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Monday, April 6, 2009

Organization, part #1: Does your team match the job at hand?

This piece is the first in a series of posts aimed at bringing the light of the market to my ongoing Fulbright research with Thanos Papadimitriou on entrepreneurial decision making.

One of the four core processes that every startup undertakes, we think of organization as the process of sourcing, securing, allocating, assembling, managing, and scaling human and material Resources into business capabilities.

Smart entrepreneur's are like accountants, they match the duration of their assets and liabilities, both financial and human.

No one can do it alone. Sooner or later entrepreneurs have to enlist additional team members to execute existing tasks so that they can focus on new, higher value initiatives. Four things to think about when you are building your team are as follows:

1. Fill in the gaps. A complementary partner is the most important asset available to an entrepreneur. A partner is an additional set of eyes, a sounding board, a reality check-the person whom you trust to tell you when you are wrong. Finding the right candidates begins with honest self-examination. Compare your capabilities to those needed to succeed to find the gaps. Entrepreneurs would be wise to apply the same analysis to every addition they make to the team.
2. Get started with what you have, but upgrade relentlessly. Most entrepreneurs lack the resources or track record needed to attract qualified candidates, and thus rarely have the pick of the litter when hiring. That's ok. Part of being an entrepreneur is learning to make it work with what you have. That said, remember that difference between "A" and "B" players is not one notch, it's 100x fold. Covering an empty position for a few weeks sounds horrendous but keeping an inept person in a critical position is crippling. The ambiguity and lag time makes it all the more important to act decisively. Immediately saddling new team members with actionable and measurable tasks can help to uncover subpar hires sooner.
3. Plan for roles to change. This means making it clear to early hires they are filling temporary needs. Make short (six month) commitments, which include flexibility for role changes as needed.
4. Hire for the job at hand. Many startups mistakenly hire a professional VP of Sales before finishing the product, much less validating demand for it. Not only is it expensive to have a VP of Sales sitting around before there are customers to sell to (you, the founder, are in charge of evangelical sales, remember?), anyone worth their salt wouldn't come to work in your basement anyway. It's just not worth their time yet.

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