An Entrepreneur's Top Leadership Challenges -- and How to Meet Them

For first-time entrepreneurs, expanding the businessand hiring those first employees is an exciting adventure. But it can also be rife with challenges and sometimes mistakes. The reason: The skills needed to successfully lead a growing enterprise are markedly different than what it takes to run a one-person business.

We spoke with three business leaders about challenges they faced as their companies grew, and how they dealt with them.

Challenge No. 1: Hiring the right people -- and keeping them
Many first-time leaders make regretful hiring decisions early on. They choose people too much like themselves when what they really need are employees with complementary skills. They also sometimes recruit people who may have the right skills but lack solid values.

Tom Sullivan, founder and chairman of Lumber Liquidators

Courtesy of the company

Tom Sullivan, founder and chairman of Lumber Liquidators, a Toano, Va.-based hardwood floor retailer, learned his lesson the hard way. When expanding operations beyond his first store in the Boston area, he needed store managers and truck drivers in other cities, but some of his earliest hires didn't pan out.

Related: What Entrepreneurs Can Learn from Costco's CEO

One store manager admitted to stealing money from the cash register, which he later repaid. Then there was the truck driver who disappeared on his first delivery, taking both the truck and the cash he had collected. "The biggest thing was getting people you could trust," says Sullivan, 52, now chairman of the 2,000-employee public company. He didn't do enough due diligence at first, but after those experiences, he quickly began conducting background checks on all new employees.

He also realized he needed to do more to motivate workers and build a more entrepreneurial culture. Instead of paying drivers by the hour, he gave them 60 percent of all delivery fees. He also began paying store managers 0.5 percent to 2 percent commissions on their sales. The new compensation policies led to higher retention rates. "Some of our sales managers made over $150,000, even $300,000, based on their sales," Sullivan says.

Challenge No. 2: Expanding prudently, not prematurely
When a company starts expanding, it's tempting to keep growing based on promising newbusiness opportunities. But it's far better to be cautious, as Jon Black painfully found out.

Jon Black

Courtesy of the company

In 2001, when Black reacquired GetProof, a physician credentialing company that he'd founded, it had about 10 to 15 employees. About five years later, a Fortune 500 health company signed a contract with the firm, and GetProof's operations manager suggested hiring 20 people to scale up before the contract took effect. Black agreed, but the contract never came to fruition.

Black says he ultimately had to lay off the people he'd hired, along with his operations manager. "The problem was I kind of abdicated my responsibility as CEO," says Black, 50. "We were so caught up in being lured by a very large company that was wielding a lot of power."

Related: 10 Secrets of Successful Leaders

Today, Black is far more careful about hiring at his new firm Terillion, an Alpine, Utah, company that has developed technology to help companies weed out fake online reviews. He waits longer after contracts are signed to increase headcount so he's sure the work will really come in. He also typically hires people on a part-time basis or as independent contractors before making them full time. That way, he can be sure they're a good fit for the position.

Challenge No. 3: Managing through big changes
Many first-time leaders struggle with maintaining the culture of their firms as they grow. That's particularly challenging in times of turmoil.

Nancy Kramer

Courtesy of the company

Nancy Kramer, for instance, wasn't prepared when her company's fortunes changed. She founded Resource Interactive, a Columbus, Ohio, marketing firm, in the early 1980s, scoring Apple Inc. as her first big client. The company grew quickly throughout the 1980s and 1990s, reaching about 150 employees by 2000.

But when the dot-com bust hit, business dropped by 90% "almost overnight," says Kramer, 56, now chairman. The company had to retrench and lay off about 50 employees.

Kramer felt terrible, giving the departing employees generous severance packages and condolences. But in hindsight, she realized she didn't do enough to console her remaining workforce. Morale in the office tanked. "The office got really bad for a while," she says. "The people who stayed were probably worried about their own futures with the company."

