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Traits Characterizing Rapidly Growing Companies

• High levels of change, ambiguity, and uncertainty

• Ongoing succession of nonlinear and nonparametric events

• Inexperience of management team

• Rapid Growth and Disruptive Technology

• Counterintuitive, unconventional patterns of decision-making

• Informality and fluidity of organization structure and procedure

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Characteristics of Successful Leaders

Entrepreneurs skilled in leadership, vision, and influence• Skillful in creating clarity out of confusion, ambiguity, and

uncertainty• Able to define adroitly and gain agreement on who has what

responsibility and authority• Manage in a way that builds motivation and commitment to

cross-departmental and corporate goals, not just parochial interests

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Characteristics of Successful Leaders

Entrepreneurs skilled at helping, coaching, and conflict management• Creatively handle conflicts, generate consensus decisions, and

share power and information• Recognize that high-quality decisions require a rapid flow of

information in all directions• Accept that knowledge, competence, logic, and evidence need

to prevail over official status or formal rank in organization

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Characteristics of Successful Leaders

Entrepreneurs skilled at teamwork and people management• Encourage innovation and calculated risk rather than by

punishing or criticizing whatever is less than perfect• Expect and encourage others to find and correct their own

errors and to solve their own problems• Make heroes out of other team members and contributors• Generate trust among colleges and subordinates• Perceived as honest and direct, open and spontaneous

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Key Questions for the Lead Entrepreneur/Founder

• Is formation of a team desirable or necessary?

• Do I want to grow a higher potential company?

• What talents, know-how, skills, track record, contacts, and resources are currently available?

• What is needed to succeed?

• Who is needed to complement me?

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The Key to Growth

Team traits • Cohesion• Teamwork• Integrity• Commitment to the long haul• Harvest mind-set• Commitment to value creation• Equal inequality• Fairness• Sharing of the harvest

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Other Leader Competencies

Entrepreneurial Leadership• Problem solving• Communications• Influence skill• Decision-making• Project management• Negotiating• Managing outside professionals• Human resources administration

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Entrepreneurial Influence Skills

Interpersonal/teamwork skills• Ability to create, through management, a climate and spirit

conducive to high performance• Ability to understand the relationships among tasks and

between the leader and followers• Ability to lead in those situations where it is appropriate

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Other Leader Competencies

Marketing• Market research and evaluation• Marketing planning• Product pricing• Sales management• Direct selling• Service management• Distribution management• Product management• New product planning

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Other Leader Competencies

Operations/Production• Manufacturing management• Inventory control• Cost analysis and control• Quality control• Production scheduling and flow• Purchasing• Job evaluation

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Other Leader Competencies

Finance• Raising capital• Managing cash flow• Credit and collection management• Short-term financing alternatives• Public and private offerings• Bookkeeping, accounting, and control• Other specific skills

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Other Leader Competencies

Information Technology• Information and management systems tools.• Business to business, business to consumer,

business to government, all via the Internet• Sales, marketing, manufacturing, and

merchandising tools.• Financial, accounting, and risk analysis and

management tools.• Telecommunications and wireless solutions for

corporate information, data, and process management.

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Other Leader Competencies

Law and Taxes• Corporate and securities law• Contract law• Law relating to patent and proprietary rights• Tax law• Real estate law• Bankruptcy law

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Common Pitfalls

• Do not use the “honeymoon” period of start-up advantageously

• Do not answer the questions of who is in charge, who makes the final decisions, and how real differences of opinion are resolved

• Do not address or recognize the deficiencies of the lead entrepreneur or the management team

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Common Pitfalls

• Do not recognize that creating and building a new venture is a dynamic process

• Do not identify and defuse destructive motivations of investors, prospective team members, or the lead entrepreneur

• Do not value trust and integrity

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Slicing the Founder’s Pie

How much stock ownership should go to whom?• Share the wealth with those who help to create the value and

thus the wealth• Realize a harvest of at least 5 to 10 times the original

investment• Make sure the company prospers and grows thus creating a

huge, shared pie

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Consideration of Value

• Idea

• Business plan preparation

• Commitment and risk

• Skills, experience, track record, or contacts

• Responsibility