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For Passion to Survive

Most entrepreneurial organizations are born from a genuine passion. When a company is in start-up mode, that passion is often times all it takes to get an idea or a new business moving forward. But then what? How is the business sustained? How does it scale? How does it navigate future uncertainties?

Depending on whose statistics you accept as accurate (I am using numbers from the SBA, Forbes and Bloomberg in this example), between 50 and 60 percent of new businesses fail within their first five years, and around 75 to 80 percent do not make it to the 10-year mark. A quick internet search for why businesses fail will turn up dozens of different reasons…everything from running out of cash, poor accounting, bad hiring decisions, declining markets, dysfunctional management, and many more.

I would argue that each of those reasons, and the many more that are often cited, are actually symptoms of a deeper issue. When I work with entrepreneurial clients, I am constantly pushing them to dig deeper in their effort to uncover issues at the root. When we spend our time solving symptoms rather than the root issue, the symptoms keep coming back, and we find ourselves constantly dealing with the same problems over and over again.

Simon Sinek, I think, says it best in his book “Start With Why,” when he writes, “For passion to survive, it needs structure.” Think about that combination for a minute. If you can combine a high level of passion with the structure necessary to bring discipline, accountability, and focus into the organization, then you have the foundation for a lasting organization.

The most fundamental place to begin to build structure, whether an organization is a small, new start-up, or a 10-year-old, mature business, is with its people. To begin, draw an “org-chart” of your current structure. Is sales and marketing one function, or is it split into two functions, one for sales and another for marketing? What about operations – how you make your product or deliver your service? Is there only one operational function in your business, or do you have multiple operating divisions? On to finance…the finance function often contains not only accounting, but also HR, and perhaps IT; other times those are split out as separate functions.

Each of the “seats” that you created from the step above should be spread across one tier of the org-chart. These are the seats that make up your leadership team. As you think about where you are today, and looking at the structure of your org-chart, ask yourself where there are deficiencies and where there are issues with capacity – meaning seats that are too big and have too many responsibilities for the person occupying that seat.

Next, think about where you would like your business to be in six to 12 months. Looking back at the structure of your org-chart, is that structure going to get you there? Where might there be issues, especially with over-capacity or missing abilities and skill sets, six to 12 months from now? Where might you need to add a new seat, or split an existing seat into two separate roles, in order to handle future growth?

Often times I find that as entrepreneurs, we spend so much time with our head down and shoulder to the plow, that we miss the opportunity to effectively predict where we are going and what obstacles might be in our way, especially internal obstacles. Focusing on the structure of your organization, and revisiting it at least annually if not quarterly depending on your rate of growth, is an important first step to setting yourself up to successfully breaking through potential ceilings as you grow.

Michael Erath, founder of SMART Direction LLC, is a life-long entrepreneur and owner of multiple businesses who now also helps other business owners and their Leadership Teams get everything they want out of their businesses by implementing the Entrepreneurial Operating System as a Certified EOS Implementer. The Entrepreneurial Operating System brings clarity, vision, focus, discipline, accountability and team health into organizations of all sizes and in all industries. For more information, visit www.SMART-Direction.biz, or call Michael at 855 2 EOS PURE / (855) 236-7787.

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