Week 8: Managing Transitions – Next Level Planning and Thinking

Next Level Planning

Many startups struggle to adapt to the changing circumstances they face once they start to gain some traction and begin growing. Conceptually it makes sense that the skills required when the company is struggling, underfunded, and understaffed might be very different from when the company has investors, a strong leadership team, and is starting to pick up serious steam. The question for the founders is if they were the right leaders for the startup stage only or if they can also adapt and continue to play a valuable role as the company’s needs change. Embedded in that question is whether the founders can yield some of the control they enjoyed to access the funding and leverage the human capital available to shift into growth phase.

It is not unheard up for a self-aware founder to recognize that it is time to make a transition and turn over the reigns to the professional team. More likely, however, is that the board will initiate the transition and the founder will resist. This can put the whole organization at risk, distract the leadership team, and deflate some of the growth that the company is enjoying. A better approach to the selection process is to identify what this stage of the company’s life requires in a leader and carefully avoiding the tendency to either choose someone very similar to the founder or someone who is diametrically opposite.

Open conversations and planning for succession is a best practice. This allows everyone involved to have time to process the change, rather than it coming as a complete shock. Even still, it is likely that it was either misunderstood, not taken seriously, or completely missed by the founder. Ideally, the founder can get ahead of the board and initiate the succession themselves on their terms.

Next Level Thinking

Glenn Soloman’s Fortune article Transitioning from a Startup to a Growth-Stage Company gives some sage advice for startups that are on the brink of transition.

  1. Hidden Gems – Identify who your stars are and what they are doing differently to see if it can be taught to others. Carefully consider if this star is someone who needs/wants to advance or if they are happy being rewarded well for playing their starring role. Doing more of what is working really well can help take things to the next level.
  2. Find your flywheel – Cultivate and nurture sources of rapid growth that you can unleash when needed to propel expansion. Pressure to grow and continuously hit financial targets means you need to have some aces in the hole.
  3. Stay focused – Don’t get distracted from your core business. Stay tuned into the market for growth opportunities, but don’t bet the farm on whatever is new and shiny at the peril of your main business activity .
  4. Professionalize your process – It may be contrary to your startup culture, but finding ways to improve processes and add structure will position the organization for success in the longer term.


Week 7: Investor Dilemmas

When all of the financial investment comes from the founders, things are less complex. Although the founders have assumed all of the financial risks by self-funding their venture, they will also maintain control including how the financial rewards are dispersed. Each of the other types of investment  have varying levels of funding accessibility, value to the company, and risks to the founder as pointed out by Wasserman in The Founder’s Dilemmas as outlined below.

Friends and family – Although the size of these investments are small, they are the easiest to secure. Usually these investments don’t add a lot of other value beyond the funding. The risks to the founder are significant. Asking friends and family to invest can send an unprofessional signal. These investments don’t usually come with a lot of formal strings attached, so the possibility that founders might pursue less fruitful ideas is real. The most significant risk is the one to the relationships with each investor. It is good advice to refuse these investments if there is a significant risk of loss, as the risk to the relationship is probably not worth it at that point.

Angel investors – The size of these investments are usually medium to large, as the angel investor is looking to invest his or her personal wealth with a goal of profitability. This type of funding is often more available than you might think (and almost certainly more than friends and family can invest) through networking and angel forums. It is possible that these investors could bring significant business experience and want to be directly involved on the board. Additionally, most angel investors have strong social capital, which you can leverage as needed. Risks associated with angel investors include the potential that oversight and assistance may not be as strong. It is also possible that your angel investor may be difficult to manage. Having angel investors in the mix can make things more challenging later on when looking to add additional investors.

Venture capitalists – Venture capitalists will be looking to invest much larger sums of money, but will expect to be brought in as partners, take an active role on the board, and be in regular communication with the founders. This is the hardest source of funding to access, but sometimes angel investors can facilitate an introduction. This funding is greater and more predictable than that of angel investors. Venture capitalists bring significant social capital to the table. It is a very good sign for the business when it receive VC funding, so the reputation and brand could get a bump as a result. There are risks to the founder related to both wealth and control:

  • Wealth risks – Venture capitalists demand equity stakes in the company. The effect is a diluted stake for the founder. Arrangements regarding liquidation can impact exits from the organization. Typically, founder equity is going to be vested outright, which means that allocation among the teams will also be impacted.
  • Control risks – Venture capitalists may expect additional board seats, which can make the founder’s control of the board weaker. If the VC receives preferred stock, supermajority voting might be a reality and cause conflict related to a differing financial risks from founders.


