I spent the latter half of my career as an entrepreneur, building two venture capital backed technology corporations. These are proper, bricks-and-mortar, hardware-based companies, engaged in the development of real-world, cutting edge products, requiring R&D and significant up-front investment in materials, equipment and people. Not software-based businesses like BitPerfect, my current adventure. Both those companies are still operating today, which is not so bad, I guess.
Building companies such as these is largely about building teams. Sure, the technological smarts that underlie what you do are the fundamental elements, but the success of the enterprise rests firmly on the shoulders of the team you put in place. They are the ones who do all the real work. Building an effective team, and having that team execute a complex and challenging mission with limited available resources in both budget and time, can be a source of great personal pride, not only for those who build and lead it, but also for the team members who accomplish those goals.
One gentleman, an investor in, and director of, one of my companies, had a lot to say about building effective teams. He liked to address the employees and tell them how his greatest pleasure in life was working with people and building teams. He was a great motivational speaker. I and my co-founder wanted to spend some quality time with him so as to benefit from his knowledge and insights, so we arranged a nice, long dinner together one evening. Over dinner he expanded on his thoughts about effective teams and team building. In every team, he said, 10% of the team are over-achievers and another 10% are under-achievers. Team building, in his view, is about identifying and continuously replacing the under-achievers. It all sounds solid and sensible, in a Johnny Appleseed kind of way.
But what happens after you remove the under-achieving 10%, assuming that you have the wherewithal to be able to identify and attract suitable higher-achievers to replace them? You will have, on balance, an over-achieving team, no? Not in his view. It turns out that you still have an under-achieving 10%. In his view, the bottom 10% of any distribution are inherently, by definition, under-achievers who need to be replaced. By continuously following his strategy, your team gets continuously better, no matter that the same performance which categorizes an employee as an over-achiever one year, may see her categorized as an under-achiever soon afterward, and shown the door. This, apparently, was what he enjoyed when it came to working with people and building teams. Not surprisingly, he was a big college football fan.
The fact of the matter is that sometimes people you hire don’t turn out to be who you thought they were. A good leader will seek to ferret those people out within their first six months, and will be justifiably ruthless in letting them go if they look like they are not going to work out. However, you should at the same time not lose sight of the fact that unless that person has lied on their resume, the hiring was your bad, not theirs. Hey, not all of us are perfect, and we are all bound to make some bad hires from time to time. Hire enough bad people, though, and you need to start looking at your own recruitment methods and skills. But once a new hire has passed his probationary period, your expectation should be for him to make a productive contribution to your company on an ongoing basis, and not just until somebody better happens along.
At this point it is a mistake to imagine that your job then becomes one of making sure your team members continue to get their work done. That is the difference between a manager and a leader. A manager is generally satisfied by achieving objectives A, B, and C, on time and on budget. But a leader will at the same time seek to continuously develop his employees into better and more useful resources. Instead of continuously measuring up your staff for the purpose of weeding out the bottom 10%, find out where they can improve and set about improving them. Teach them how to be top-10% contributors. If they grow their skills sufficiently you will have the pleasant task of promoting them, or, if there isn’t an opening, the satisfaction of seeing them advance their careers in an excellent position elsewhere. Don’t be afraid of losing employees that have outgrown your ability to satisfy ambitions that you have nurtured. Pay it forward. A strong argument can be made that California’s world-beating semiconductor industry effectively grew out of silicon valley’s apple orchards on the backs of a seemingly endless stream of talented executives groomed at the Fairchild Corporation in the 1960’s.
A wise man once told me that the most valuable talent he looks for in a manager is the ability to groom a steady stream of subordinates fully capable of replacing him. Rather than making yourself vulnerable to being replaced by one of them, managers who are able to make managers are actually your most valuable commodity.
Another important aspect that has been key to my own successes in team-building has been to value intelligence and proven skills over domain expertise. Sure, sometimes it is precisely domain experience which is the principal unmet need in your candidate profile, but mostly I find that someone who is smart, inquisitive, enthusiastic, and with a suitable record of actual achievement on their resume, will generally be a more productive team member than somebody who has previously done a similar job for one of your competitors. When you bring fresh thinking to a team it will be more likely to discover new and disruptive ideas. A team long immersed in its field is more likely to end up developing the exact same solutions and approaches as your competitors.
I’ll illustrate that with the following example. I once recruited a guy called Lance into one of my laser companies. Although he was a really sharp individual, he didn’t know much about lasers. He came to my office and asked me what would happen if you launched a multi-mode laser into a single-mode fiber. Now, both the question and the answer are totally beside the point, except to say that it doesn’t work, for a bunch of well-understood reasons that most laser experts could cite. I could have just told him that, and advised him to forget about it. But instead I thought it would be instructive for him to find out for himself, so I suggested he experiment with it during his Friday-afternoon time. In due course, he came to me with the results, which puzzled him, and after examining them they puzzled me too. But I was ultimately able to make sense of them, and … cutting a very long story short … we ended up using Lance’s result to develop a radical new technology, which we duly patented. Anybody who knew the first thing about lasers (me included) would never have bothered performing the initial experiments which led to the invention.
But perhaps the most important aspect of successful and productive team building is to make sure your team contains the right personality types. Or, more accurately, does not contain the wrong types. For this, I would recommend a book. I must confess, I normally have no interest whatsoever in management books, but this is one that has probably taught me the most powerful management lesson of all. It is called “The Drama of Leadership”, by Patricia Pitcher, and I cannot recommend it highly enough.
Patricia Pitcher characterizes leaders as falling into three categories, Artists, Craftsmen, and Technocrats. She introduces these three personality types, goes into their characteristics in some detail, and discusses where they usually fit into an organization. It is hard not to look at all the leaders you have worked with and for, and not immediately start to drop them categorically into one or other of these boxes. I am not going to attempt to reduce the work of a fairly detailed text into a couple of summary paragraphs, but I will tell you what the most important finding is. It is simply this; never, never, never let a technocrat into your organization. Never. If I could give any aspiring entrepreneur a single piece of advice it would be this … Buy.This.Book. [NB Parts 1 and 2 are essential reading, Part 3 less so.]