like them are gracious and put others first.

Our station in life is not a rung on a ladder. Instead, it’s simply a steppingstone that is part of a long and winding journey. Each of us is on a similar journey. When we offer a helping hand to others our lives are enriched.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

The Work-Life Balance Entrepreneur

We’ve all heard the constant drumbeat over the last several years about work-life balance. It’s the notion that we must find a healthy equilibrium between our work and everything else that is occurring outside of work. It’s an admirable and noble goal and certainly achievable . . . to a point. I don’t mean to burst the proverbial bubble, but there are situations where it just isn’t going to happen. Let me explain.

When I joined my company in 1975, we were a fledgling organization founded just five years earlier by an entrepreneur’s entrepreneur. We were scrapping and clawing our way to success. The competition was fierce, and we were in a “take no prisoners” industry. Back then you did whatever it took to win and keep business. I worked 100+ hours a week. I remember arriving at the office at 3:00 AM to get a head start on the day and would routinely see one of my partners leaving at the same time to go home and get a few hours of sleep before tackling it again later that morning. I still recall being at the office on New Year’s Eve at 11:30 PM working on an important proposal that had to be in the hands of a prospective client at 8:00 AM on January 2. We didn’t complain; we didn’t whine; we weren’t even aware of the term “work-life balance.” When our children were born, the juggling act became even more acute. I’m proud to say that I never missed any of my daughters’ school or sporting events though I know there were mad dashes at times to be present.

What would have happened if we had not worked the crazy hours and made the sacrifices along the way? There’s no way to know for sure, but I suspect that we would have missed opportunities and our company would not have grown and succeeded the way it has. Early on, I skipped vacations. I loved what I was doing, and my wife was immersed in her career. Did I feel like we were deprived of a more satisfying life at that point? No. I had a long-term view that if we invested heavily at the beginning of our lives, we eventually would be able to enjoy the fruits of our labor later in life. And this was not about “paying my dues” as a young whippersnapper. I never saw it as a climb up the corporate ladder. It was 100% about building a profitable business that was sustainable for the long haul.

Which brings us to the environment today. I’m thrilled that members of our team do not have to work 100+ hours a week. I’m ecstatic that members of our team can spend more time with their families and friends and have healthy interests outside of the business. But I can guarantee that if we were starting from scratch, someone would find it necessary to do exactly what we were doing in the 1970s and 1980s, and that is work long hours with a singular focus on long-term success.   

The bottom line is that in start-up situations, it’s going to be very difficult to experience today’s definition of “work-life balance.” If you are an entrepreneur and thinking about starting a business, I encourage you to not do so if you are unwilling or unable to make significant sacrifices to establish your enterprise successfully in the marketplace. You would be better off working for a company where someone else has already made those sacrifices that have led to a high level of achievement. Fortunately, my story is a happy one. I have been able to integrate multiple facets of work and personal interests into a wonderful and fulfilling life. I don’t compartmentalize work, philanthropy, family, friends, civic, etc. Everything blends together. But it would not have been possible had I (and others in the organization) not invested my time and talent in an extremely focused manner many years ago.

Work-life balance is possible in the right situation. For an entrepreneur desiring to launch a new endeavor there must be a recognition that there will be large sacrifices regardless of how smart one is able to function.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

The Warren Buffet-Listening Entrepreneur

We all know that life is full of risks. Some are more serious than others. I hold the view that I’d rather “manage” risk than “take” risk. I’ve said before that taking a risk seems a bit arbitrary. “Gee, I think I’ll try to run across this eight-lane expressway right now!” Sounds silly, right? But in a way, that’s what taking a risk seems like to me. While it may not be as spontaneous as this overdramatized example, taking a risk feels like gambling. Meanwhile, managing a risk is calculated. It is studied and planned. Risk mitigation strategies are developed. If I’m to run across the eight-lane expressway, I’m going to figure out every possible way to do so as safely as possible. That’s risk management.

One very important element of risk management is a concept that was espoused by one of the most revered investors of all time, Benjamin Graham (1894 – 1976). And this concept is practiced today by his acolyte, Warren Buffet. The concept is that of margin of safety. Entrepreneurs absolutely must understand margin of safety – but every member of society would benefit from practicing it as well. Graham and Buffet narrowly defined margin of safety as the difference between the intrinsic value of a stock and its market price. I look at margin of safety on a broader basis and define it as the difference between success and failure. In some cases, this difference can be razor thin, and in others, it can be as wide as the Pacific Ocean. The key is to take the steps necessary to push the margin as wide as possible.

