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Odds Of Building A Successful Business From Scratch Are Less Than 20%, Says Former Medtronic CEO Bill George

The Harvard Business School professor and author notes that start-up founders often underestimate the time it takes to prove commercial viability over the creation of the invention itself

Odds Of Building A Successful Business From Scratch Are Less Than 20%, Says Former Medtronic CEO Bill George
Bill George, former chairman and CEO of Medtronic
POSTED ON September 15, 2022 11:41 PM

Former chairman and CEO of Medtronic and a professor at Harvard Business School, Bill George believes that start-up founders should lead their organisations with their hearts, not just their heads. In his latest book, True North: Leading Authentically in Today's Workplace, Emerging Leader Edition, which he co-authored with Zach Clayton, Three Ships’ CEO, George notes that the era of baby boomers is drawing to a close.

A significant characteristic of those days is that leaders focused on maximising shareholder value and taking shortcuts rather than building sustainable enterprises serving all their stakeholders. Speaking with Outlook Business, George says that it is now time for the next generation of emerging leaders to focus on equity, equality and prosperity in equal measures.

Edited excerpts: 

Today, more people are turning their side hustles into full-time start-ups in search of entrepreneurial success. Yet, why do you think most of them fail?

Building a successful business from ground zero is an enormous challenge. The odds of success are less than 20 per cent. 

To build a company, entrepreneurs need to not only have a unique idea but also sustain adequate funding through the start-up period. This typically takes much longer than expected. Then they need to build an organisation of outstanding people committed to its mission and values.

Since every start-up founder has a different goal, how can they discover their true north to be an effectual leader?

Many founders try to build their businesses before they ground themselves in their purpose and values. Instead, they should focus first on discovering their true north from their life stories and crucibles. They should build their moral compass through self-awareness and values, finding their sweet spot that combines their strengths and intrinsic motivations, and building a support team around them. Then they will be ready to make the ‘I to we’ journey to identify their north star, or the purpose of their leadership so they can build an organisation around it.

What are the most important characteristics of a beneficial and efficient leader?

Today’s leaders need to lead with their hearts as well as their heads. The intelligence quotient itself is insufficient. That means, developing your emotional intelligence around your passion for the business, compassion for your customers, empathy for your colleagues and employees, and finally, courage to make bold decisions. 

Start-up founders often find that their initial business model is no longer unique. How can they pivot to identify their true north and keep changing their roadmap with the changing trajectory of this true north?

I do not believe their north star changes as it is your constant guide. However, leaders must continue to adapt rapidly to the changing markets and technology to find their unique place in the market and the strategy to get there.

Despite coming up with innovative technologies, what makes the road to commercial viability longer and riskier for start-up founders, especially in an increasingly tricky capital-raising environment? 

Depending on the nature of their innovative technologies, it takes far longer to prove commercial viability than to create the invention itself. Often start-up founders underestimate that time. 

That is why it is so important to have access to adequate levels of capital from investors or banks. This includes backup funds when things do not go as initially planned.

Why is it easier to talk about building an inclusive culture in a start-up than actually doing it? What stops leaders from doing it?

It is much easier to build a diverse culture than an inclusive one. The latter requires that everyone in your organisation feels like an essential team member and feels fully included in important decisions, that their opinions matter, regardless of their gender, race, religion, national origin or sexual identity. Then they bond around the greater purpose of the organisation. Too many leaders want to dominate the culture by imposing their views on the organisation.

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