For generations, people have been studying successful businesses to understand specifically what sets them apart from the competition. The 1982 classic book, “In Search of Excellence,” makes the case that exceptional businesses share a common set of characteristics, including proactive decision-making, an innovative spirit, and a hands-on, value-driven management philosophy. As I’ve read and analyzed these books through the years, it’s really gotten me thinking about whether exceptionally successful entrepreneurs also share a set of common characteristics.
During a recent conversation with my colleague Dan Springer, CEO of DocuSign, a leading cloud-based platform for streamlining and automating the agreement process, we decided to challenge ourselves to articulate what it is that successful entrepreneurs do so well—that is, the specific qualities that set them apart from their less successful counterparts. I hope that the top five list that Dan, a veteran CEO, came up with will provide young entrepreneurs with ideas they can learn from and seek to emulate as they go about building their companies. Let’s explore the five essential things that every entrepreneur should do to really stand apart in the business world:
Have a formula for consistently hiring exceptional people: Every entrepreneur will tell you that they strive to only hire exceptional people, but not every entrepreneur can tell you that they have a rigorous, systematic way of going about this task. Many entrepreneurs hire by gut instinct or, worse, leave key hiring decisions to subordinates. In fact, almost one-third of senior business leader say finding talent is their most significant managerial challenge, according to McKinsey & Company research. The reality is that every hire counts when building a successful company; even one bad apple can taint the company culture of a startup. Dan believes the key is to develop a formula for consistently hiring exceptional people. You need to know what are the most important factors you will look for and evaluate in every candidate. Indeed, knowing what the winning combination of these factors looks like is essential to making consistently successful hiring decisions. Dan’s hiring formula focuses on three factors: how smart they are, how much ego they have, and how hard they work : “[(Smarts/Ego) raised to the power of Work]” For example, he says it would be a bad thing to hire someone who works hard, isn’t smart, and has a big ego.
Be able to articulate in a few words what sets your company apart: Humans make sense of the world by boiling down complex information into a few simple messages. For example, when a young entrepreneur makes a presentation to other executives, a board of directors, or prospective investors, he or she typically comes to the table with a lengthy presentation and dozens of PowerPoint slides. But at the end of the day, the audience will retain just a few key messages. That’s why a study in the Harvard Business Review found that the single biggest determinant for how engaged a company’s customers are boils down to the ease with which its customers can learn about and evaluate the company’s offerings. The ability to instantly and effortlessly articulate in just a few words what sets their company apart is a powerful, highly effective skill. At my company, for example, we emphasize our one-sentence mantra for how we differentiate ourselves at every company meeting. Dan says another highly effective approach is to avoid using a PowerPoint deck at all, and instead present a few points on sticky notes. Unfortunately, many young entrepreneurs clam up when challenged to articulate their bottom-line message. They ramble, they pivot to their lengthy, rehearsed talking points, and they ultimately offer a statement that isn’t memorable and that doesn’t resonate.
Think of yourself as a servant leader: Young entrepreneurs are often first-time leaders in the business world, unsure of themselves and struggling to define their leadership style. They commonly overcompensate for inexperience and their lack of confidence by being overly prescriptive, too much of a micromanager, and too heavy-handed. The best leaders recognize that they are servants, not rulers, of their business. They serve employees by giving employees the tools and support they need to succeed, and serve customers by improving both product lineup and the customer experience. A recent University of Illinois study found that restaurants with servant leaders at the helm experienced a 50% higher staff retention rate and an 8% increase in customer satisfaction ratings. Unfortunately, the busier you become as an entrepreneur, the more challenging it becomes to continue to serve employees and customers. Dan says he doesn’t go to bed at night until his inbox is clear; he doesn’t want to hold anyone back from moving forward on something—that’s how he commits to being a servant leader every day.