In our businesses, organizations, and lives in general, we have an opportunity to become expert at creating margins of safety. One of our companies purchases apartment properties. Because we tend to hold these assets for five to seven years or longer, there can be a great deal of uncertainty about the future. What can we do to stack the deck in our favor and create a healthy margin of safety when we’re looking so far down the road? Obviously, we make year-by-year financial projections that are based upon a set of assumptions. Those assumptions include rent levels, rent increases, operating expense levels, expense increases, occupancy percentages, rates of return on which a sale price can be calculated and various aspects surrounding debt financing. The Excel spreadsheet is quite comprehensive with all these assumptions and projections – but how do we overlay a margin of safety on the process?

With one of our properties, we obtained a certified appraisal as a part of the due diligence process that indicated a value $3 million higher than we paid for the property. That’s a margin of safety right there. Perhaps we budgeted an initial increase in rents of $110 after making several physical improvements but were able to achieve $200. Our assumptions might have anticipated a stabilized economic occupancy of 91%; but we were able to operate at 93%. Operating expenses may have been right on the money, but rent increases averaged 3.25% each year rather than the 3% that we had forecasted. And remember our baseline started $90 higher than the $110 initial increase that was projected. In summary, we pushed several levers to create several different margins of safety that when combined, produced a much better bottom line throughout the holding period than expected. In so doing, we are better protected from market factors that could degrade the future value of our asset.

The principal takeaway here is to find as many margins of safety as possible. If we make decisions based upon 100% optimal results, there’s no room for error. Then a blip in the market or a miss with operations could mean failure. I have learned the hard way that if there’s no way to create sufficient margins of safety, the risk I am contemplating may be too difficult to manage. So, I move on to something else.

Developing the concept of margin of safety is an exercise in positive thinking. We are looking for ways to increase the probability for success – and that’s always a good thing.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

The Entrepreneur’s “Reasonableness” Test

Some time ago while vacationing, my wife and I had the occasion to dine at several restaurants that we have enjoyed over the years. Something happened at two of them that was somewhat of a surprise. Here’s what occurred. At the first restaurant we had been told by a nearby merchant that a particular dish was extremely good. Naturally we wanted to partake, only to be told by the waiter that this item was only available on the bar menu. I told him that we were willing to pay an upcharge, if necessary, to enjoy this seemingly delectable delight. No dice was his reply. He went on to spin a tale about how the kitchen was too small to serve both the bar and the dining room. The explanation was not remotely plausible.

We had enjoyed a scrumptious dinner at the second restaurant and were attended to by a very outgoing server. The entrée I selected had a side dish that I didn’t prefer, and I asked if some sliced tomatoes could be substituted. This was done without issue and the service was impeccable. Roll the tape forward a week with a different server but the same entrée. Again, I asked for sliced tomatoes and was very abruptly informed that the chef was not going to accommodate my request. This server (a bit on the snippy side to begin with) said that there had been quite a conversation with the chef about such a substitution and he wasn’t going to slice any tomatoes.

In both situations, the desires of the customer were secondary to the desires of the restaurants. In both cases, I wrote social media reviews pointing out that the operational efficiencies of the eateries were apparently more important than offering a memorable customer experience. And as I thought about it more, I realized how often this approach is taken by many businesses. But why?

We’re in the day and age of creating customer experiences. No longer is it just about selling a product or service. I’ve advocated for years that we should avoid “selling to” customers (product-centric) and help customers “buy from” (customer-centric). Helping people buy something provides us with an opportunity to create a more tailored and pleasant experience – something they might mention in a positive manner when speaking with friends and family . . . or posting on social media. Both restaurants failed the test. The food was so-so at the first establishment but truly amazing at the second. Yet, the wonderful cuisine was overshadowed by the negative experience of a chef who apparently was throwing a hissy fit for unknown reasons. I would have certainly understood if the tomatoes were of poor quality and that had been explained to me. And while the chef may have had a limited supply of tomatoes to be reserved for other dishes that included tomatoes, there is a fabulous modern-day invention called a “grocery store.”

