Diversify your product line. Stick to your knitting. Hire a professional manager. Watch fixed costs. Those are some of the suggestions that entrepreneurs sort through as they try to get their ventures off the ground. Why all the conflicting advice? Because in a young company, all decisions are up for grabs. Based on his observations of several hundred start-up ventures over eight years, Amar Bhidé has developed a three-step sequence of questions that all entrepreneurs must ask themselves in order to establish priorities among the vast array of opportunities and problems they face: What are my goals? Do I have the right strategy? Can I execute the strategy? Before entrepreneurs can set goals for a business, they must articulate their personal goals. They may want, for instance, to attain a certain lifestyle, experiment with technology, or build an institution that can outlive them. Only when entrepreneurs decide what they want from their businesses can they determine what kind of company they must build, what they are willing to risk, and whether they have a well-defined strategy. Great strategies, however, don’t guarantee great execution. A venture may fail if its founders do not hire the best people, attract capital, invest in organizational infrastructure, and shape a culture to suit the venture’s strategy. Founders must also consider the evolution of their personal roles. Entrepreneurs cannot build self-sustaining companies simply by “letting go.” While they sketch out the future, entrepreneurs must manage as if the company were about to go under. They must continually acquire new skills—and continually ask themselves where they want to go and how they will get there.
Of the hundreds of thousands of business ventures launched each year, many never get off the ground. Others fizzle after spectacular rocket starts. Why such dismal odds? Entrepreneurs—with their bias for action—often ignore ingredients essential to business success. These include a clear strategy, the right workforce talent, and organizational controls that spur performance without stifling employees’ initiative. Moreover, no two ventures take the same path. Thus entrepreneurs can’t look to formulas to navigate the myriad choices arising as their enterprise evolves. A decision that’s right for one venture may prove disastrous for another. How to chart a successful course for your venture? Bhide recommends asking yourself these questions:
Improvisation takes a venture only so far. Successful entrepreneurs keep asking tough questions about where they want to go—and whether the track they’re on will take them there. The Idea in Practice A closer look at Bhide’s three questions: Where Do I Want to Go?To articulate your goals for the enterprise, clarify:
How Will I Get There?Successful strategies:
Can I Do It?A great strategy is worthless unless you can execute it. To do so, you’ll need the right:
Of the hundreds of thousands of business ventures that entrepreneurs launch every year, many never get off the ground. Others fizzle after spectacular rocket starts. A version of this article appeared in the November–December 1996 issue of Harvard Business Review.
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