Believe it or not, nobody who ever scaled a successful business from the ground up, did it alone.
If you’ve had the pleasure of pitching to investors, you’ll start to notice a common theme in questioning. “What makes you the right person to execute this idea?”; “Tell me about your team”. The team slide is one of the most important elements to any pitch deck. And for a very good reason.
I’m sure you often ponder about where Steve Jobs would be without Tim Cook? Even James Dysons’ talent might not have been discovered if it weren’t for Jeremy Fry.
FACT: One of the top three reasons a start-up fails is down to not having the right team.
This is only third to running out of cash.
Top-20-Reasons-Startups-Fail-CB-Insights
Therefore, your team, especially if you’re an early stage start-up, is much more than just a sweetener to prove you’re investable.
Sam Altman, founder of the prestigious Y Combinator accelerator, says:
Mediocre people at a big company cause some problems, but they don’t usually kill the company. A single mediocre hire in the first five will kill a start-up.
Not really a shocker, but human relationships are complicated.
Managing people is hard.
Over the last 17 years of managing multidisciplinary, geographically dispersed and culturally diverse project teams (CV speak), experience has taught me that there are a broad range of considerations when hiring an effective team for a large Corporate and sometimes even bigger considerations when building a start-up team. After all, a single weak link can affect performance noticeably, and can even knock you out the game.
So let’s talk about how to make sure the people we hire and entrust to turn our babies into companies that will scale and exit, have the skills to get the job done and are also the super hero’s we need.
Here are the six ultimate steps you need to take.
STEP 1 – It starts with you.
A successful start-up needs a solid foundation. At a high level, this is essentially a team who is committed, understands the company’s vision, is bought into a collective mission and executes to bring it to fruition.
This starts with you.
“Research has shown for a long time that self-awareness is a critical trait of successful business leaders,” said John Hackston, Head of Thought Leadership at CPP.
Business psychologists CPP, Inc.* conducted some research on self-awareness and the results were concrete. Respondents said they were able to:
Be more self-aware (74 percent)
Capitalize on strengths (85 percent)
Make better decisions (61 percent)
Become a more confident leader (64 percent)
Feel more confident in contributions at work (67 percent)
If you’re not on the path to enlightenment, I suggest you start here.
And if you want more proof, check this out.
Self awareness leads to better team performance
However. Even if you have been working on your best self for years, you still won’t have all the skills needed to build a successful business on your jack jones.
Take an objective view and evaluate what you’re good at and what you could improve. Focus on the things you’re good at and find competent people to do the rest.
And remember, this is not just about hard skills.
STEP 2 – If you’re Batman. Find your Robin.
Solo founder? Good luck. Being a one-person team not only sucks but your venture is more than likely going to fail.
Research supports this:
Solo founders take 3.6x longer to outgrow the start-up phase.
My advice to each (would-be) founder is this: find AT LEAST one person from a different discipline to join you. Ideally, you have a combination of people that covers the holy start-up triangle: hipster, hacker, hustler (aka designer, engineer, marketeer.)
Because if you’re with good people from the start, making something your customers actually want becomes 100X easier.
The long hours become way more bearable.
You can pull each other through the lows and celebrate the highs.
Your perspective changes because now you’re with a team, working on something you believe in, with people you can learn a lot from. And that by itself is worthwhile.
Individuals don’t build great companies, teams do. – Mark Suster
STEP 3 – Up your EQ. Soft skills are everything.
Stellar teams have it all: hard and soft skills To successfully perform, you need a balance of both. Link to a % statistic.
What are hard skills? Being able to read, being able to code, technical knowledge, tie your shoelaces…. It’s something you can teach, measure and define. You will be looking out for these by default. After all, you aren’t going to hire a plumber to write your code.
Soft skills are harder to measure (objectively). They are what used to be considered warm and fuzzy things that a lot of corporates ignored but have become very fashionable, and globally recognised as equally important as having hard skills.
According to a 2016 Deloitte Human Capital Survey, “93 percent of employees see soft skills as either equally important to technical skills or more important than them.”
They are indeed important. Why? You cannot effectively work in a team without them. They are so important for a positive company culture, especially if you have a multidisciplinary team that is geographically dispersed and / or culturally diverse.
Think of soft skills as the personal traits you need to effectively and peacefully co-exist with other humans; also, knowns as “people skills” or “interpersonal skills”. When your employee is late for the 4th time this week because their kid is sick, you will need to invoke them: communicate, listen and be empathetic.
Don’t worry; you can work on these.
Make sure you ask the right questions in the interview that will stop you from hiring a sociopath.
Remember, the start-up environment is an exciting mixture of business, passion and high emotions – all intertwined, particularly at early stages. You and your team need to be able to keep your heads.
STEP 4: Determine the right the right mix of “roles” you need in your team
Hiring a team is like baking a cake. You need 6 ingredients.
Think of “roles” as ingredients for a cake recipe. Miss an ingredient out and the outcome is usually detrimental to the taste test. Not only that, miss out baking powder – and it won’t rise. Team’s need to rise.
Here are the core roles any start-up or small team should aspire to have.
