Seven deadly management sins for start-up wannabes

Christine D'Mello

Young entrepreneurs looking to make a foray in the world of business do have unrealistic expectations, says Jack Delosa.

“I think that typically somebody who is on the edge looking to jump into business, is often naive. I know I was certainly guilty of this - as to how easy it’s going to be and how quickly your business will become successful,” says Delosa, who made $25 million by the age of 27.

“There are no rules. A business may become successful in 12 months. However, in my experience in the vast majority of the time that is not the case.”

It’s best for an early-stage entrepreneur to view their first three to five years in business as their apprenticeship stage, says the founder of The Entourage, an education institution for entrepreneurs.

“View it as a learning opportunity. Do it wholeheartedly. It’s a real business, make it successful. However, give yourself grace in understanding that you’re still learning about the world of business.”

Delosa lists seven common leadership or management mistakes made by young entrepreneurs looking to break on to the start-up scene.

Trying to do everything themselves for too long

Delosa says while young entrepreneurs need to do everything by themselves early on in the journey, it should be an objective to dilute themselves out of the operations of the business.

He gives his own example. “When I started my business at the age of 18, it was a business to business call centre and I was doing everything.” As his business grew, Delosa hired staff in various roles, so those would be functions in the business he would not need to do.

“Leadership being the inspiration and the motivation within the human being."

Too much focus on management, not enough on leadership

Management is important, says Delosa, it ensures that things get done right on time and thoroughly. However, leadership is equally important, he says.

“Leadership being the inspiration and the motivation within the human being, management being the accountabilities and the system we wrap around the function of that person. Every manager needs to view themselves as a leader first and a manager second. You need to inspire, you need to help the human being become inspired and want to do a great job.”

Lack of job descriptions and KPIs

Typically, start-ups are very reactive, says Delosa. “They are sort of just making it up as they go along and that works for a while because it sort of succeeds off the founder’s magic, the founder’s hustle. However, you get to a point where you need to start developing systems, you need to start developing structure. We need job descriptions, and every person needs KPIs because it becomes too big of a job to keep in your head.”

Not spending time on their highest and best use

“Not spending enough time on sales and marketing. As an early-stage business owner you need to be spending 80 per cent of your time on revenue-generating activities – sales and marketing. Studies show that small businesses in Australia spend 11 per cent of their time on sales and marketing.” That is literally a deadly sin, he says, because if you don’t bring in revenue in those early years, you won’t be able to keep the lights on and get the wages bill paid.

“Every business has a dynamic about it,” says Delosa. “Every business has a DNA."

Not identifying the DNA or the culture of the company

“Every business has a dynamic about it,” says Delosa. “Every business has a DNA. Typically what early-stage managers do is they recruit according to the resume and according to the tangible function of the role to the neglect of the cultural alignment of the human being.”

He says an entrepreneur needs to recruit according to whether a person is a cultural fit for the organisation. They should look at whether the potential recruit’s DNA as a human being is aligned with the DNA of the company? “And once they tick that box, then you access competence around resume and functions. But we need to look at the human being first.”

Not enough structured meetings

Every great organisation has a rhythm and routine, says Delosa. “It may be different for every business. It may be they catch up for an entire team meeting on a Monday, do one-on-ones with the staff on a Wednesday and finish the week together as a team on a Friday.”

He says these meetings need to be regularly scheduled so that there are tough points for the leaders of the start-up to be delivering effective leadership and efficient management in a routine forum every single week.

Not showing the team the future

Delosa concludes quoting a French philosopher: “‘If you want to build a ship don’t bark orders for people to drum up wood, but rather teach them to yearn for the vast and endless sea’. In my experience when you talk to your team about where you’re going and who you’re becoming as an organisation, they will often work out to a large degree who they need to become and what personal and professional development they need to undertake in order to build the appropriate ship.”

Christine D’Mello

Christine D'Mello is a freelance journalist who writes for The Sydney Morning Herald and The Age.