According to various studies anywhere from 25% to as many as 55% of startups fail due to poor team management. The first step of good management is selecting the right people for the team. This task often keeps first-time founders and managers awake. Their main goal up until now has been to create a unique product that will change the world, but they need good people to do that.
Even as an HR expert, I admit to having made mistakes before. And, we all know how much they can cost. Having advised many startups, I also see the mistakes young founders and managers make most often. Here are some of the top ones that come to mind:
#1 Exploit your network and hire your clones
At the beginning of running a company, startup founders usually look for employees in their network, among friends. After all, Tom, who I did a project with in college, was great at drawing, so why not get him to design our UI? And Kate, who I worked with in a previous company, got along great, and she was always “good with people,” so maybe she could be our project manager?
On the one hand, it’s understandable that—as a leader—you want to work with people similar to you. It’s much easier. It’s more comfortable when you think about the many challenges you need to face when you are at an intensive stage of growth. At HR Hints we see that on a daily basis, as we are usually the first external company to help build a team. So this is the moment when a founder has built as much as they can with their initial network. We come in, and what do we see? A team of founders’ clones. They all watch the same TV series, like the same types of pizza and go to the same music festivals.
These clones are having great fun, and they feel comfortable working together. But are they able to see problems where founders don’t if they have the same point of view and the same background? Probably not. And it can stop your business’ success and your company’s growth.
So you should build a diverse team not only for yourself but for your customers.
#2 Succumbing to the magic of brands and hiring “stars,” hoping it will do the job
When founders start operating with larger budgets, they also start looking for real “stars” to join their team, who they believe will take the company to a whole other level. Isn’t it cool when a candidate has “ex-Google” on their LinkedIn profile? Or built a product that we use ourselves? That’s how the power of brands works. Unfortunately, it doesn’t mean that a person who has worked for a famous brand is the best candidate for us. Even if they did a good job at Google, they wouldn’t necessarily work well for us. What’s more, a great deal of a professional’s success depends on the context, conditions, team and organizational culture. For example, if we operate in a team that doesn’t give up we are likely to take this approach for granted.
It is also a mistake to assume that hiring a “star” will take care of everything. Even the biggest star, without proper implementation and team fit, will just be floating alone in space.
What’s more, someone is often a “star” in a specific area, while in a startup you need to be well rounded and wear many hats. Highly specialized people have a problem with this, even if they are really good at what they do. The same happens with very experienced managers—suddenly having to do things with their own hands again.
#3 Lack of setting, communicating and enforcing rules
Every founder imagines that his startup will be exactly what they dreamed of. People will have the same approach to work, tasks, and responsibilities. They will have the same way of being late or arriving on time for meetings. They will know exactly how to give feedback and even how to communicate on the company’s Slack channel.
Unfortunately, all of the above is about organizational culture, the principles by which the company is directed. And it doesn’t get set up by itself. The role of a founder is to set, communicate and enforce the principles they want employees to follow.
Communicating these principles isn’t about writing them into a corporate presentation or even painting inspirational slogans on the walls. It’s mostly about leading by example, enforcing certain behaviors, and putting boundaries where they need to be. If you want people in your company not to shout at each other, then you should never tolerate it among the team, not to mention that you yourself shouldn’t shout.
Consider these mistakes as cautionary tales to avoid if you’re a startup or scaling business. And even if you’re well established, some of these points may resonate with you. If so, consider concrete ways you can shift your attitude and practices to create a more well-rounded, holistic, and strong organization.
Written by Roza Szafranek, Founder and CEO of HR Hints.
Have you read?
Best CEOs In The World, 2022.
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World’s Richest People (Top Billionaires, 2022).
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