Building an Executive Team from Scratch in a Growing Startup
Your company cannot begin to grow unless you have built a team.
It doesn’t matter how strong an idea you have, how committed you are, or how many hours you are putting in. It really doesn’t:
Because a startup cannot grow over the founder’s shoulders alone.
Because eventually, the fate of every startup (hoping to turn into a growth company) rests on the shoulders of the team you have built.
Build a team of people who have the required skill set, who can deliver what you are looking for, and who are more experienced than you who can empower you. As a founder you must forget the idea of wading your way through the growth landscape on your own and learning along the way.
Generational Gap and the Myth of Team Learning
Startups often fall into the trap of empowered learning i.e. believing that they (the founders or the original team) can outgrow themselves at every stage of the growth phase. As a consequence, they hire people who they believe will learn and be trained to do a great job tomorrow. Hence, they waste energy and effort into creating a resource.
Empowered learning is a trap, primarily because the task of a growth company is to aggressively overtake market opportunities, and in the process scale its management and systems, restructure its organizational model, and re-establish a new company culture.
Plus, all that you are hoping to learn on your own (mostly hoping to avoid delegating responsibilities and/or leadership to a better person), is already available in the form of hard-learned wisdom of experienced people, and mentors. In the world of growth companies, you do not get a generational gap when it comes to mentoring and leading startups into the growth phase.
Hence, my first advice: Avoid wasting your time, efforts, and finances, on your amazing idea — on your own, or with the aid of a lousy team.
Build a team of executives, from scratch. By doing this, you can dramatically reduce your time to arrival at your expected destination.
This post is about aiding you build from scratch a team of executives capable of handling the complex territory into which your growth company is moving into, or you want to move into. Here’s a 5-tier plan for putting together your executive team:
- Figure out roles
- Measure performance / quality of team
- Identify gaps
- Debate the right structure
Let’s get started shall we?
Figuring Out Roles and Positions
When it comes time to hire an executive team, there are certain roles that you have to find the right people. Here are three prime roles you should be scouting:
Chief Executive Officer (CEO) — The two facts of the matter are: that the CEO is the boss of everyone and is responsible for everything, and that Founders cannot always be the CEO as the startup moves into the growth phase.
If you’re mired in the day-to-day details of the business and can’t yourself out, then you know you need a professional CEO. A CEO thinks about where the organization is going, where it has to go, and hence the people and processes that are needed to get it there while wading through the current market.
Chief Financial Officer (CFO) — CFO is the guy that handles the money. She/he creates your budgets and develops financing strategies so you can stop moping about not getting the latest upgrade on your servers. The CFO is that bad guy busy figuring out the most profitable products, business lines, and target audience to get that server upgrade next year. Avoid wasting your money, try moping, and hire the right CFO.
Chief Marketing Officer (CMO) — If you haven’t noticed yet, many startup battles are battle of marketing. As a result, many startup strategies are hinging on their marketing strategies. Hence, if your business’s success depends primarily on marketing, then you need to hire a CMO — the guy who owns the marketing strategy (and at times the sales strategy), and overlooks its implementation.
The Required Skill-sets
One of the biggest mistakes startup founders make is that they assume that a title comes with self-explanatory job descriptions. You might think that it would be pretty self-explanatory that a Chief Marketing Officer should be a person would be someone with strong marketing skills. The job description varies from industry to industry and business to business e.g. B2C vs. B2B, marketing vehicles, etc.
It is your job to make sure that you are hiring someone who has (first and foremost) experience in successfully scaling up a business in your category (budget, tactics, etc.), and secondly has a deep knowledge of your specific industry.
Past Startup Experience
Know your budget, and hire accordingly. An experienced CMO who has had experience in scaling/leading a company with a $2 billion budget is highly unlikely to be able to lead a start-up with a budget $10 million.
A person involved with building big brands may not see organic and guerilla tactics (take viral as an example), and various low-budget engagement marketing opportunities (e.g. SEO, social media, responsiveness) in as bright a light as the SME niche might be seeing. She/he is also highly unlikely to make them as a major part of their marketing strategy.
You should be looking for someone who has demonstrated past success in leading early-stage businesses, operated a budget “on fumes”, and lead it from an “acorn into an oak”.
A Shared Vision
You are hiring someone to aid your startup achieve its goals founded on a vision for your business. You may be grateful to them for expanding that vision, but not changing it or creating frictions as your startup starts to scale. The growth phase is known to be tumultuous and the last thing you want on your plate are executives bent on leading the company in a completely different direction.
Hence, an equally important trait you should be looking for is that each member of your team shares a consistent vision on exactly what you are building. This ranges from the target market, and target audience, to the market dynamics you are hoping to engender through your startup.
Personality Fit With Team
Accept it, deny it, hide it, or try to make it as politically correct as we may, the truth of the matter is that startups are a 24/7 job.
So, you are going to be spending a lot of time with the team you have hired. This makes it critical that you find a candidate who has a good personality fit between the team. You seriously don’t want someone who gets on your nerves late into the night, or worse someone with whom nobody wants to work with.
You’re trying to win a startup race. You seriously don’t have time to work around this issue.
Surround Yourself with Mentors
Surround yourself with individuals who are much more experienced than yourself. It is important that you hire people who would empower you and the company to dramatically grow and succeed.
Here’s the deal: identify the people which you believe have (and can give you) what you need. Reach out to them, or gain an introduction and invite them to coffee or a lunch. On the occasion, briefly explain to them what you are doing, and ask them relevant questions. Once the conversation is over, ask them for a another follow-up meeting after 2-3 months.
Follow up, and you will automatically fall in the select few who have ever done that, and as a result would have shown them that you are interested in the matter.
Conclusion — The Importance Of Quickly Letting People Go
I’ve already discussed the importance of employing topgrading as an essential hiring device for the executives http://michaelzammuto.com/?p=101, but once again, nothing is more detrimental to the cohesion and optimal working go your team if people aren’t working at top performance.
Hence, it is important for you to keep the strategic vision of the company in check by continuously grading them with feedback, frequent job performance appraisals and immediate and proactive response in case someone is not working up to par with the performance needed of them — in a phrase let them go.
In the end, while you are building this team, remember that to be empowered, you yourself have to acquire a practical and growth oriented attitude — a defining character allowing you to make the decisions required of you. (Here is a good starting point for this: HBR’s article on Building Personal Character.)
I wish you all the best!