'Team' will help entrepreneurs develop the 'people' sections of their business plan. It will explore some of the challenges, techniques and tools for building, growing and motivating the team, with anecdotes of what has and hasn’t worked when it comes to people in start-ups.
The most important part of a business is the people, working as a team.A crap manager can screw up a great product (eg. when Michael Dell stepped down as CEO handing over to his COO, only to come back 3 yrs later, because his COO was the wrong man for the job)Conversely, a great manager which a great business plan, can make a crap product fly off the shelves. Look at Macdonalds.
Why are these important for the team?Because you wouldn’t hire someone who wasn’t motivated to do the job your hiring them to do, or qualified to do it, would you?So, you need to make sure you understand your own motivations and capabilities.Comfort zoneWhat are the gaps – and we’ll come back to this – but a serious question you should be asking yourself now is can I do this alone?There are pros & cons of starting on your own vs. starting as a team, but on balance if you can find a business partner the risks of failure are reduced significantly: - double the network - double the skills - double the emotional strength - double the FFF potentialBUT – have a s/h agreement!!!Where do you find a business partner….
1st mile, 2nd mile, 3rd mile.
So, you’ve made your choices, you’ve developed your business plan – ie. designed your business, you must now build the team.But what team do you need?Do you need loads of worker ants?Do you need lots of chiefs?Who does the work and who sets the direction?A real test of good leadership is how it deals with the unexpected.This is where it can go horribly wrong – look at Tony Hayward at BP, or the boards of the big banks in few years back.I’m now going to explain to you one of the most important things I think you should understand – and remember this for the rest of your business lives.It’s the role of the Director.
Another way of looking at the Team is the functions, or level of function – and responsibility – you need in the business.Now this is functions not necessarily people or roles. It’s perfectly feasible for one person to operate at the ‘doing’ level one day and the ‘strategic’ level the next; but it’s essential to understand the difference.[Rex and the tie example]You need people good at doing the different levels of work…
You could also view the business the other way up – i.e. the strategy and the management are supporting the production – after all, that’s where the value is created.So, that’s about levels of responsibility.I now want to talk about areas of responsibility.
Mike Southon’s four ‘conerstones’ from the Beermat Entrepreneur.What you don’t want to do is try to build the people side of a company that just looks like it will work. It needs to really work and it needs to be sustainable – i.e. you must be able to afford it.Eg. It is common to have finance managed on a p/t basis from startup even through until quite late in the game. It’s about understanding your real business needs and finding the right solutions to that.A common way to think of your role here as a director, is that it is your job to ‘Marshal resources’ to deliver your objectives. There is no single right answer for what function or levels of resource you have – whether to outsource or keep in house, whether to have f/t or p/t etc.But think of what it is that’s going to make your business special. If the technical know-how is important then you probably want to employ that resource rather than rent it.If your ‘delivery’ function is variable – eg. Across seasons or projects – you might want to make sure you can flex your costs correspondingly which suggests contractors or freelance developers, whatever it might be.
A team needs to work – whether it is the leadership team or a functional team.It’s easy to hire PLUsRef: Great to good – research suggests the really great businesses get the right people on the bus (and the wrong people OFF the bus) and TH|EN decide where to drive it.
So, hopefully it’s now clear that people are the most important part of the business, and it’s not always straight forward.The comfort zone of the engineerExample of MM hiring sales peopleExample of MM’s hiring failures- whenever we had to negotiate on salary, it didn’t work out.Startups – the desire to work for you is more important than the money
[stuff to consider when writing your business plan
Other tools to measure your team.Don’t run your business by these – they are useful analyses and spot checks to find the gaps - or to explain problems you might be experiencing. You must invest in and develop your own ability to judge the right hire.The important thing is to ensure you have balance in your team so that you cover all the bases.The 4 D’s: Diversity, leads to good Debate, which leads to good Decisions and hence good Direction.
The Virgin example
Vfb2012 growing the team nick sturge setsq
Growing the Skill Set in an Early- Stage Company Nick Sturge Centre Director SETsquared Business AccelerationThe Safest Place to Grow your Business
If everyone is moving forward together, then success takes care of itself Henry FordThe Safest Place to Grow your Business
Agenda• Intro• The Beginning - Choices• The Middle - Building, motivating, communicating• The End - Succession, exits, firingThe Safest Place to Grow your Business
The Motion Media Story The Official List & the crash 300 30 250 25 Turnover (£m) Orange,Value (£m) 200 BT, 20 150 Dot com 15 100 IPO 10 50 Headcount 9/11 5 0 0 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05The Safest Place to Grow your Business
The Beginning - choices• Understand yourself … – Why? Aspirations. Abilities / Weaknesses. Resources• Type of business – Lifestyle or Growth?• On your own? – Pros & cons of starting on your own – Shareholder agreement! – How to find a partner?The Safest Place to Grow your Business
It’s a (relay) race not a sprint…. Company Value (££) Pre- Pre- Incubation 1st mile incubation 2nd mile incubation 3rd mile Grow-on Time The Safest Place to Grow your Business
The Middle Any one can hold the helm when the sea is calm. Publilius SyrusThe Safest Place to Grow your Business
DOOM• The four hats: – Director – Owner (shareholder) – Operator (workforce) – ManagerThe Safest Place to Grow your Business
DOOM Shareholders (O) Investors (shareholders) Director + Owner + Operator + Manager The Board (D) = The Founder EMT (M) Part owner + Director + Manager + Operator = The Founder? Workforce (O)The Safest Place to Grow your Business
Building the Team Strategy Tactics DeliveryThe Safest Place to Grow your Business
Building the Team Delivery Tactics StrategyThe Safest Place to Grow your Business
Functions Sales Technical Support Delivery FinanceThe Safest Place to Grow your Business
Team Dynamics - balance Producer IntegratorEntrepreneur AdministratorThe Safest Place to Grow your Business
Recruitment• The challenge of a Techie founder hiring ….• Be wary of hiring friends & family• Better to work with a gap than hire badly• Which are the key hires, and which aren’t• Motivation of candidates• Importance of cultural fit• Technical ability vs. aptitude• Pros & cons of multi-skillingThe Safest Place to Grow your Business
Recruitment – where from• Networking• Web – eg. GumTree• Agencies• Research – targetted “poaching”• Universities - eg. www.bris.ac.uk/CAS – Grads – departments directly – Interns – KTPs – eg. www.bris.ac.uk/RED – u/grad projects – departments directly• Employment Contracts – Incoming employees – restrictive covenants – For your employeesThe Safest Place to Grow your Business
Business Plan Considerations• If you are not the “2nd mile bod” – be honest – Identify the succession plan• Identify the gaps• Identify the key strengths – the ability to deal with the unforeseen• Be realistic about costs and time-to-recruitThe Safest Place to Grow your Business
Other tools• Belbin – www.belbin.com - £30 – Team roles • eg. ‘Plant’, ‘Co-ordinator’, ‘Completer Finisher’ etc. – Work preferences – 360 degree• Myers-Briggs - $29 – psychological preferences of how you perceive the world and make decisions• TMS Wheel – Explorers, Organisers, Advisers, ControllersThe Safest Place to Grow your Business
Motivation Leadership: The art of getting someone else to do something you want • Communication done because he wants to do it. Dwight D. Eisenhower • Alignment of interests • Pay vs. rewards vs. risk • Praise & acknowledgement • Promotion – pros & consThe Safest Place to Grow your Business
The End• Planning for exit• Succession planning• Firing – Discipline – Performance – RedundancyThe Safest Place to Grow your Business
Now for the real story….The Safest Place to Grow your Business