The lessons from The Founder’s Dilemmas continue to point to the complexity of the decisions a founder faces. On the surface, especially in a cash strapped startup, it would be tempting to accept funding from ANYONE who is willing to invest in your dream. Recognizing the risks and trade-offs associated with each source of investment can really help a founder make careful decisions and negotiate the best possible position for the founders and the team.

It is a reality that a false move with an investor can result in the founders ending up with nothing to compensate them for the hard work they have put into starting and building their company. It is also a reality that control can be completely lost if consideration for decision-making power and balanced representation for voting are not taken into account. Ultimately, it comes back to the lessons at the beginning of the book about consciously choosing between wealth and control.

Week 6: Hiring, Recruiting, and Retaining

The decisions of who to hire, from what pool, and when are more tricky than they appear. Unfortunately, there is no “magic formula” for which strategy works best when approaching these decisions, so Wasserman’s Founder’s Dilemmas  offer some useful considerations.

Hiring friends and family can be great…or terrible. The fact that you know and trust these folks is great and your comfort level will likely be very high working with them. Mixing business and personal can make communicating bad news more difficult on both sides. It is also possible that you could be blind to mistakes or lower productivity that would have been much more obvious if it were someone else.

Bplans’ Scott Huntington suggested the following in his article 5 Things to Consider when Hiring Friends and Family.

  1. Is he or she qualified for the job?
  2. Did you hire the person for the right reasons?
  3. Will they disrupt your place of business?
  4. Is the person trustworthy?
  5. Will you be able to handle firing them?

Wasserman and Huntington agree that if someone isn’t qualified or capable of doing the job, then hiring them is a bad idea no matter how much you believe in them (or how badly you know they need the job). Your first responsibility is to ensure that your business is positioned for success, so avoid spending money on people that aren’t going to add enough value to advance the company towards its goals. It will only hurt the relationship further if you have to let them later on.

That said, you may have extremely qualified people in your network or the networks of your leadership team. If you’ve had the opportunity to work with someone and know they are a rock star at what they do and great fit for the culture of the company, it seems silly to hire a stranger from an ad. As you cast a wider net using search firms and job postings, it will get increasingly hard to ensure that the people you hire are great fits.

Herrenkohl’s How to Hire A-Players gives some practical advice for thoughtfully retaining your best employees. These include:

  1. Invest time with your A-players first. These A-players are the solutions to current and future challenges.
    1. Ensure role clarity.
    2. Give plenty of responsibility.
    3. Schedule regular meetings.
  2. Provide your B-players with coaching and accountability.Often, with a little effort, they can move to the A team.
  3. Turn some borderline performers into A-players by scaling down their roles.Recognize when focusing their efforts in areas they have strengths will help them move to the A team.
  4. Replace C-players and below with people from your farm team. After you’ve tried to lead and coach them and you haven’t seen them make the necessary progress, have the courage to move on to give someone else a chance.

The bottom line of this advice is that it is tempting to spend a lot of time on the low performers, but this sometimes is at the expense of your best. Some believe that if they are performing well they need less time, but this is a dangerous assumption. In reality, they need a very different kind of time from you: recognizing, encouraging, thanking, challenging, and exchanging ideas. They should see opportunity to continue to grow and recognize that a runway toward advancement exists in your company. Know what their goals are, how their current role fits, and have a plan to help them get there.

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.


Week 3: Building Social and Financial Capital

One of the great benefits of living and working in one town for most of your adult life is that you have the opportunity to develop a strong social network. I do feel confident in this area, as I have worked hard to develop a reputation where people trust me and my work. I have had the opportunity through several volunteer experiences to make connections with people with significant fundraising and nonprofit experience, so I feel like I have a deep well of expertise that I can call upon. I’ve also worked closely with many business leaders in my roles with local universities, so the range of consultants (and potential volunteers) I can call upon is pretty wide.

One area I have not spent a lot of time yet is developing my network in the human services community currently working on the hunger needs of my city. I’ll definitely need their support and guidance, both to minimize the duplication of efforts and to maximize the impact of the work. It would also be important to ensure that those doing the work now don’t have any impression that I’m looking to compete or “steal business” from them. There is plenty of unmet need and never enough resources. My hope is that the food truck will be seen as additive and a partner in this work.