The Industry Veteran
Often an Adviser, this person will know the ins and outs of the industry and understand the competitive landscape. This is rarely a specific role, but their responsibilities may be covered by your Product Genius. “It takes a long immersion in the marketplace to call yourself an insider, to understand the subtleties of the competitive landscape, to recognise people as true assets, and to look through the propaganda of technical collateral and PR campaigns,” Schoner notes. “The industry veteran has seen it and knows how everybody else does it.”
I like to think of these individual(s) as industry Thought Leaders. They will help you make the right decisions, utilise their professional network and help you avoid big mistakes.
The Creative
This person lives outside the box. Laterally, they are always coming up with creative ideas and finding ways to innovate. It’s a core competency very start-up needs. In a small start-up, this is likely to be someone that sits under another role, or they might be your User Experience (UX) lead or Marketing manager in which case they would be the person who also creatively captures your brand, through artwork, copy and marketing n a way that captures the interests of your customers. They are here to inspire.
The Team Leader
Democracy is everything, particularly in a start-up with more than one founder. But let’s face it. Shit happens and hard decisions needs to be made that affect everyone. When it hits the fan, you will need a person who the team looks up to. Schroner says “It doesn’t mean they’re paid more or have more equity, and they’re not necessarily the CEO.” If that person in the team that others respect and are willing to follow. This person should be trusted by the CEO to share his or her vision and help put it into action in moments of conflict or critical decision. They step in to guide the team. They are also naturally motivators, keeping the team together and setting a benchmark of excellence. Link to what your CEO wants you to know.
Focus:
Encourage collaboration, keep the team aligned, functional and motivated,
Skills:
The data doesn’t like. 97% of employees agree that lack of alignment in teams impacts their performance negatively.
Skills required for team rapport
The Technologist
If you’re a tech start-up, then this is a prerequisite. Depending on the stage of your start-up or size of your organisation. You will either need a CTO (often an Engineering Manager or Head of Software Development) or A technical Lead d. Your Tech Lead will be a software engineer, normally possessing backend and front-end skills (full stack developer). They are responsible for establishing a technical vision with the development team and working with that team to turn your product into the bug-free, super slick product that you dream about.
Focus:
Hands on coding (approx. 30% of their time), Planning, execution and defining technical options and time estimates for future planned work.
Skills:
Solid knowledge of technical architecture, Great communication, ability to maintain trust and empathy with the development team, be able to resolve conflict and heated technical debates, be able to translate tech talk into simple English (and Business speak) for you and other stakeholders
CTOs, CIOs and Heads of Software development are often vert far removed from a development tea and rarely code.
The Product Genius / Growth Hacker
Your product manager’s goal is to deliver a product that customers love! They are aware of all the market trends and understand marketing best practices and their job is to get you as close to product market fit.
They also understand your customers unique pain points and is constantly seeking feedback from them.
Focus:
On the bigger picture, Product specifications and requirements; appraising new product ideas and / or product or packaging changes
Skills:
High emotional intelligence, Curious, Problem solver, Creative and thinks out the box, Passionate, Willingness to learn, Great researcher, Great communicator and obviously Market Knowledge.
Master these skills to become a better Product manager or make sure the person you hire ticks these boxes.
The Finance Expert
On the assumption that you want your start-up to make profits and manage avoidable risks, or at best if you don’t want to get robbed by financial influencers who have their own agenda (professional controllers and chief risk officers) then you need someone to handle this function independently or get a skilled co-founder who is also in charge of overseeing the finances. It will give you peace of mind. Remember, there is a delicate balance between raising and having enough cash to execute your business versus not enough to invest in business growth ― and a poorly managed cash flow is a the second cause of business failure.
Focus:
Reduce the levels of debt within your business and manage initial investments to make you profitable, manage operational expenses, think about asset creation, cash flow management and making sure you don’t sink.
Skills:
Commercial awareness, initiative, good problem-solving skills, analytical, IT and numerical abilities are a must. They also need to be able to generate financial models, reporting and planning materials.
Give your start-up the financial controls it deserves.
The Operational Leader
If you want to build a successful business, it needs be run like one. This person needs to be able to ‘get shit done’. They proactively seek problems before they occur so they can be mitigated. They are customer focussed and are always thinking about the future roadmap.
Focus:
Agree targets with the founding team, risk management, develop a business strategy and objectives, outlines and articulate roles and responsibilities and governance structures, working closely with your Finance Wizard in managing financials and forecasts, creating internal processes.
Skills:
Proactive, organised and process driven, be able to juggle, responsive to change, a problem solver and super-efficient. This person needs to be a G.
The Sales Mastermind
OK. So, facts. Everyone in a start-up should really be selling, especially the Founders and CEO. But assuming you are lucky enough to have a dedicated person,
Sales is nothing else than results-driven communication.
“Selling is not a pushy, winner-takes-all, macho act. It is an empathy-led, process-driven, and knowledge-intensive discipline. Because, in the end, people buy from people.”
-Subroto Bagchi, Co-founder of Mindtree
Focus:
Understanding your customer’s needs, their goals, challenges and obstacles; they know your demographic inside out and are always asking ‘who is this person I’m selling to and what do they need?’
