Week 5: We All Have a Role to Play

As we discussed in week 4, building a team is one of the more critical responsibilities of the founder. This week, we explore some of the challenges associated with matching the right people with the right roles. The Founder’s Dilemmas (Wasserman) points out some of the critical decisions that founders must address when deciding on executive roles. Of particular importance is the selection of the founding CEO, which is the focus of Part 1. Then, in Part 2, we will explore finding hidden talent and hiring for attitude and training for skill.

Part 1: The Role of CEO

The CEO is the top of the pyramid, meaning that final decision-making authority rests on his or her shoulders. As one of the founders, you should have an honest conversation with yourself if this is something you really want be to be responsible for (and if you can see your great idea through without that power). Some founders are great with ideas and specific technical or functional expertise required to bring a new idea to market, but don’t want the responsibility of making the tough calls when there’s disagreement among the c-suite executives.

The first CEO must be visionary in chief, working with the other founders to hone the direction of the company. This requires that he or she be what Wasserman refers to as an “idea person”, which his research shows is more likely of the CEO and usually corresponds to higher stakes in the company.

Part of that visionary role is demonstrating outstanding communication skills. He or she must communicate the vision to new hires, investors, and the public in a way that wins hearts, minds and dollars. Each of the people added to the team after the founders must understand what the bigger purpose of the organization is and how their role contributes. They must want to give their all for it, so a great communicator will help maximize their contribution. The first CEO will play a critical role in telling the story of the company to new investors, so the ability to connect with them and encourage their participation will be particularly important early on in the life of the organization.

In his Forbes article “How to Become a CEO” Christian Stadler mentions listening skills among those communication skills most important to achieve and succeed at the top job. It helps when you are responsible for the final decision if you are able to fully leverage the knowledge and experience of those around you.

Beyond these skills, the founding CEO must also be someone who has great passion for the company and its future. He or she will likely be making many personal sacrifices initially for the good of the company, so entering the job fully committed is essential. Often the first sacrifice is a willingness to give the company his or her full attention and leave the security of a full-time job to focus on the business full-time. This level of risk must be fueled by a confidence that the investment will pay off.

The top job isn’t for every founder. Choosing the right member of the founding team to assume the top job can go a long way to ensuring the long-term success of the company. Think hard as you consider the job for yourself…it is a demanding role that will call upon your skills as visionary, decision-maker and communicator for the company to succeed.

Part 2: Hire for Attitude and Train for Skill

Bill Taylor’s Harvard Business Review article “Hire for Attitude, Train for Skill” points out that hiring people with the right attitude can help differentiate your company among competitors. The assumption that hiring someone that already knows how to do a job is better than hiring someone you need to train on the surface looks like a no brainer. When you look closer, you might realize that with experience comes bias regarding “the right way” to do things. The industry standard approach may be the opposite of what your startup is going for when seeking to reinvent the experience a customer can expect.

Hiring for attitude also creates an opportunity to identify diamonds in the rough in the hidden talent pool. Herrenkohl’s How to Hire A Players suggests looking for those looking to reenter the workforce, those looking to exit corporate environments seeking more flexibility, and great people in service roles or jobs that are demanding and undercompensated who would be eager to find a place that values their hard work and great attitude.

If you are willing to think outside of the box when making your next hire, you might consider hiring someone with the right attitude and teach them what they need to succeed. This helps maximize work ethic and fit with the organization, and minimizes the challenges associated with approaching a job in the same boring way it has always been done when creating something new and different.

Week 4: Building Teams

Building a solid and productive team is one of the most critical roles of a startup’s founder. Wasserman’s The Founder’s Dilemmas points out some of the benefits and risks associated with assembling a team that is very homogeneous versus one that is more diverse. Here is a quick summary of many of those points:

Homogeneous  Teams

  • Short-term benefits include ease of finding people, speed of decision making, quicker to develop productive working relationships, easier construction of shared organizational identity, and less risk of conflict.
  • Longer-term risks include overlapping human capital resulting in overlapping strengths and gaps in expertise. There is potential for a shortage of creativity, greater difficulty in times of turbulence, stunted growth when friendship supersedes the best interest of the business, and a narrower network for identifying investors and employees.

Diversity and Counterbalance

Even more important might be the likelihood that homogeneous teams tend to have similar tolerance for risk and share similar values. This can make for a more stable partnership, but could also mean that there is no counterbalance if the team is too risky or too risk adverse. They may share priorities and preferences, but might struggle to counterbalance each other when their shared preferences are not in the best interest of the long-term success of the company.

Hiring a Great Team: A Competitive Advantage

Harrenkohl’s How to Hire A-Players  points out that having an incredible team of high performers can be a significant competitive advantage to the organization. He points out that your business should have the leadership to continue on without you, so it is essential to have the right people in place and to give them the autonomy and authority to do great work. This requires, as we have discussed in previous posts, that the founder must be willing to give up decision-making control and resist the urge to micromanage.

Hiring great people attracts other great talent and creates a virtuous cycle of success. Not only are current people more likely to be retained when they are surrounded by excellence, but they are likely to continue to be engaged and perform at the highest level themselves. This positions everyone for the opportunity to advance their careers as the company grows and thrives.

Selfishly, as the founder it is in your best interest to hire great people even though it means yielding some of your control. Doing so will allow you to have more balance in your own life, as the company’s growth becomes a shared goal and not one that you alone must realize.