I eat breakfast regularly at a restaurant where the proprietor often makes a run to the nearby grocery store when she runs low on a particular food item. The last thing she wants to tell a customer is that she is out of something and can’t accommodate a request. The upshot of all of this is to pause for a moment and look at our own operations. Are there things we can do to make sure we are creating a positive customer experience? Do we have systems and processes that are designed to make our operations more efficient and profitable, but could potentially stand in the way of putting a smile on the customer’s face? Are we a slave to rigidity and adherence to a very precise “recipe?” Perhaps we should consider applying the “reasonableness test.” In other words, is the request of a customer reasonable or not? If it is, we should accommodate it to create the desired experience. If I had asked for Baked Alaska, that probably wouldn’t have passed the “reasonableness test.” But sliced tomatoes?

Entrepreneurs can differentiate themselves by working to create a memorable customer experience. This can be accomplished by developing a reasonableness test when it comes to customer requests.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

The Angry Entrepreneur

When I was a kid growing up it seems like my mother was always cooking something in a pressure cooker. I have no recollection of exactly what food she was preparing; I just remember the mystique of the pressure cooker. I think I must have been warned that there was an inherent danger with this device, and I never wanted to stand too close. It’s possible that I was told that the thing could blow up at any second and I would be maimed by flying shrapnel, pork chop bones or some other lethal object. In retrospect, I think this admonition was one more way to keep me out of the kitchen while Mom was cooking dinner.

Anger is like the pressure cooker. It can simmer for a while and then seemingly explode in an unpredictable manner. From a physiological standpoint, the amygdala is the part of our brain that is the culprit. When the amygdala sounds the alarm to the body that something is present that will make us angry, our adrenal glands start pumping and testosterone is also produced. We begin speaking in a louder and more rapid voice. Our muscles tense, our cheeks flush, and our heart beats faster. Anger is the ticket to higher risk for heart disease, and it also accelerates the aging process as well as decreases lung functions. Pure and simple – anger isn’t good for us.

Here’s the thing. It takes a superhuman effort not to get angry, especially when things aren’t going as planned. Now think about leadership and anger. Is there a productive correlation? The answer is obvious. To be strong and effective leaders we must curb our temper. Perhaps we’ve experienced the type of boss who has a hair trigger. When he goes off the meltdown is epic. His face gets beet red. He yells and screams. There may be a plethora of profanities laced throughout his diatribe. In extreme cases he may even shove files and papers to the floor or even throw something. What is the usual result of such a tantrum? There’s a general feeling of embarrassment and a specific sympathetic reaction to the party that is bearing the brunt of the boss’s emotion. Everyone keeps their head down and makes a detour away from the boss for the rest of the day. Overall, morale is destroyed. Fear is palpable. Is there any silver lining here? The simple answer is no.

If all the preceding is true, what is the point in getting angry? You guessed it – there is none. Do we truly feel better after we get angry? Do we enjoy the headache that ensues, the elevated blood pressure, and increased anxiety? I’ve worked for decades at “lengthening my fuse.” Those who have known me for a long time can attest to the fact that I rarely get mad anymore. This doesn’t mean that I’ve become a pushover. I’ve just learned that the toll that anger takes on my colleagues and me is just too high.

Here’s what I’ve discovered. When something is about to trigger an anger response, I recognize the need to become stoic. A stoic is defined as “a person who can endure pain or hardship without showing their feelings or complaining.” Think Mr. Spock in Star Trek or Andy Dufresne in the Shawshank Redemption. I have also come to realize that maintaining a positive mindset in every circumstance is critical to problem solving. Anger is a negative emotion and does nothing to get to a solution. This doesn’t mean that I don’t feel disappointment or even a momentary flash of “extreme dissatisfaction.” But staying in such a feeling is poisonous in every respect and is not the way I want to model for others.

Temper tantrums are for little kids and are usually best ignored. The best leaders control their emotions and help their team move in a positive direction no matter what.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all the other major eBook formats.

The Law of Attraction and the Entrepreneur

Gil Penchina is a 25-year angel investor in start-up companies. He was one of the earliest members of the eBay team and has invested in unicorn companies such as LinkedIn, Dollar Shave Club, PayPal and Cruise Automotive. I heard him tell a fascinating story about what he sometimes does when he’s traveling. He posts on Facebook that he’ll be away and offers his apartment to whoever wants it. Total strangers are often staying in his apartment – and have been identified not through a formal Airbnb arrangement! He’s done this 15 or 20 times and simply asks that the apartment be left clean, and the bed linens and towels put in the washing machine. Only once has he been burned and that was by one of his cousins. Why would he do this? As Gil tells it, he believes that people are inherently good, and he doesn’t believe they will harm his property.

