Harvard Business School Professor Says 65% of Startups Fail for One Reason. Here’s How to Avoid It.


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In his book, The Founder’s Dilemma, best-selling author and Harvard Business School professor Noam Wasserman claims that 65% of high-potential startups fail due to conflict among co-founders. A daunting statistic to be sure, but it comes as little surprise to anyone who has ever tried to start a business.

It’s been said that the best time in your business is before you start building – when it’s all blue skies and big dreams. As soon as the rubber meets the road, however, you’re in for some conflict. While the cause of that conflict can be as varied and unique as the co-founders, the most simple explanation is that in the founding venture, you’re trying to bring two or more sets of ideals, values, perspectives, motivations, and a dozen other intangible, immeasurable qualities and merge them as one.

Don’t be fooled into thinking that you are immune to the perils of startup life just because you like your co-founder or that during the brainstorming phase, you feel completely on the same page. There’s still zero chance that you’re completely aligned across all the critical aspects of the business. How could you be since you’re each bringing your own uniqueness to the startup? Those differences, no matter how slight the misalignment, are potential problems spots as you grow.

So if misalignment is the problem, then alignment must be the solution. Alignment, however simple it may sound, is one of those buzzwords a high-priced consultant might toss around without providing a clear definition or a path to attain it. 

In the rest of this article, we’ll define alignment as a process and zero in on the benefits of having an aligned team.

Origins of misalignment

As the founder of your business you have an idea for what the business should be, who you should serve, and how. So you go about recruiting others to join your cause and do your best to communicate your vision to them, but the results are a mixed bag.

Try as you might your founding team members each have their own ideas on what they want from the company and how it should be run. As time goes by, these different visions of what you’re doing and how you should go about doing it magnify and can become more discordant until, at last, you find yourself at odds with each other, unable to work together successfully. This is misalignment at work, and it’s the inevitable death of any startup.

Maybe you think I’m being dramatic. Or maybe it’s that I know that most businesses fail due to co-founder misalignment – a fact I’m hypersensitive to since I have paid the high financial and emotional cost of leading a misaligned team.

So what are the benefits of proper top to bottom alignment? Well, “success” for starters… but that’s too broad. So here’s one.

Related: The Alignment Factor: the Map That Will Help You Sustain Alignment

Get to market… faster

When you’re starting a business, you’re on the clock to get to market before you run out of cash. This is called a runway. The longer it takes to get to market and start bringing in revenue, the more likely it is that you’ll die on the runway. How does alignment help you get to market and get into the black—that is, making money?

Misaligned teams spend a lot of time fighting or, at the very least, meeting to work things out. These endless meetings bog down your ability to do what you need to do to get out there into the marketplace. All the time and energy that you could be focused on building your business gets funneled into working out the team dynamics. Yikes.

Aligned teams, on the other hand, are able to get on with the work of building a business. They know where they’re going, and each member of the team can focus on the team priorities—the bigger vision—and move towards it. They’re able to do this because they know where the other team members are going, and there’s no question about what their priorities are or how to work together.

Related: The Four Levels of Organizational Alignment

Team buy-in

If you’re reading between the lines, then you already picked up on the second big benefit of alignment: buy-in. When people feel bought into a vision, it’s a powerful thing. It creates energy, enthusiasm, and momentum that can’t be matched by any other force.

Suddenly your team is actively working for the success of the business. In an instant, it becomes more than a job. It becomes an obsession. As a founder, you’re already obsessed with your business, but when your team gives themselves over to the success of it, too, that’s what creates unstoppable momentum.

When people feel like they have a stake in something—and not just with some money on the line but emotionally and intellectually as well—they’ll do anything for you. They’ll feel like they are part of a team, not just punching time on their job. They’ll go out of their way to bring their very best to the table.

Put differently, when people feel like they are part of something bigger than themselves when their work is aligned with a greater calling or purpose and not just making money – then all kinds of good will come out in them. They’ll see possibilities where others don’t; they’ll find better ways to do old things, and they’ll blow your mind with the passion they display and the innovation they bring.

Related: Finding Your True North: How to Align Your Employees With Your Customers’ Goals

Unlocking innovation

And that’s the third big benefit of alignment—innovation. Research shows that we can only think about a handful of things at one time, and so when we’re focused on the misalignment of our internal team, we don’t have the mental space to be creative. When everyone’s aligned, they’re happier with their work; more productive at it too.

Since they’re free to think about the business’ problems rather than the team dysfunction, you might find that creative ideas and solutions start springing up all over your business. Sometimes, that innovation is the difference between an okay business and a great one.

When starting a business or even trying to build up your existing business you will run into roadblock after roadblock – and you’ll need everyone on your team to be mentally agile to solve them. Research shows that a positive state of mind dramatically increases cognitive abilities and .

So back to the original question —what’s the ROI of an aligned team? I don’t think there’s a one size fits all answer to that question. It depends on what you’re building and how quickly you’d like to build it.

But I can tell you this—when everyone is aligned and has the same story in their mind, it makes for quicker decision making and better execution of whatever business idea because those decisions are being made by people who believe they’re working towards something meaningful. So the real question is—what’s that worth to you?