Business Magazine

Ten Learning Steps from Entrepreneur to Manager

Posted on the 22 May 2011 by Martin Zwilling @StartupPro

entrepreneur-manager-meetingEntrepreneurs often have formidable technical expertise, key to developing a new product or service, but a great naïveté in management skills. They run into difficulty when their business reaches the $1-2 million annual sales range, or their employee count exceeds 5-10. It’s here that entrepreneurs must shift their thinking from tactical and operational, to strategic and managerial.

I’m convinced that management is a learnable skill. It can come from experience, or from training in a prior company, and it can even be self-taught from the Internet by smart entrepreneurs, just like they learned the skill of establishing a company, negotiating a contract, or filing a patent.

There are also many books on this subject, including a new one from the master on management, Brian Tracy, “Full Engagement!: Inspire, Motivate, and Bring Out the Best in Your People.” In it, he outlines a long list of key management principles for success. I’ve extracted here some key ones most relevant to startups entering the growth stage:

  1. Communication clarity is essential. Management is “getting results through others,” not doing it yourself with the assistance of others. That means your chief responsibility is to communicate clearly about what you need done, and who has the responsibility to do it. Your growing team doesn’t automatically know what you are thinking.

  2. Planning has priority over doing. Planning is one of key learning areas, in moving from an entrepreneur to a manager. Your ability to plan, to think through what needs to be done, in advance, on paper, is a critical skill that largely determines your entire future. Your job moves to determining what is to be done, instead of how it is to be done.

  3. Organize your work before you begin. Most startups begin first, and think about organization later. Organizing means bringing together the necessary resources, and assembling the right people, then assigning work to specific people to be accomplished at specific times to specific standards of performance.

  4. Delegate effectively and often. Delegation doesn’t work when you are creating your startup. ‘Not delegating’ doesn’t work when you are growing it later. Remember that delegation is not abdication. It’s still your company, so you have to follow-up, step in for disaster recovery, and keep the interplay between tasks and organizations working.

  5. Staff properly at every level. This is not the same as finding a partner with complementary skills to start your business. It means not only hiring, but training and measuring performance. It means mentoring less experienced team members, and quickly replacing incompetent staff members. These are all skills you can learn.

  6. Focus on high productivity. For growth and success, you need to continually look for ways to increase output, while lowering costs. That’s a big step from one product for one customer. The three R’s for attaining higher productivity are reorganization, reengineering, and restructuring. No entrepreneur is born with these skills.

  7. Set the standard with visible actions. You can only lead by example, and set equally high standards for the people around you. You learn and gain credibility by committing to excellence, and asking customers and team members for feedback and ideas.

  8. Concentrate on the important tasks. All successful managers never forget to concentrate on their most important task and stay with it until it is done. As a startup grows, it’s easy to try to do too many things at once, while doing nothing particularly well.

  9. Identify constraints and their source. Between you and any goal is a constraint setting the speed at which you achieve that goal. The best managers are the most creative in overcoming constraints. Constraints follow the 80/20 rule – eighty percent are from inside, and 20 percent are from the outside. You need to tell the difference.

  10. Concentrate on continuous improvement. No company that is static can grow or survive. Continuous improvement requires strategic planning to set new objectives and work toward them. Every growth company needs to innovate continually, maybe spending 20 percent of your revenues on research and development.

Some entrepreneurs, on seeing all this, will decide they have no interest in being a manager. They should voluntarily bow out early, to start another business. Others will get pushed out, with some pain, by investors who see the need for a new team to lead the growth stage. Even more painfully, too many others won’t bother to change their style, resulting in everyone being unhappy, and a business that stagnates, or even fails.


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