How many times do we “look for trouble?” Do we have expectations that someone is going to try and take advantage of us? I’ve known many people who always have their guard up. They truly believe that if they don’t aggressively take protective action that they are going to be screwed. I’ve worked with people who spend more time trying to figure out how they are getting the short end of the stick in a transaction than time spent figuring out how to optimize the deal. Guess what? This mindset can become a self-fulfilling prophesy.

I believe as does Gil, that most of us operate in good faith. Sure, there are bad people in the world – I’m not naïve enough to deny this. But the number is infinitesimally small, and I will do nothing to seek them out. I’ve said it many times that I’m going to put as much Good out into the world with no expectation of getting anything in return. What I’ve always found is that Good comes back to me, often beyond my wildest dreams. While there’s no quid pro quo for specific actions, I know that as I am doing Good, I will attract Good into my life. This is applicable to business, personal relationships, our health, and all other facets of our existence.

Let’s be clear about something. This isn’t about blithely skipping down Candy Cane Lane oblivious to obstacles and pitfalls. When we believe in all Good, we manage risk such that we aren’t worried about bad things happening. Why? Because we have a mitigation plan in place that we methodically work through if the unexpected occurs. Simply planning for risks does not mean we think they will come to fruition. It gives us the peace of mind to know that we can successfully deal with them and allows us to devote our time and energy to the positive aspects of whatever we are doing.

In my 46+-year career I can count on one hand the number of times someone has maliciously taken advantage of me. Conversely, I know many businesspeople who are constantly embroiled in lawsuits and always complaining about how awful others are to deal with. I guess I must be running in the wrong circles because I just haven’t encountered that many of those kinds of people.

Several years ago, we were purchasing an apartment property and placed a large amount of earnest money in escrow. During our due diligence process, we found some issues that were unacceptable, and we informed the seller that we were cancelling the contract. The seller wanted to fight over returning our earnest money and we spent a few dollars on lawyers before settling with him. He received less than 50% of the earnest money and we moved on. All of us believed that the seller was acting in bad faith, and we could have endured a long protracted legal battle and won. But to do this would have required a huge expenditure of negative energy and prevented us from pursuing other positive opportunities. It turned out to be a minor blip in our process and was soon forgotten.

The Law of Attraction is a powerful force in our lives. When we think positive thoughts and do good things for others, we attract the same for ourselves. Negative thoughts and negative actions are also attractors. The choice is easy to make.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

The Entrepreneur Saboteur

We’ve all seen the World War II movies where U.S. soldiers crept behind enemy lines and blew up bridges, tunnels, and other elements of infrastructure. We hold our breath as our boys used cunning and guile to defeat the Germans at every turn. This was classic sabotage at its finest.

Would you believe that entrepreneurial leaders can sometimes be saboteurs too? Are you wondering how? Consider this. Nathan owns an internet marketing company with 24 employees. He has a couple of up-and-comers on the team. Nathan is a strong, hard-charging Type-A personality and is quite a taskmaster. He seldom expresses his gratitude to his rising stars. Instead, he can be hypercritical at times. Nathan claims that he is simply trying to push his best and brightest to excel. Because of his sense of urgency, he tends to issue instructions in a rapid-fire manner. When mistakes are made, Nathan becomes impatient and can even unleash a tirade that is directed in a very personal manner. His colleagues do not want to bring him bad news – it’s not that they don’t want to let him down, but because they fear his wrath and tantrums. On the other hand, he can be witty and charming. And his company has achieved enormous success.

By contrast, Amanda started a consumer products research firm while she was in college and has watched it grow over the past five years to 35 employees. Amanda is also a high-achiever and a similar Type-A personality. She sets lofty expectations for her team, and they respond by meeting or beating their goals every quarter. While it’s clear that she’s the boss, team members love Amanda’s collaborative style. Even when a mistake is made, she remains positive and upbeat while counseling the errant employee. Amanda never berates anyone and is always supportive. She’s no pushover either – if certain employees continue to underperform, she will show them the door. During a 360 review, the most common statement made about Amanda is, “I always feel that she values my contribution.”

