I hear a lot of complaints from founders as they are trying to build out their leadership teams.
“I can’t find good people.”
“I have to micromanage everyone.”
“No one takes ownership.”
The response that I always give is to ask a question—
“What if the problem is YOU?”
The Three Mistakes
I’ve found that the vast majority of the time, when a founder tells me they have a problem with their team, or with a particular person, it’s not because of the person, but, at least in part, because the founder has made one or more of the following three mistakes.
Firing Too Slowly
At the beginning, founders tend to hire people they know who are excited about being with a growing organization. They tend to be relatively good at a lot of things, and passionate about startups.
But the jack of all trades that is helpful at $5 million or even $10 million of revenue is often a disaster at $50 or $100 million.
That pull yourself up by your bootstraps mentality that is so helpful at the beginning no longer works at a bigger organization. What you now need is clear ownership and systems and processes.
My friend Ken Goulet, an advisor to several health care startups, calls this the “fire your friends” stage of leadership.
Anytime you hire someone for your leadership team, you need to hire for the organization you are wanting to become. Not the organization you currently are.
One of my clients was struggling with his CFO. He decided to make a big leap. To hire someone who had CFO experience at a company TEN times the size of his.
At the time, it was a huge investment. But within six months he saw all the ways that his new CFO could contribute (and he let her run with them—see the third mistake below).
Today, that CFO will likely become president as my client spends more of his time thinking about bigger picture issues around vision and growth.
One of the most difficult things for a founder to hear is that they have, most likely unconsciously, trained their team to behave exactly as they currently do.
The first few times a founder hires people they have been doing things a particular way, their way, and they want to hire a person who will continue to do it their way.
They will monitor the person and make sure that they do it their way. They will correct them if the new leader does not do it their way.
In other words, they are training their people to think like them and check with them if there is any doubt.
They are training them to be micromanaged.
Most founders have never been a CFO, or a head of sales, or a head of product at a larger organization.
They only know what they have been able to cobble together in startup mode.
If you want to grow, though, continuing to do more of the same thing (just with more people) is a disaster.
A former client of mine got stuck on this. He could never find a COO who would run things exactly the way he would. He admitted this to me.
“The one thing getting in the way of my being a bigger company is me.”
Unfortunately, he is still saying this. The progress he has made on this front is minimal, because he continues to think that new people have to think like him.
You have to hire people better than you and let them run.
Control Versus Growth
Once you have a solid business, this is the most important question—
Do you want control? Or do you want growth?
This question will show up in different versions throughout the startup journey. With your team, with your investors, with an exit partner.
A founder who wants growth will hire good people (better than the founder!) and point them in a direction. Give them no more than three priorities, which will tend to conflict. For example—
- Profitable delivery model
- Customer delight
- Rapid growth
Hire excellent functional leads, give them simple priorities, and let them run.
You’ll be amazed at what happens when you do this. The tension between the priorities will create conflict, and conversation. Good leaders will thrive in this conversation.
The results will not only be different than the way you would have done it, but it will be better.
I was working as an advisor to a co-founder who took over when the founder died.
The advisory team provided her lots of new ideas on how to grow the business, and its impact, in a way that honored the founder.
But the co-founder was comfortable with the way things were. She said she wanted to grow, but she wasn’t willing to try anything new.
That organization is slowly dying today.
Pruning is necessary from time to time. But only to make room for new growth.
Does that resonate?
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