In the last post, we discussed the fourth step to start a startup: Adhering to legal obligations and choosing the right location for your business. We have learned how important it is for a business to understand fully the legal obligations and choose the best location that is favorable for the success of a business. On the same note, let us now discuss the next step to start a business, which is Team Building.
Every startup/ business is backed by a robust team of people. The more versatile that team, the better chances they have of succeeding. Working in a team not only helps us perform better but also keeps us motivated and charged up in order to contribute to the positive results. No successful product development can take place without the collaborative effort of a well-established team at the workplace. A good team enables an open communication which leads to a good relationship among the members, and this relationship and encouragement ensure a good quality of results.
According to a report published by CB Insights analysis, lack of a proper team accounts for 23% of the failure of a startup. A diverse team with different skill sets is cited to be critical to the success of a startup. A team of skilled workers is needed to build, promote and sustain a startup. Every entrepreneur needs people to make up for their shortcomings and even professionals outside the immediate team.
Moreover, startup teams must be able to change products, adjust to different compensation plans, rebrand business, adopt new marketing approach, or even start all over again depending on what the situation demands from them. It is all about recovering from blows. Teams that are able to recover together possess the unique trait of harmoniously working together through tough times. Let us take a look at some effective strategies that help entrepreneurs in team building for the success of their business/ startup.
Initially Don’t Look for Your Replacement
The first step or you can say the golden rule of team building process for a startup is to never give comfort to yourself by hiring a person with same skills which you possess. Hiring someone with the same caliber as yours results in conflicts in major decisions in a startup and sometimes leads to the wastage of limited money. As an owner, you might even run the risk of losing your power owing to the expertise of someone you have hired to your team. It is important to remember that one must not consider hiring someone with the same professional background since a startup needs expertise in multiple domains for overall success. A company operates at different levels and require a team of people with different skill sets to run efficiently.
As an entrepreneur and owner of your business, you need to be meticulous in building a robust team for your company. Some of the best leaders recommend hiring from outside the industry because an outsider can offer a fresh perspective and most of the time re-energizes the company. Steve Jobs once quoted that part of the success of Macintosh is accredited to people coming from diverse backgrounds like musicians, poets, artists, zoologists and historians who also happen to be one of the best computer scientists the world has ever known.
A co-founder is the 2nd most important tie/ link in your business after you; so it’s very important to give proper emphasis over the co-founder(s) during the team building process. In order for an entrepreneur to go ahead and far and attain the desired results with respect to their business, there need to be great co-founders. You cannot be the sole authority to make all the important decisions yourself as in the end, you are an individual with your own set of weaknesses. Startups with co-founders have a higher success rate than companies with a single founder. Having co-founder results in partnership and more accountability, that helps in avoiding some of the pitfalls of a single charismatic leader.
CEO of a startup turn-around shop Tech-Rx, Steve Hogan states that companies that are founded by a single person, without partners are most likely to fail. The presence of a co-founder helps in avoiding issues of disharmony, poor marketing, and wrong team. As it is a start-up, you can certainly not rely entirely on your decision-making potential as your single decision can either make or break your deals. So it’s always good to have someone reliable besides you who can be a mental and emotional support to you.
Additionally, a co-founder may have extra skill sets that you might be lacking, bringing in cohesive results as a team. You will have someone to distribute your stress with. If you are unavailable in a particular situation, your co-founder can play your part and that’s how the work won’t get hampered. Not having a co-founder can be a great problem. Paul English, an angel investor and also the co-founder of kayak.com quoted that he once made 12 investments over a span of 2 years, none of them was with a solo entrepreneur. He further added that diverse skills set are important for teams to flourish and so is a positive dynamics between team members.
A Harvard Report has highlighted that startups with at least one female co-founder performed 63% better than entire male founding teams during initial rounds of funding. In simple terms, females prove to be great technological entrepreneurs and deserve to be funded. Also, one needs to keep in mind the factors that would entice a potential co-founder to join hands with you like giving him a certain percentage of shares or profits. A co-founder brings with him certain skill sets in his chosen field reducing the number of issues a single founded faces considerably.
Although we have mentioned above the merits of having a co-founder in a start-up, this aspect does not apply to all companies. Many eminent single founders like Ratan Tata, Henry Ford, Dhirubai Ambani and Warren Buffet have reached the zenith of success all by their own efforts. We suggest that as long as the initial funding for the company is good, the need for a co-founder can be bypassed. In cases where a company is facing a lack of funding issues, one can opt for roping in a co-founder. A report from Crunch Base has emphasized on the fact that finding a co-founder is not a mandate, although it reduces the amount of stress that a founder faces single-handedly.
Hire People Talented Than You
Hiring more talented people than yourself in team results in knowledge sharing and better productivity and hence the most important aspect of team building process. Founder of Apple, Steve Jobs has mentioned that the recruitment policy at his company has been focused on hiring the best talent in the world that has resulted in success. He has further added that hiring less talented people in a team results in work being done as per the creativity and mindset of the leader, giving less scope of inputs for the team member. On the other hand, if more talented people are included in the team, they will have the potential to guide the owner and would contribute invaluable inputs for the betterment of the company. Always remember that a match can be won by a single player but a tournament is won by a team. So in order to win the tournament of your goals you have to hire more talented people for your team.
Great things in business are never done by one person. They’re done by a team of people.
– Steve Jobs
A successful entrepreneur is one who hires brighter people than himself and let them handle their respective domains by getting out of their way and checking their results. The key is to adopt smart hiring tactics that are a reflection of a startup’s cultural values to bring the right people on board. Team spirit comes from the top.
Facebook is one such example that understands the value of right people. They hire engineers for their skills and once they are recruited, they are asked to ‘look around, figure out what the problems or opportunities are, and help bridge them’, instead of instructing them about their roles and responsibilities. Facebook motivates its employees to form their own teams and choose projects that they feel they can give complete justice to with high passion. Because all great leaders believe that if they do what they are passionate about, they can deliver better outcomes and hence result in better productivity. Doing this is beneficial for the employees too as it helps them in career growth based on competence and not on credentials.
Fire Unprofessional Employee Quickly from Team
It is the most important rule of team building. Jim Collins, a famous American business consultant once quoted, ‘You are supposed to get the right people on the bus and the wrong people off the bus’. Unprofessional employees create an air of toxic behavior at the workplace, the effect of which is four to seven times greater than the effect of a positive tie. A survey conducted of 135 people in HR department of a company has suggested that 10% of the employees with the most de-energizing interactions contributed to a score that was 30% less than rest of their colleagues.
As a business owner of a startup, it is imperative for you to find out the noxious employees of your company. As a leader, you have to deal with such employees and kick them out as soon as possible in order to prevent the productivity of your work and company being affected. A report from Career Builder suggests that of the 2,700 employees surveyed, 41% estimated that a bad hired employee could cost a company $25,000 and that amount can go up to $5,300 to the bottom line.
For a bright future of your company, you need bright people around you. Employees play an important role in creating a zealous atmosphere at the workplace. So, always prefer having passionate, energetic and dedicated employees in your company. You cannot afford to have lame employees in your company. Enthusiastic and passionate employees should be respected and retained in the company. On the other hand, the lethargic lot should be asked to leave.
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