Entrepreneurs focus on building right teams

Success in business hinges on understanding yourself, understanding your team, and building effective players based on roles. FILE 

By SCOTT BELLOWS
 

 

In Summary

• Startup businesses that do not have dynamic players fail at a dramatically higher rate.

The road to owning and managing your own business often meets with potholes and bumps mixed in some measure with glories and success. The business world commonly knows that many startups fail. We shall explore this issue and solutions in coming Fridays.

Let us focus, for now, specifically on businesses that have received investments from outsiders, such as venture capital. We know that 25 per cent of new businesses that receive these funds actually collapse, fail, and enter receivership. 

Then, Dr Ghosh at Harvard University found that a further 75 per cent globally of new businesses funded by venture capitalists actually fail to deliver on their projected returns. The statistics offer a staggering view of the risks of starting new businesses.

Turning our attention to entrepreneurs, it takes a very confident type of individual to embark into the risky world of business startups. 

A new entrepreneur boldly steps out and forges the foundations of a new company. Once profits start to flow in, the entrepreneur feels excited and often believes that only the sky can contain him or her. 

Entrepreneurs often get shocked that one of the first requirements that a new investor or, specifically, a venture capitalist, requires when investing into their business includes the condition that he step down from the CEO position.

 

Venture capitalists in Kenya and around the world gain fame for replacing visionary startup CEOs with more operational-type ones. Why would investors and venture capitalists do such a thing? Do they know something we do not?

Yes. Venture capitalists know that startup CEOs often exhibit great vision and passion, but do not realise that they lack certain skills. The same over-confidence and self-drive that makes a startup CEO an initial success often makes him or her blind to the realities in the business and in themselves.

Serial entrepreneur and Stanford professor Steve Blank consistently teaches that startup entrepreneurs who do not form a team fail at a dramatically higher rate. Kenyans often become obsessed with going it alone because of fear over team members stealing their business idea. 

But the critical piece in a startup revolves around the implementation of the idea, not the idea itself.  Since showing the startup CEO that his or her skills need enhancement, they often resist. 

Let us examine the best solution to retain your leadership and keep growing: create a dynamic team.

Conventional business wisdom dictates that all employees must fully possess well rounded skills for all responsibilities that an employee could fill on a team. 

Remember from earlier weeks in the Business Daily, there is a difference between what science knows and what business does. The faster you realise that such all-round role functions do not exist in any human being, the faster you build a better team and grow your business faster.

Dr Belbin in the UK pioneered the concept of team roles in the 1980s. Now modifying roles for the Kenyan context, please look through the following 10 team roles.  Remember that no one can perform all of them. 

Think carefully about your top three that you easily and joyfully provide to your team. Then, identify the four team roles that you may perform moderately well, but you tolerate the roles while neither loving nor hating them.

Finally, which three team roles do you perform badly and you absolutely despise?  Make a list.

Looking through the above team roles and deciding on what you enjoy and how you perform, you build your team to complement your skill set and those of your existing executives. Take your bottom three team roles for example.

Perhaps you love networking by meeting new people, but you fail to finalise deals.  That means you struggle at the “closer” role and urgently need to hire someone with skills and passion for closing deals. 

On the other hand, if you and your CFO already excel as “perfectionists”, bring onboard someone who is both a “pusher” and a “coordinator” to force tasks to get done in your office. 

As a leader and entrepreneur, you must realise that hiring based on employees’ team roles equals the importance of hiring based on traditional skill sets like accounting, law, sales, and manager.

Do not miss opportunities for great teams. Every member could have value in your organisation if you accentuate their job tasks to meet with their team role skills.

Ask all your employees to assess their own team roles. Even someone like the famous Mr Monk, on the hit television show formerly on Kenyan television, adds value to a team.

If you remember the show, you know that Mr Monk irritated many colleagues as an obsessive compulsive perfectionist.  However, he added tremendous value to his team because he possessed skills that others did not. 

So take a moment now and think about the teams in your office. Do you have too many “thinkers” but not enough “get it done guys and gals”?  Do you need to make adjustments to your teams?

Startup entrepreneurs have an even harder task. Companies in the early stages of growth often only retain the resources to bring onboard one or two other executives. 

It makes hiring based on team roles even more crucial for success.  Investors and venture capitalists know this and wish that you did too. As you assess your team, the following allowable weaknesses accompany each type of team role.

As the startup entrepreneur, fill in your team based on the above strengths per role with knowledge of the downsides of each of the below weaknesses:


Avoid business startup failure. 

Success in business hinges on understanding yourself, understanding your team, and building effective teams based on roles.  Which of the roles do you need on your team? 

Where do you have too many team members overlapping similar categories?  If you run a larger company, does each of your department group possess each roles as well as the executive leadership team? 

Prof Scott Serves as the Director of the New Economy Venture Accelerator at USIU’s Chandaria School of Business and Colorado State University, www.usiu.ac.ke/gsse, and may be reached on:  bscott@usiu.ac.ke