Skills:
Serious interpersonal skills, this person must be amicable, patient, they must be able to handle rejection and failure, and learn from mistakes.
If they aren’t getting rejected, they aren’t selling enough. Simples.
Whatever the mix of roles you determine you need, make sure it’s diverse. If everyone in your team has the same personality, is from the same culture, all work in the same way and all think the same then you’re going to have a pretty dry team. Diverse teams generate better ideas, challenge each other’s and will have different strengths and weaknesses. You don’t want a homogeneous, robotic team.
STEP 5 – Hire the right people
This process sucks. No matter how seasoned you are at recruiting, the process can be very challenging. Often you will have a number of candidates who look great on paper, but who don’t shine in the interview or who don’t fit your company culture. Then you will have a couple of gems who want too much compensation or will accept the position, only to leave for a better opportunity. But then, when you are lucky, you find the right people and the magic happens. But it doesn’t happen overnight, so it’s really important to set yourself the right (conservative) timelines and expectations when hiring your core team. The challenge is to not settle. And remember the soft skills requirement. It’s so, so important to hire people who are passionate about your vision. Do not tick boxes and do not negotiate too low. After all, “If you pay peanuts, you get monkeys.”–Chinese Proverb
You can check out the following sites when you are looking to hire:
STEP 6 – Define your company culture
Please remind yourself of STEP 3 – Roles, and the importance of a Team Lead.
Now think about culture. What do you want the culture of your team to be? Make sure whatever your company values are, that the actions and behaviours that the leaders exhibit, are aligned to those values at all times. Consistency is key here. You don’t want to give missed messages and cause confusion, within your team as to what behaviours are acceptable. Other effective ways to run the team and keep them motivated include:
As Jim Collins said, “The moment you feel the need to tightly manage someone, you have made a hiring mistake. The best people don’t need to be managed. Guided, taught, led–yes. But not tightly managed.”
STEP 7 – Hire slow, fire fast
Get rid of dead wood, fast. Save the tree.
Someone who is disengaged, routinely does the minimum to get by, constantly suck energy from the rest of the team and leaves then demotivated is toxic for the team.
Don’t ignore it. Avoiding conflict and awkwardness might feel like an easier short term solution but in the long term, one bad apple can detrimentally affect your business.
How?
Lower productivity for starters. If you were told that your business was going to be 20% less effective every day or limit growth by 20% wouldn’t you do something about it? Well one person is a team of five makes up 20% of your business.
You could lose other team members.
You could lose the respect of your other employees who might be unforgiving of your lack of judgement.
The vast majority of UK businesses identify disengaged employees as one of their top three greatest threats, but very few will do anything about it.
After all it’s much easier not to, right?
So what can you do about it?
First you need to listen and communicate. Not all employees who are disengaged are dead wood. Get to the root of their problem (excuse the pun). Do they feel stagnated? Are they not being recognised for their contribution? Do they want to grow but can’t? Do they need training if they are finding the current environment challenging?
Set up a meeting to discuss both yours and their concerns, provide feedback, set expectations and put in a few clear steps and growth path on how to improve behaviours that will result in a positive outcome for both them and your business.
However. Sometimes dead wood. Poor work ethic, unwavering bad attitudes and laziness are often traits that cannot be tolerated. Make sure you have a proper process documented to deal with it in a professional way. Deal with it directly and discreetly. Avoid getting into an argument. Don’t ever make it personal. Afterall, you don’t want an aggrieved employee suiing you.
Firing an employee due to gross misconduct is not be taken lightly and is a complex process. You can find out more here.
CONCLUSION:
Hiring the right team is one of the most important activities you will ever have to get right as a Founder. Your team will accelerate or stunt the growth of your business.
First, accept that a united and productive team starts with YOU. Get your shit together and empower yourself with the awareness and soft skills you need to manage an effective team.
Then, if you are in a fortunate position to transition from relying on family and friends to finding funds to hire an effective team, your next step will be to identify the team “roles” that your start-up needs. At a minimum, if you are a tech company you need a Technologist and a Product Genius. The responsibilities of some of the other roles can be taken up by the Founding team and external agencies or consultancies. And then there is Google. Google is your best friend.
It starts with you.
If you’re Batman. Find your Robin.
Up your EQ. Soft skills are everything.
Determine the right the right mix of “roles” you need in your team.
Don’t settle when hiring.
Define your company culture.
Hire slow, fire fast.
Whilst you need to keep your expectations high, and never settle for poor performers, you should already know that as an Entrepreneur you need to be adaptable and be more than great and doing more with less. Especially with time and people. So get ready to wear multiple hats.
Remember to build your team with the long-term vision in mind and if you follow these tips carefully, your chances of building a founding team that will last will be significantly higher.
Stefan the Head of ….at KCL says “”the thing that will decide your fate is not lack of money, its people. The more you understand what motivates your core team the better”.
Your Business model and product will follow if you have the right people.
Two last things…
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Over to you. What have been your challenges or tips in hiring start-up teams? Leave a comment below.
Be Brilliant.
Danielle
*CPP, Inc. (publisher of the Myer-Briggs Type Indicator (R) (MBTI(R)) assessment)
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