The difference in leadership styles between Nathan and Amanda is very stark. They are both generating eye-popping results, but their paths are totally divergent. Nathan is a saboteur and is succeeding despite his approach . . . for now. But like a Roman candle that pierces the night sky, eventually it flames out and disintegrates. Nathan’s company is always in a state of upheaval. Drama is occurring at every turn. Employee turnover is high and if it weren’t for his two blossoming lieutenants keeping everything together, the whole enterprise would blow up. When the boss constantly undermines his team the implosion clock is ticking.

Strong leadership – the kind demonstrated by Amanda – begins and ends with positive encouragement. A calm sense of urgency replaces the chaos, and team members do not fear for their sanity (or safety!) when a failure is experienced. The basic premise is easy to understand. Are people more motivated to succeed in an upbeat and encouraging environment, or one that is negative and subjects people to personal embarrassment?

The legendary Steve Jobs of Apple fame was an awful boss. Ramon Henson, an instructor of Management and Global Business at Rutgers Business School wrote this about Jobs in 2011. “It is well-known that Steve Jobs could be arrogant, dictatorial, and mean-spirited.  Despite the observations of some about Mr. Jobs’ arrogant style, I believe that he had at least three qualities that great executive leaders have: a clear vision, a passion for the company and its people, and an ability to inspire trust.  This is what I would consider his leadership character. In fact, Mr. Jobs not only had a vision, but he also made sure that everyone in the company bought into that vision, and this created a ‘higher purpose’ for the company that really excited Apple employees. Of course, his passion for the company and its products is legendary. And employees trusted Mr. Jobs – not because he founded the company but because he showed time and again his competence in many areas, especially product design and marketing.  And because employees saw – through his behavior – that Mr. Jobs was not driven by his own ego or by some self-interested needs (like the outrageous pay packages of some executives), they trusted him. So, if Mr. Jobs was at times arrogant, even nasty, employees viewed these behaviors in the context of these underlying qualities.”

I believe Steve Jobs was an anomaly as a leader. That Apple achieved great results while enduring his leadership style is a testament to this outlier notion. In other words, “don’t try this at home.” The probability of success is exponentially higher when creating an environment of positive encouragement than one of daily sabotage.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

The Failed and Defeated Entrepreneur

What two words in the English language couldn’t be further apart in their meaning, but are often intertwined for entrepreneurs? The first word by itself is part of the everyday life of an entrepreneur – and every other person in the world as well. This word is relatively innocuous. But when connected with the second word it’s like adding the primer to dynamite. The resulting explosion can have all sorts of detrimental effects on our lives.

That first word is “failure.” Many entrepreneurs (and others) fear failure. But successful entrepreneurs have almost always experienced failure in different ways and multiple times. They use their failure to recalibrate or pivot and find a new way to make something work. David H. McConnell was a door-to-door book salesman who offered a little gift of perfume to female customers. Selling the books didn’t work out so well, but there was great demand for the perfume. So, McConnell ditched the books and turned the perfume concept into what is now known as Avon. Ever heard of Traf-O-Data? It was a partnership between Bill Gates and Paul Allen for the purpose of developing reports from traffic counters for traffic engineers. The business was not a success. But Gates went on to launch another venture called . . . Microsoft. And then there’s the famous story about a man named Fred Smith who wrote a paper for his Yale University economics class involving overnight parcel deliveries. The professor wasn’t impressed and gave him what Smith recalls was a C. Undaunted, Smith pursued the idea which today is known as Federal Express.

This brings us to the second word. The word is toxic to entrepreneurs for it can easily become a mindset. The word . . . “defeat.” Failure is part of a process of experimentation and discovery. Defeat is the end. Once defeat is admitted, there’s nothing more to be done. I knew a man who worked for someone else for several decades. Then he decided to spread his entrepreneurial wings and bought a business. He labored mightily but eventually had to close his doors. But rather than lean into the experience and use it as a steppingstone to success, he withdrew. His confidence was shaken, and he began making unhealthy choices. He tried working for someone else again but eventually ended up driving a taxi. Now there’s nothing wrong with driving a taxi if it’s for the right reason. But in this case, it was his way of curling up in the fetal position and saying, “I can’t.”

I think that it boils down to whether we have a “die trying” mentality. It boils down to whether we have a positive image of ourselves. It boils down to moving as fast as we can to kill our own bad ideas so we can make room for the good ones! When we are afraid to fail, we are setting ourselves up for defeat. One of the most important things about failure is making certain that it’s not so monumental that we can’t right our ship. A mindset of defeat occurs when we are convinced, we’ve lost it all – forever.

