Too many chefs spoil the broth

By on April 30, 2014

It sounds obvious, but without a clear leader your business will suffer, says Faisal Butt. Time to establish who’s in charge.

The success of any organisation depends on the effectiveness of the decisions made. There have been many debates on the effectiveness of individual decision-making over group decision-making. Despite my strong feelings on this subject, I’m also of the view that you don’t want to build a team where everyone’s in agreement either.

Having people to challenge you is something that a dynamic leader should welcome and embrace. After all, if you’re hiring A-players, they’re not there just to be worker bees.

The issue

The problem arises when you allow yourself to be pulled in different directions to the extent that decision-making becomes delegated to a ‘metaphorical’ committee. It’s a classic ‘paralysis by analysis’ situation where you have too many views around the table, people debating, and a decision that should take three days ends up taking three weeks.

Shun ‘Groupthink’ at all costs

The basis for the ‘committee conundrum’ lies in Irving Janus’ socio-psychological concept ‘Groupthink’, where thinking up decisions as a group results in unchallenged, poor quality decision-making. I advise my founders to avoid it at all costs. The roadmap of any business is a ‘collection of decisions’ – and the decisions that are made will ‘make or break’ a company. In my experience, decisions made by committee are always compromises and thus lack the vision of the entrepreneur.

Skate to where the puck is going to be

Sony is a classic example of a company that became too democratic and fell behind. Why didn’t it come up with the iPod? The Walkman and Discman were both Sony products and they had established relationships in the entertainment industry with Sony Entertainment, but it was Apple that developed the first widely used MP3 player. When the digital age arrived, Sony, despite its hardware and entertainment prowess, simply wasn’t able to adapt quickly enough.

Who is really conducting the orchestra?

When I was running my first business, Tribal Monsoon, I didn’t have any A-players to help me make the right decisions and that contributed to the company’s failure. Entrepreneurs in a VC situation have the advantage of an experienced board and mentors to guide them. Having that guidance can do wonders for a business – and I wish I had it at Tribal Monsoon – but, at the same time, founders need to be able to draw the line in terms of who’s calling the shots. The second a VC or investor is making the decisions, they are running the business and the dynamic has turned the wrong way.

Sweat the big stuff

The waltz between ‘decision-making’ and ‘delegating’ is an important one for the entrepreneur to master. An entrepreneur faces a myriad of day-to-day decisions that must be made and he or she can easily get pulled into those that are of little commercial significance. The entrepreneur must master the art of ‘sweating the big stuff’. Who should we be hiring or firing? To what degree should we control burn rate?  Should we spend £100k on a TV trial today or after our next funding round?  It is the toughest make-or-break issues that require the entrepreneur to lead, but most other things can be delegated to carefully selected commanders.

Final word

You will make decisions that are wrong, and that’s normal. Investors and people in your team should understand that, even if they don’t like it. You need to remember that you’re in business to make money, not friends.

A strong leader listens, digests his advisors’ counsel, forms a view after having carefully considered the alternatives, and then acts.

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