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Today’s post comes from Uri Levine, the Co-Founder of Waze which was acquired for over $1 billion dollars by Google. Uri is also the first board member and investor of another company called Moovit which was also acquired for $1 billion dollars by Intel. Uri is also the author of Fall in Love with the Problem, Not the Solution: A Handbook for Entrepreneurs which is a great book for all business leaders.

Here’s Uri…

Why do start-ups [and teams/businesses] fail?

I’ve posed that question to many entrepreneurs after their start-up was shut down, and about half of them said, “The team was not right.” “What do you mean the team was not right?” I kept on asking, to which most of them replied, “We had this person who was not good enough.” Another reason that I’ve heard quite often was, “We had communication issues,” which sounded to me more like, “We had ego-management issues”.

I then asked the more important question, “WHEN did you know that team was not right?” the scary answer was, “Within the first month.” All of them said exactly that.

Wait a minute, if the team was not right and the CEO knew that within the first month, the problem was not that the team was not right – the problem was that the CEO/leader didn’t make the hard decision required to build a strong and successful team.

Making easy decisions is easy – making hard decisions is hard, and most people don’t like to make hard decisions, mainly because you need to assume responsibility for the results. The problem amplifies as in a small organization, most of the hard decisions will be for the CEO or leader to make, and this is where it becomes complicated. In a small organization like a start-up, nearly everyone is involved with everything. Think of a small team or even a group or a class that you were in and ask yourself: If there was someone that didn’t fit – would you know it?

The answer is of course you would, and it doesn’t matter if that someone doesn’t fit because they are underperforming or because that person is unbearable – everyone knows, period. If everyone knows that, and the CEO or leader doesn’t do anything there are only two options that cross the mind of everyone else:

1. The CEO/leader doesn’t know, which means the CEO is clueless and this is not good.

2. The CEO/leader knows and still doesn’t do anything – that’s even worse, as it indicates the CEO lacks the leadership to make hard decisions.

The result, by the way, is always the same – the top-performing people will leave because they don’t want to be in a place that lacks the ability to make the right and hard decisions, and they will leave because they have a choice.

So, what should the CEO/leader do?

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