One of the three almost devastating mistakes I made as an entrepreneur

Introduction

As an entrepreneur, I have made many mistakes and I will write about them in due time. Out of the numerous mistakes I made, three in particular almost devastated the company I co-founded. Today we will talk about one of those mistakes.

The objective of this story is not Mounir but the decisions and lessons that we share that many entrepreneurs could be facing.

My personal background

From 1984, the time of my first assignment as an assistant engineer, until 2005, I was either studying or mostly working in various roles, initially in engineering but since 1990 in project management roles — but — on industrial projects (technical). During this period I managed projects, I was involved in process improvement initiatives, among other things.

In 2004, a few friends and I launched SUKAD. In 2005 I left Saudi Aramco (with more than 50,000 employees) to lead a start up with one employee – yours truly. My wife joined me as part time and a colleague’s wife joined me on part time basis as well. In 2006, we had our first full time employee.

The points from above to reflect on later are: (a) technical degrees, (b) project management roles but in technical environment, and (c) large or huge organizations.

The-SUKAD-Team-at-Dubai-SME100-Award-CeremonySUKAD and my role

We started SUKAD because we saw a gap – an opportunity – for project management training and consultancy in the countries of the Gulf Cooperation Council (GCC consists of Saudi Arabia, United Arab Emirates, Qatar, Kuwait, Oman, and Bahrain). The gap was not limited to GCC but spread across West Asia in general.

As an entrepreneur, with a start-up, we did realize that I needed to do all, from cleaning and filing to delivering high-end consultancy for large clients and conglomerates. However, the big question that was haunting us from the beginning, especially as we start to have full time staff, is the following: “should Mounir focus on leading the company and deliver services – and/or manage the company?” What does this question mean? Let me elaborate on the roles:

  1. As a leader, I have to keep my eyes on the vision, strategic direction, among other long-term objectives and mid-term strategy to ensure SUKAD grow and deliver on its mission.
  2. As a manager, I have to worry about marketing, sales, accounting, audit, licensing and registration, hiring and visa issues, staff management, among other details.
  3. As a consultant, I work with clients, deliver consultancy services, conduct training, develop courses, in addition to leading our research and development program.

In the early days, I had to wear the multiple hats, in addition to being the janitor. Yet, the question kept coming back, especially as SUKAD was growing.

In our mind at the time, it would not make sense to continue with the multiple hats … one role would be ideal but if we must then two, three or more and we lose focus. With that mindset, we explored our options:

  • We could replace Mounir as a consultant, but that would not be good since Mounir has valuable global expertise to share. Further, many clients insist on Mounir to deliver services to them. Then this option was out!
  • Could we replace Mounir as the leader? That was not possible since Mounir is the drive behind this organization and the only partner with significant expertise in project management. This would be possible if we shift our strategy to being commercially driven instead of customer-centric (this can be a long discussion). Then this option was also out!
  • We could replace Mounir as a manager. This was possible, funding permitted, and that would free Mounir to focus on items (1) and (3). Further, Mounir (I) do not like to manage. That does not means I could not (or I am not) a decent or good manager … I just do not like to manage, especially in a small company environment. The decision – find another manager for SUKAD.

The mistake

As a small company – wanting to grow – especially in a booming market (UAE / GCC market was booming between 2005 and 2008) we decided in the summer of 2008 to act on the decision above and bring in an “operation manager” to take the lead for all of SUKAD operating activities while Mounir focus on leadership and professional services. The idea was – within a year, that person would also become the CEO to free me of other day-to-day business.

Why was that a mistake?

For many reasons:

  1. The company was still too small to sustain a senior manager or even a CEO replacement
  2. We had limited funds and the salary of a senior manager is substantial on a small service provider
  3. In a small company – with the founder still involved – it is very difficult to let go
  4. The person we hired – highly qualified – PhD – etc. did not fit our culture and from the start there were too many conflicts
  5. The final factor – is external – this person mobilized at the end of 2008 – just in time when a global crisis was sweeping the globe and Dubai (where our offices) was hit hard
  6. There was another internal factor – not specific to the decision that contributed to making the situation more difficult.

Looking back, the main mistake was that we let emotions be the main factor in the decision making and not smart business planning. What we mean is the following: although there were good justifications to bring in an operation manager, especially with Mounir being more valuable to SUKAD as a leader and consultant than a manager; the decision was flawed. Further, Mounir (I) not liking to manage was a major driver. The problem was in not performing proper analysis of all the risks and performing good business analysis to justify the position.

Our keen drive to avoid “management” led us to repeat the same mistake again in 2011. The circumstances were different but the underlying drivers continued to be – that I should focus on leading and consulting instead of managing. For various factors, the move in 2011 also failed.

The lessons

After failing twice – repeating the same mistake – and almost bankrupting the company we learned our lessons. So we shifted our focus, we accepted that I should balance leadership and management while limiting my consultancy and training work as much as possible. With valuable team members in place now, we are able to count on them to manage pieces of the work instead of replacement to Mounir. That does not mean we are not looking for a successor but the next time, the business has to be strong enough to sustain such a move and possibly from inside SUKAD someone can step up to take the leadership role.

The moral

I would probably write articles that are more specific about entrepreneurship in the future and cover successes and failures. For now, the moral is that people with passion for something – whatever that is – often rush into launching a business without truly understanding what it takes. Another point is to take time to understand our decisions and their consequences – negative or positive.

On a related note, the entrepreneurship ecosystem, at in least in West Asia and other developing regions/countries, is still weak and does not provide enough support. In recent years, there is a push for entrepreneurship and the word entrepreneur is becoming trendy and cool, almost in a negative way sometime. Therefore, we think the risk on people is higher since due of the hype they might jump into business because it is fashionable rather than because they are, ready and fully understand what lies ahead.

More to come – in due time.

In the meantime – do you have a story to share? We would love to hear it and publish it if there are good lessons to learn.

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About Mounir Ajam

Mounir Ajam is eager to awaken the giant of project management within individuals, organizations, and nations! Mounir is a project management author, executive, consultant, and social entrepreneur. Mounir is open to further learning and knowledge sharing.He has global experience working on projects in the United States, Europe, South East Asia, West Asia, and Africa. He has been privileged to work on multiple small projects and mega projects.