Here’s what I’ve learned. I don’t set out to fail at anything but accept the fact that I will, and I must, if only to find the good ideas that work. I always make sure there’s enough of a margin of safety that my failures aren’t going to “kill” me. This leaves room for a pivot or a more significant shift. Regardless of my failures I will always remain positive and optimistic. Sometimes this can be very hard but it’s fundamental to avoiding defeat. When I do fail, I look for what can be salvaged from the experience to bolt onto the next iteration of whatever I’m doing. And finally, I know that I’m a step closer to success by eliminating a step in the process that didn’t work.

Failure and defeat are not connected in any way, shape, or form. Great opportunity and great success can rise from failure. Nothing good comes from defeat.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

The Self-Defeating Entrepreneur

My beloved Kansas City Chiefs NFL football team did not go to the Super Bowl on February 13, 2022. They were maddening to watch during the season and through the playoffs. The talent on the team is off-the-charts incredible. For four straight seasons, they played in the AFC Championship Game, two Super Bowls, winning one. Why didn’t they advance to the Big Game in 2022? Very simply – they beat themselves. They lost several games during the regular season by beating themselves. But the AFC Championship Game versus the Cincinnati Bengals was the ultimate demonstration of this self-defeating notion.

The Chiefs were ahead 21-3 well into the first half and clearly were stronger and faster than the Bengals. The game should have been a blowout for the Chiefs playing in front of their home crowd in the loudest stadium in the world. And yet, they lost by a field goal in overtime. How did this happen? At the end of the first half, it was first and goal on the one-yard line. Rather than bulldoze the ball into the end zone, they misfired a couple times and used their last timeout. On third down, the quarterback swung a pass to a receiver who was well-covered and tackled behind the line of scrimmage as the clock ran out. All the QB had to do was throw the ball away and bring on the kicker for a last second field goal. Instead, the momentum swung away, and the team was shell-shocked coming out of the locker room at halftime. In the second half, the Bengals dropped eight men in coverage and rushed three defenders. Rather than take advantage of this situation by running the ball, the Chiefs proceeded to continue passing – unsuccessfully – resulting in multiple punts and interceptions. Cincinnati grabbed the momentum and ended up winning the game and going to the Super Bowl. Had Kansas City made slight adjustments and played its game, there is no question that they would have won in decisive fashion.

What transpired at Arrowhead Stadium in Kansas City on January 30, 2022, was a classic case of Self Defeat. And this is something that some entrepreneurs tend to do every day. We go on a winning streak for a while and think we have it all figured out. Then we get cute and cocky one day, or we shortcut the basics and fundamentals, and voilà – we hit the wall. This may be followed by “locker kicking” or rants about how the deck was stacked against us, or a competitor played dirty pool. But in the end, we beat ourselves. Had we followed our game plan and made the adjustments necessary we would likely have continued to win.

How do we avoid the Self Defeat Trap? We must never take our success for granted. We work hard to succeed and just when we believe that it is going to be easy, we stub our toe. Perhaps we made it a practice to regularly write notes of gratitude to our key customers and check in with them by phone periodically. Then things seem to be going well and we stop sending the notes and making the calls. The next thing we know, a major customer has walked out the door – not necessarily because we stopped with the notes and the calls, but because we stopped paying attention and missed signs of dissatisfaction. We must reinforce the basics and fundamentals that led to our success and always keep them front and center.

Then, we must look for how and when we need to adjust our approach. If we simply continue to power along the way every day, we may beat ourselves because we missed subtle signals that would have told us an adjustment was in order if only we had watched for them. Back to the previous example. Maybe the notes of gratitude and the check-in calls worked just fine for several years. But on one such call the customer mentioned that he’d love to see us in person someday. The smart entrepreneur gets on an airplane and goes to visit the customer in-person. The Self-Defeating entrepreneur doesn’t pay attention to what the customer said and continues sending notes and making phone calls. Then a competitor waltzes in to see the customer in-person and the rest is history.

We entrepreneurs can stop beating ourselves if we avoid taking our success for granted, maintaining a disciplined approach to the basics and fundamentals that have enabled us to win, and paying attention to the signals that tell when to adjust our strategy and tactics. If we do this, our chances of winning our own Super Bowl will increase exponentially.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.