In terms of financial capital, I’m fortunate that I have a runway before this business can launch since I’m waiting for my father to retire. This time represents my window to get organized and save/raise the necessary funds to start operations. Initial startup expenses are mostly centralized in the truck itself. The goal is to purchase it with cash, to ensure expenses are very low. Since dad will be retired, labor costs are flexible. I do want him to be paid, but he insists that while things get going this is not important. Eventually, he’ll also need the help of a sous chef to minimize the burden of preparation. This will be a great learning opportunity for a culinary student completing a required internship for their degree program. Volunteers can also be helpful with this kind of work.

My intent is not for this to be a full-time endeavor for me or my dad, so the decision whether to leave full-time employment is not the same as it is for many new entrepreneurs. If the response to the food truck is good, it would be more likely that we’d have to hire a second chef before we’d need a large, full-time administrative team. If the idea took off, and we were able to launch in multiple cities that would be a very different kind of organization that would require a lot more attention. This is probably the scale that would be required for me to leave my full-time job to focus on the organization as my primary work.

Week 2: Maximizing Wealth vs. Maintaining Control

Wasserman’s (2012) The Founder’s Dilemmas describe difficult decisions that founders must make that can have a lasting impact on both the founder and their startup. What’s more, most founders often do not recognize the options they might consider or the impact of avoiding tough decisions early in the life of their business.

Wasserman describes the wealth versus control dilemma as “the most common and difficult of them all.” On the surface, they might appear to be complimentary, but in fact they are in constant tension with each other. This counter-intuitive relationship is the result of the need for human, intellectual, and financial resources to get the business off the ground. To land the best talent, ideas, and money it is often essential to offer investors equity. This means that they share ownership, some of the risk, some of the potential reward, and voice in decision-making. The author emphasizes that it is imperative that the founder be conscious of his or her own motivation, allowing decisions to be intentional and consistent with that driving goal.

It will be very interesting to see how this dilemma develops for my own business, as the motivation is neither profitability nor control. Intellectually, for me, starting this organization is about maximizing impact. In my head I feel like if someone else has the time, passion, and energy to devote to the cause I will be happy to yield (or at least share) control. As I really reflect on this honestly, however, I think that when making decisions I would probably lean more toward control because my vision for the organization is fairly limited. I can understand how the push-pull of this dilemma can be challenging for other entrepreneurs as I review the various dynamics involved. Making the choice to limit the scope of the organization is in effect choosing control. If the need is greater and the resources are available for the taking, this choice would be the only reason not to scale up the operation to maximize the impact.

One challenge, that I can imagine being similar for others, is that I imagine this operation as a family effort. There are certainly ways to engage other organizations to maximize donations and volunteers, but doing so would mean that they would dictate some of the terms of use. On the surface, this seems absolutely fine…but the added complexity and unforeseen challenges must be expected and planned for.

An area where I may veer more toward the maximizing wealth orientation is my desire to involve smart people and a willingness to accept outside advice. As someone who has always worked on high performing teams, I feel in no way as the source of all good ideas and decisions. I am happy to delegate and support those who assume responsibility in whatever way they need to perform at their best.

I strongly identified with the desire for slow growth and he feeling that we are well equipped to launch and build without a lot of outside help. My dad is an expert chef and has been operating a mobile catering business for 15 years. This expertise serves as both motivation and a foundation for the success of our project.

Week 8: Self-Managed Teams and the Pursuit of Wow!

The fact that this chapter on self-managed teams wrapped up The Pursuit of Wow! reminds me how much the business world has changed since this book was published over 20 years ago. Since that time, self-managed teams have become the norm in so many workplaces. It is interesting to see Peters discuss them as if they are controversial. What he did well with this closing chapter is the same thing he is known for in all of his writing…pointing out simple truths in a simple way that somehow help his readers wake up and see something new.

Peters points out that nearly all employees are well positioned to accept the task of self-management. He indicates that many managers like to think their contribution to the operation of their unit is irreplaceable. In fact, managing a team isn’t terribly different than the way that most people manage the affairs of their lives. Here are a few examples:

  • Long-term View: Most workers understand thinking long-term, as demonstrated by their willingness to make a 30 year investment in the purchase of a home. Show me a manager taking a 30 year view of their department’s operations.
  • Trade-offs: Every family has to make decisions about complex trade-offs all the time when they make personal choices about where their money should be spent. Do you save money for a vacation or invest in buying a more reliable car? Retirement vs. college savings?
  • Eliminate Job Descriptions: Detailed, written guidance does not exist for most of what we encounter every day. We solve problems, make progress, work together, and move forward toward our goals.
  • Manage a Budget: Living within a budget is understood by most responsible adults. Don’t over-complicate this function in a team.
  • Projects: Life is not a series of repetitive tasks, it is closer to a set of projects that we complete concurrently.

