People Mistakes Founders Make

I have worked for a few terrific motivators and a ton of morale-destroyers.

There was the founder who never stopped talking about how rich he was, the CEO who chased the VP of Sales around a conference room table threatening to kill him, and the VP who visibly shook when she heard bad news.

The truth is that every founder did at least a few things right to become one. And for the most part, they got to where they are through achievement (or at least the courage to pursue it).

Unfortunately, that success sometimes comes at the expense of colleagues or those around them. That is why there is no guarantee that the founders you know or work with are actually leaders.

It is clear that early on, a company lives and dies by the decisions the founders make and the priorities they set.

As Aha! has become successful, we are humbled that many founding teams now turn to us for advice. They realize that their decisions will set the tone for their organization as it grows, and they want to avoid as many missteps as possible.

Small teams have lots of energy, but a limited resource base to source that energy from. There is no one to pick up the slack, and every decision has a significant opportunity cost. There is no parallel processing. This is why as companies grow, they must expand their management team and bring on more executives in order to scale the business.

Those first few executives can either reinforce the culture of the company or kill it. The mistakes they make — especially as their actions impact people — will echo throughout the company.

While every executive will have their own approach based on their education, experience, fears and aspirations, they should build people up and put the business ahead of their own desires. But too often, that is not the case.

Here are the top seven most damaging mistakes I have seen founders and executives make at all sizes of companies. This list is particularly painful for the employees who work with these types of founders. Hurtful (and typically unsuccessful) founders:

Do not provide a clear vision

Employees look to their leaders to establish the strategy and then share it with the larger organization. However, founders who fail to provide this much-needed direction often stumble to achieve their goals. They also cause confusion and uncertainty for everyone else. The leadership team must set the course and then follow it.

Manage perceptions rather than the business

Many founders worry more about publicity than making sure the business is off to a good start. While perceptions are important, this approach gets it backwards. Hype will go just as easy as it came. They should focus on delivering value to their customers first, and earning a reputation that is solid and well-deserved.

Prohibit criticism

Founders who stamp out disapproval are creating a culture of fear and missing the opportunity for a healthy debate. It is good to have a few naysayers who are willing to say, “I don’t think that’s a good idea, and here’s why.” Giving employees the freedom to speak their mind will ultimately build a stronger organization.

Avoid bad news for fear of being stained by it

Some leaders are afraid that hearing bad news will cast them in a poor light. But when they only hear half the story, they risk making decisions based on faulty assumptions. The entire leadership team must be willing to see the complete picture — the good news along with the bad.

Do not take responsibility for poor decisions made

Many founders lack the maturity to say “mea culpa” and are quick to assign blame to others. But strong leaders are accountable for decisions made within the organization. They will even take the fall for a coworker who makes a poor decision, and then counsel them privately.

Gossip

The leadership team must set the example for how they want team members to treat each other. That is why they have no business engaging in gossip, which shows a lack of maturity and destroys trust. Instead.