Kramer says she wishes she'd given less generous packages to the people she terminated and diverted more of the money to boosting the morale of those who stayed. Today, Kramer says, the company is more thoughtful about how it handles layoffs and maintains a positive culture. The company gives employees development opportunities and encourages them to have fun at work. "We put a lot of emphasis on making our office a place where people want to come every day," Kramer says.

http://www.entrepreneur.com/article/222767?cm_mmc=Newsletters-_-BOTW-_-020312-_-AnEntrepreneursTopLeadershipChallengesandHowtoMeetThem

FOR LEADERSHIP GROWTH.

MAKING THE MOST OF LIFE’S SIGNIFICANT MOMENTS

By themselves, significant moments do not alter a person’s behavior. Events certainly can make powerful impressions on us: they stir our emotions, capture our imagination, provoke our conscience, or bring revelation. However, events do not automatically transform us, and the feelings they evoke usually are short-lived.

Leadership breakthroughs happen when we seize the opportunity presented by a significant event to adjust our thinking and to change our patterns of action. For example, having a heart attack could have brought me nothing more than pain. However, I used the experience as a springboard to change my thinking about my physical health. Prior to the heart attack, I considered exercise to be a nuisance and dietary restrictions to be a drag. After suffering the heart attack, I reevaluated the importance of a healthy lifestyle. I contemplated the implications of ignoring my health, and I thought about how poor fitness would shorten my life and would limit my influence. I modified my mental attitude toward nutrition and physical fitness, and I took practical steps to build exercise into my weekly routine.

The tragedy for many leaders is that they let major life experiences slip by without learning from them. Once a pivotal moment alerts you to the possibility for a better future, I suggest embarking on the following four steps to bring about positive change.

1) Embrace Bottom-Line Thinking

When touched by a significant life event, project yourself into the future by asking yourself the following questions: How will my life improve by making a change? What is at stake if everything remains the same?

2) Generate Reminders

I agree with Samuel Johnson: “People need to be reminded more often than they need to be instructed.” For instance, physical fitness isn’t rocket science. Indeed, the formula is amazingly simple: eat healthier and exercise more often. Yet, breaking a bad habit involves reminding ourselves of the action we need to take and what’s ultimately at stake. Generating reminders may include creating visual mementos, setting calendar prompts, asking friends to provide accountability and encouragement, or celebrating progress made.

3) Find a Model

I started off as a lousy public speaker, but I was committed to improving. For that reason, I began to study, in detail, the great communicators within my circle of friends and colleagues. I listened intently whenever they spoke, and I observed their strengths. Then, I incorporated the lessons learned into my own style and delivery. Progress came slowly. In fact, I’d estimate that it took me eight years to become a polished public speaker. However, by modeling myself after other skilled communicators, I eventually gained competence myself.

4) Adjust Your Surroundings

To translate the momentary inspiration of an event into life transformation, we must limit our exposure to negative environments. The people closest to us have tremendous influence over our lives. To make the most of pivotal moments in our lives, we often need to reevaluate our relationships and to cut ties with unhealthy acquaintances. 

CONCLUSION

Pivotal moments in life stir our emotions, but they don’t necessarily affect our day-to-day motions. In fact, if you wait until you feel like making a change, then you’ll never experience personal growth as a leader. The next time you’re touched by a significant life event, look for ways to adjust your thinking and behavior so that instead of temporary enlightenment, you experience lasting breakthrough. Remember: leaders develop daily, not in a day.

John Maxwell Company

Mind Management

If you challenge your mind to expand your comfort zone, you will naturally expand your wealth zone. By striving to grow your comfort zone, you are constantly taking risks and finding more opportunities, ideas, actions and growth than you ever imagined. The bigger your “container,” the more income and wealth you will attract and hold. Challenge yourself to constantly make your container larger, and watch the universe rush to fill the space.

What is the single most important skill you can master to increase your happiness and success? Training your mind.

