I met recently with the Techstars Mobility Class of 2017 in Detroit. This is a group of young, smart entrepreneurs building startup companies in a bustling, collegial war-room type environment. What they wanted from me, of course, was insight on how they as budding leaders could help their nascent companies survive and thrive in an age where 50 percent of all startups fail within five years.
There is no secret sauce, of course, or all startups would succeed. But in my experience there are traits common to the best leaders of businesses of any size. Chief among them is the ability to connect employees and customers to their company’s larger purpose. Great leaders understand that while making money is certainly the goal, it’s not a company’s sole reason for being. Employees don’t consistently go above and beyond just to make a product. Nor do customers flock to buy that product if there’s not that emotional connection to a higher purpose or story.
To create that connection, a yogurt company, for instance, might focus not just on taste or price but on how yogurt helps keep you healthy and trim so you can better focus on your family’s needs. Patagonia, the outdoor clothing outfitter, talks about its high-quality products but also about its deeply-held corporate commitment to the environment. At my company, Hagerty, our story is that, yes, we provide top-quality insurance and frictionless service to vintage vehicles owners the world over, but we’re also passionately devoted to preserving and expanding America’s love affair with cars and driving.
The best leaders also:
1) Are habitual learners. They improve their companies by improving themselves, and they set personal as well as business KPIs. They encourage others to be active learners as well. Nothing pays off like knowledge. As Warren Buffett is fond of saying, “Ultimately, there’s one investment that supersedes all others: Invest in yourself. Nobody can take away what you’ve got in yourself, and everybody has potential they haven’t used yet.”
2) Set the rhythm and pace for the entire organization. For startup owners, establishing this rhythm early on is fundamental. Will you focus on fast growth or is steady, long-term growth the goal? Do you want to be a serial entrepreneur – creating a lean, agile company with relatively few employees that is easy to sell? Or is your goal to build a scalable business requiring lots of people? How about your company culture – will you encourage daily employee huddles to facilitate alignment, buy-in and ground-up thinking? Or will you go with a more old school approach? It’s all up to you. The best leaders, however, do not leave these questions unanswered.
3) Create an environment of trust through transparency that results in more engaged employees, faster problem-solving, better retention and higher job satisfaction, all of which impacts the bottom line. In this era of declining trust, employees need to know what’s expected of them and that good work will be acknowledged. Create that trust and your company will reap the benefits.
4) Have grit. Starting a company is tough, and there will be plenty of challenges and setbacks along the way. The key to success is not to worry about the inevitable and instead focus obsessively on delivering value to your customers. That’s how you win.
5) Enjoy the ride. They remember that business is fun and that great businesses can transform the world.
My thanks to the entrepreneurs at Techstars Mobility. With them in the driver’s seat, I can’t wait to see what the future holds.