The media and social media are abounding with news & developments around the shocking death of CCD founder V.G. Siddhartha. While there could be a lot more than meets the eye and we might discover many facts and details which may change our perception about this particular case, one thing that glaringly stands out is that the life of an entrepreneur is very difficult particularly in a country like ours. ‘Lack of a supportive and conducive ecosystem for entrepreneurs’ would be a gross understatement. In fact, the environment in our country and too many harsh realities on the ground are immense roadblocks putting entrepreneurs to severe disadvantage and end up making their lives full of immense stress & hardships.
Read this piece on IndiaPlaza.com’s co-founder in TOI today. I cannot agree more and I am sure many entrepreneurs like me have gone through many such incidences during their business lives which have pushed them to the edge. While I am no expert on finance & legal matters, in our CEO Peer Group called Mavens, we have often spoken on what is the true meaning of the term ‘limited liability’ and what does the interpretation end up being? This TOI article wonderfully touches upon this and several other challenges.
There are three serious challenges that I have always thought & worried about:
1) The half-baked role of entrepreneurship ‘fosterers’ and harsh realities that await a wannabe entrepreneur
2) Role of Government authorities
3) Critical need for a long term support system for entrepreneurs
Challenge 1: The half-baked role of entrepreneurship ‘fosterers’ and harsh realities that await a wannabe entrepreneur
There are too many government schemes & departments and just too many private groups & organizations which ‘foster’ entrepreneurship. There are few which have targets (!!) to convert some ‘x’ number of unwary youngsters into entrepreneurs each year!!! I know one such organization which is founded & funded by a large business house in Pune. Its team consists of retired or almost-retired people who have worked as employees all their lives. They drive massive targets to convert young folks into entrepreneurs!! Then there are many industry bodies & associations (need not even name them!) who play a ‘placebo’ effect.
Is entrepreneurship that easy? Can helping someone start on his own be a major part of their ‘fait accompli’? Who makes this wannabe entrepreneur aware of the super arduous journey that awaits him/her and the challenges involved? Who will guide, handhold, support and if required salvage them? What happens when they realize that they have failed? Who will give them their lost years, lost confidence and lost opportunities (financial & otherwise) back?
A large percentage of businesses fail, many in their initial few years itself. With business environment getting harsher day by day, we are also seeing a large number of old & established, many being first generation, failing these days. There is an immense cost (of all sorts) associated with each business failing, of course the entrepreneur & his immediate family bearing the maximum brunt. When a large business like CCD or ILFS fails, the cascade effect is immense.
Entrepreneurship (becoming one or pushing others into it) should not be taken as a fad as it is being done today. Building a successful & sustainable business is not puppies and rainbows. One has to do immense due diligence, introspection, self assessment and preparation before taking a plunge into entrepreneurship which would be one of the most challenging journeys of his/her life! It could be immensely rewarding but it could be equally (if not more) back breaking too!!
There need to be formally created groups & forums (of experienced entrepreneurs preferably) who would guide wannabe entrepreneurs with ‘intellectual objectivity’ rather than naivety. Of course, informal forums are welcome in addition. I have been doing so at an individual level and Mavens has been doing so as a group.
Challenge 2: Role of Government authorities
Exactly three years back, it turned out that one of our one-time conference room customers had duped a few unsuspecting individuals by selling ponzy scheme to them. We realized this when these people started visiting our business center. They soon reported this to our local police station who immediately started visiting our center. It soon turned into harassment. This went on for a week with one fine ‘Saturday’ when I spent my entire day in the police station. By 11 pm, it was clear that the entire ‘discussion’ was now moving towards their ulterior (& real) motive. Fortunately for me, I had a friend who stood by me during this ordeal. Realizing that the drama is now reaching its culmination, my friend called up the Jt. Commissioner of Police (JCP). The entire transaction took a complete U-turn! A back-dated (with a date one month before) panchanama was done the next day! It was not found necessary for a month but suddenly it was required as the JCP sir asked the concerned police officer to report with the entire file. Right in front of us, many papers were removed from the file in hurry and a fresh set of papers were inserted. We were suddenly treated as respected citizens rather than as criminals. It was very interesting to see the metamorphosis post one phone call!