How do you train your mind? Start by observing your thought process. If you are like most people, your mind continuously produces both empowering thoughts, such as those that lead to success, and disempowering thoughts, including those that don’t support your wealth and happiness. As you identify your thoughts, you need to begin consciously replacing your disempowering thoughts with empowering ones. In doing so, you will begin adopting empowering attitudes as your own. Start by making declarations to yourself, such as “I act in spite of fear,” “I act in spite of doubt” and “I act in spite of inconvenience.”

Believe it or not, you can choose your thoughts and control your mind. You have the natural ability to cancel any thought that does not support you. You can also install self-empowering thoughts at any time by choosing to focus on them.

At one of my seminars, Robert Allen, a close friend and bestselling author, said something quite profound: “No thought lives in your head rent-free.”

What he meant is, you pay for your negative thoughts in money, energy, time, health and happiness. If you want to move to a new level in your life quickly, begin by dividing your thoughts into two categories: empowering and disempowering. Observe them, and determine if they are supporting your happiness and success. Choose to entertain only the empowering thoughts, and refuse to focus on the disempowering ones. When a nonsupportive notion comes to the surface, replace it with a more supportive way of thinking. I call this process “power thinking.” And mark my words, if you practice it, your life will never be the same.

So, what is the difference between power thinking and positive thinking? The distinction is slight, but profound.

People use positive thinking to pretend that everything is rosy when they really believe it is not. With power thinking, though, we understand that something is neutral until we assign it meaning by creating a story.

"You have the natural ability to cancel any thought that is not supporting you."

This is the difference between a positive thinker and a power thinker. A positive thinker believes their thoughts are true. Whereas a power thinker recognizes that their thoughts are not true, but since they are making up a story anyway, they might as well make up a story that supports themselves. Why do we do this? Not because our new thoughts are true in an absolute sense, but because they are more useful to us and feel a heck of a lot better than nonsupportive ones.

Observe yourself and your thought patterns, and entertain only the thoughts that support your happiness and success. Challenge that little voice in your head whenever it tells you, “I can’t” or “I don’t want to” or “I don’t feel like it.” Don’t allow this fear-based, comfort-based voice to get the better of you. Make a pact with yourself that whenever the little voice in your head tries to stop you from doing something to support your success, you will do it anyway to tell it that you are the boss. Not only will you increase your confidence dramatically, but eventually, the voice will get quieter and quieter as it recognizes it has little effect on you.

Particularly during economic downturns like this, it is crucial that we change our pessimistic thoughts into empowering ones and stretch our comfort zones to attain and hold more wealth. We must constantly choose to remain positive and not let disempowering thoughts take hold, regardless of what the media says about the global economy.

Practice getting out of your comfort zone by consciously making decisions that will make you uncomfortable. Talk to someone you would normally avoid, ask for a raise at work or try something that scares you.

Living a mediocre life does not lead to happiness. Constantly wondering what could have been does not lead to happiness. What does lead to happiness is living in our natural state of growth and reaching our full potential.

The next time you are feeling uncomfortable, uncertain or afraid, press forward instead of retreating. Experience the feeling of discomfort and accept it for what it is—a feeling. Recognize that a feeling does not have the power to stop you. Push on, and eventually you will reach your goal.

The point, however, is not whether or not those feelings of discomfort eventually subside. If they do lessen, take it as a sign that you need to increase your objective because the minute you get comfortable, you have stopped growing. Managing your mind to live at the edge of your comfort zone will allow you to grow and reach your fullest potential.

Because humans are creatures of habit, we have to practice. Practice acting in spite of fear, in spite of discomfort, in spite of inconvenience. By doing so, you will quickly move to a higher level, and your wealth will almost certainly increase.

The mind is a powerful tool, but it is also the greatest soap-opera scriptwriter in history. It creates powerful stories based on dramas or disasters that have never happened and likely never will. As Mark Twain said, “I’ve had thousands of problems in my life, most of which never actually happened.”

It is important to remember that you are not your mind—you are much bigger and more powerful than your mind alone. By learning to train it, though, you can conquer your fear, expand your comfort zone and dramatically increase your wealth.