When most of us think of entrepreneurs, the characteristics that come to mind tend to fall along the lines of: self-starter, intelligent, hard working, driven, visionary, risk-taking, and boundary pushing. People like that are the ones that make things happen, right?
Among all the business books I’ve read (and that’s quite a few!), I don’t think I’ve ever seen one with a title like: The Honest Entrepreneur. Still, I’d like to suggest that a true entrepreneur—or any successful business leader, for that matter—needs to be honest.
What does honesty have to do with business success? First of all, let me explain that I’m not talking about “cooking the books” or over-reporting sales and earnings. I’m not talking about overblown claims about what a product or service can do. I’m not talking about making promises about deliveries that you know you can’t make—just in order to “seal the deal.” Of course you shouldn’t do any of those things. But I’m talking about a different kind of honesty.
Let’s look at three areas where honesty is essential for business success.
- Honesty About Your Market: Successful leaders and entrepreneurs take a hard, unvarnished, honest look at their market. They study the market and know it. They don’t base their market assumptions on the way they want things to be—they base them on what they really are. They rely on data rather than on emotion. This doesn’t mean they aren’t passionate about what they do, but they don’t let their emotions dictate business decisions.
- Honesty About Your Product/Service: Telling yourself the truth about what you produce can be harder than it seems. We hear stories all the time about employees in a company “drinking the Kool-Aid.” We can get pretty wrapped up in the potential of something we’re working on—and that can shade our view of what it really does. Successful leaders know that their products or services probably can’t do everything. That means they aren’t the right solution for everybody. That’s not failure—it’s realism.
- Honesty About Your Capabilities: Entrepreneurs and leaders are—by nature—strivers, dreamers, and people who push the envelope. Those are good But those kinds of people can sometimes overestimate their ability to deliver. Entrepreneurs are good at pushing boundaries, but often there are physical limitations to what a company can produce. If the “pipeline” is a certain size, adding more pressure will only work for a while—and eventually you’ll break the pipe.
So, do I think entrepreneurial types are morally bankrupt? Of course not! I love working with individuals that challenge the status quo, think outside the box, and dare to dream. But as you head into a new year and begin making your business plans for the next 12 months, make sure you include a heavy dose of honesty as you review and think about your market, your products and services, and your capabilities.
And leave me a note in the comments section about other areas where you think it’s hard to be honest with ourselves when it comes to our businesses. I’d love to hear what you think!