Before & after the above event, we have gone through many negative experiences involving Shop Act inspectors, VAT inspectors, MSEB officials and various other people. Everyone started the conversation treating us as offenders.
We keep hearing words like ‘ease of doing business’ and bombastic initiatives like Startup India, Skill India, Make in India and so on. While no one around me is aware of how these initiatives have helped entrepreneurs, at the ground level nothing has changed. I have heard of many people who have applied under SME loan schemes like MUDRA but yet to find someone who has successfully borrowed.
In speeches, great things are spoken about entrepreneurs: creators, nation builders, job creators, biggest contributors to GDP and so on! Why should they not get treated with respect unless someone is proven to be guilty of wrongdoing? Why can’t government departments & agencies be advised to behave like ‘service providers’ and ‘enablers’ and deal with these ‘nation builders’ with dignity with an objective of assisting and supporting them? After all, these government officials get paid and earn their livelihood out of tax payers money.
Challenge 3: Critical need for a long term support system
CEO is a lonely job. One of the major causes of loneliness is self-induced and is known as the Founder’s Syndrome symptomized by lack of communication with other people about their problems. The intensity of the CEO’s job, coupled with the scarcity of peers to confide in, creates potentially dangerous feelings of isolation among chief executives. However, if you want to succeed, there is no point in waiting for someone else or the Government to build a support system for you. You’ll have to find ways to tackle this problem head-on.
Leader’s actions reverberate and therefore leader’s feeling of loneliness becomes a larger problem for many other stakeholders. For a leader, feeling lonely in their post negatively affects their ability to do their job leading to poor decision-making, negativity, fatigue and frustration. After all who wants to work with an unhappy person?
What entrepreneurs/CEOs need is a trusted group of peer CEOs who can form a ‘backbone of support’ for each other. As SMEs, we have a very limited appetite to digest failure. Likewise, we also may miss out on leveraging (or fully leveraging) the opportunities that are offered to us. A ‘backbone’, in the form of a CEO Peer Group, has an immense potential to ensure success and reduce/avoid failures. A CEO Peer Group plays a threefold role in ensuring success of an entrepreneur:
1) as an Advisory Board (/informal ‘Board of Directors’),
2) as a Learning Platform and
3) as a ‘mirror’
What CEO Peer groups should ensure is to cumulate knowledge & learning that each member has and through effective brainstorming translate this combined body of knowledge coupled with cumulative experience of the group into ‘direct application’ to a member’s business. The advice gained through these discussions make a lot more sense because fellow members know each other’s businesses very well. This can happen in reactive mode by picking up various business problems & opportunities of a member for discussion. However, even greater gain results when the group induces the member to think beyond the boundaries and to think of innovative offerings, minor/major improvements, newer & effective ways to do things etc.
A well advised entrepreneur will make lot lesser mistakes. A CEO Peer Group with good diversity will have all the skills in-house because some of the members would be CAs, lawyers, consultants (from various spheres) and of course entrepreneurs with a wide gamut of experience. As a result, every discussion topic will get vetted in every possible angle.
While direct, relevant advice to fellow members forms the cornerstone of a CEO Peer Group, continuous learning is another crucial objective. Successful people never stop learning. Lifelong learning is the first step in becoming an outstanding performer. A famous quote by Gandhiji says “Live as if you were to die tomorrow. Learn as if you were to live forever.”
You take formal training for everything – your formal education, swimming, driving, music, dramatics etc. However, something that every entrepreneur spends several decades on, we never take any formal training. This is absurd isn’t it? A CEO Peer Group brings the benefits of an educational institute to entrepreneurs by serving as a B-school for entrepreneurs.
If entrepreneurs are truly national builders and job creators, it is not only important that their business lives should be free from ‘avoidable’ hurdles, it is highly important that their longest and most challenging journey is fun-filled and certainly not alone & full of stress!