And yet, 20+ years later self-managed teams are still a topic of popular business conversation. Take the 2014 article in Inc. magazine titled “Why Self-Managed Teams are the Future of Business” Chuck Blakeman makes a similar case to the one Peters made in 1994. He points to the following lessons:

  • Ownership: The organization that inspires a sense of ownership by its employees has achieved something great where motivation will likely be maximized.
  • Empowerment: When employees are empowered to make decisions, companies tend to grow faster, have less turnover and are more profitable.
  • Simple, Not Easy: Changing from a “boss knows best” model to an “employees know best” model is hard for everyone. We’ve been doing it the other way for a long time.

The case that is being made is essentially the same…giving a group of people clear goals and supporting them as they determine the best way to get there usually results in a better product or service than if the manager tried to drive every detail of the process themselves. Having diverse teams positions them for success, as they can rely on each other to help solve the complex problems they face. Peters would argue that they already have the skills they need to make self-management work.

What do you think? Are you ready to yield your control as manager and trust the collective decision-making of a self-managed team?



Blakeman, C. (2014, November 25). Why self-managed teams are the future of business. Inc. Retreived online at http://www.inc.com/chuck-blakeman/why-self-managed-teams-are-the-future-of-business.html.

Week 7: Media as Customer and The Pursuit of Wow!

What really stood out to me in this week’s chapters was the recommendations Tom Peters makes about interacting with the media. He shares his lessons from years of ups, downs, quotes and misquotes by the media. He says, “The press has made me. And made me mad as hell.”

  • Tell the whole truth. Most people don’t lie, but too few tell the whole truth. They are reporters, so they will probably learn the rest of the story eventually. Peters suggests acknowledging the good, bad and ugly right up front.
  • It is okay (and preferred) to change your position/story if new information comes to light. When you dig your heels in based on old information it makes it look like you are being untruthful by sticking to your guns.
  • Get over quotes taken out of context. It is going to happen and there isn’t much you can do about it.
  • Return phone calls (and emails) promptly.They are always on a deadline. It is the nature of their business.
  • Treating the media like an ally will aid your success in a crowded, competitive market.
  • Take a long-term view. You want reporters to come back to you again and again, so maintaining a strong relationship will help position you for long-term success.
  • There are jerks in the media, just like there are jerks in every kind of business out there. Don’t assume that one jerk speaks for all media or let one bad experience sour you from actively engaging with reporters.
  • “Don’t take your press releases seriously. The press doesn’t.”
  • Media are looking for a sound bite. Give it to them.
  • Don’t forget about radio. It is still possible to discuss a story for 10 or 15 minutes on radio and a lot of people are still listening. [I’ll throw in podcasts too…since this book is 20+ years old.]

In complement to this, here are a few more tips I found in my research:

Stratcommunications.com (2016) reinforces the importance of developing relationships before you “need” the media. They also wisely suggest being a broken record to ensure your key messages are heard loud and clear. They point out that live interviews are great for maintaining control of messaging. They also suggest making the reporter’s job as easy as possible by providing background information and explanations if your message is complex.

Brad Phillips for Mr. Media Training recommends never going “off the record.” There is a lot of ambiguity as to what “off the record” means, so it will be hard to ensure that you and the reporter are agreeing to the same terms. He also says that you should never say “no comment” because the public hears that as “I’m guilty.” Instead, Phillips suggests making a comment that doesn’t really comment on that issue. Phillips points out that when you are being interviewed you can limit the duration of the interview if you are worried about a fishing expedition. His orientation is definitely more adversarial in orientation that Tom Peters.

My experiences working with the media have all been very positive. I have certainly exercised understanding with regard to their deadlines and tried to respond quickly when asked for an interview or comment. In all, I think my organizations have all benefited from media relations that came from an orientation of appreciation for the exposure.



Phillips, B. (2011, May 11). Eight ground rules when working with reporters. Retrieved online at http://www.mrmediatraining.com/2011/05/12/8-ground-rules-when-working-with-reporters/

Stratcommunications.com (2016). 7 tips for working with the media. Retrieved online at http://blog.stratcommunications.com/7-tips-for-working-with-the-media/.


Make it Better: Product or Service Review

I would appreciate your feedback on the draft of my product/service review. I chose MBA@UNC, the online MBA program offered by UNC Kenan-Flagler Business School. This is the “sister” program to the Master of Accounting program that I work with. I’ve worked with a lot of MBA programs over the 15 years I’ve been in graduate education, so I thought taking a closer look at this program would be interested. Thank in advance for your feedback!