The Leadership Insiders network is an online community where the most thoughtful and influential people in business contribute answers to timely questions about careers and leadership. Today’s answer to the question: How do you prepare for a management role? is written by Arvind Parthiban, CEO of Zarget.
There are few things in professional life as exciting as striking out on your own in a startup venture. Salaried cubicle-dwellers dream about it, but few actually do make the jump from employee to the C-suite. According the Kauffman Index, which measures startup activity, in 2015, more than half a million new businesses launched each month in the U.S. alone.
But ensuring the success of a new venture takes more than a great product or service concept and a desire to be your own boss. It also requires making a successful transition from an employee to a company officer. My team and I made that transition more than a year ago, quitting our high-profile tech firm jobs to found a successful startup. Here are five tips that helped us make the leap:
- Designate decision-makers for each operating area
When you’re an employee, you can rely on the company’s executives to resolve conflicts and make tough decisions. That’s no longer an option when you make the jump to the C-suite. To ensure we would always be able to resolve impasses and break deadlocks, my co-founders and I designated certain employees to be the ultimate decision-makers for specific areas, or direct responsible individuals (DRIs), as Apple (AAPL) refers to them. This doesn’t mean DRIs don’t consider input from everyone else. That’s part of their function—to discuss ideas with all involved and listen to suggestions. But the DRIs have the final call for their areas of responsibility.
- Be diplomatic with outsiders but candid with coworkers
Launching a new venture tends to attract attention. You may find yourself besieged by jobseekers, inundated with vendor offers, and the recipient of much unsolicited advice. It’s important to know that it’s okay to say “no.” But be diplomatic about it when dealing with people outside of the company. Accept a résumé and “keep it on file,” even if you aren’t hiring. Listen politely to offers and advice. On the other hand, when you’re interacting with coworkers, it’s important to be completely honest, backing up your opinion with facts and data where possible. A candid, genuine assessment is absolutely necessary internally.
- Embrace many different roles
When you work for an established company and you need to plan an event, you call the event planner. When you have to travel, you call the travel office. But when you strike out on your own, you’ll be the travel planner, event manager, HR expert, administrator, sales rep, and marketing professional. At my company, I’m the CEO and the person who brings the coffee. It’s also important to keep this in mind when you’re hiring. At a small company, everyone is required to wear many hats, so make sure the people you hire are willing to embrace a range of roles.
- Keep expectations flexible
When you launch your new product or service, customers might surprise you. For example, you and your team may have devoted the most time and energy into developing a certain feature on an app or analytics tool, but you quickly find that customers value a completely different feature that you added almost as an afterthought. Scenarios like this point to the importance of flexibility. The typical startup lacks the resources to do large-scale customer preference analysis prior to a product launch, so it’s important to listen to what customers tell you with their actions.
- Don’t forget that the people you hire will define your company
When you launch your own company, you’ll be the go-to person for many roles, but eventually, if your business starts picking up steam in the marketplace, you’ll decide to add new employees to the mix. When you hire new people, keep your company culture in mind. Select employees who are versatile and embrace a broad range of activities since they, like you, will be required to wear many hats. Remember that your employees will define your company, so choose wisely.
Even if you have a wonderful idea for a new product or service, launching a new startup is a risky proposition. Failure rates can range as high as 90% according to some estimates, depending on the industry. And all too often, it’s not lack of demand that is the problem, but rather new entrepreneurs who are simply unprepared to manage a business venture.
That’s why it’s so important to make sure you are fully ready to transition from an employee to a business leader before you make the leap. Once you launch your company, there will be no boss to turn to when the going gets rough—you and your colleagues will have to make all of the decisions. The good news is that by following these five tips, you’ll be well ahead of the learning curve.