A founding entrepreneur eager to conquer the business world must have a highly capable team of co-founders, managers and employees. First, founders must start by recognizing the need of a team; and secondly, work diligently on recruiting the most qualified and prepared team members to move a startup forward. The role of the founding entrepreneur is to ensure the team is capable and prepared to overcome the challenges coming ahead. An entrepreneur who understands the need and importance of teams will be better equipped to grow a startup into a successful business.
Before discussing the role of founding entrepreneurs in building teams, it is important to acknowledge the fundamental need to have a team. Entrepreneurs are highly capable individuals; however, successful entrepreneurs understand that an ‘I-alone-can-fix-it’ approach is shortsighted, ineffective will ultimately lead the demise of an otherwise promising startup. Dr. Robert J. Lahnm writes extensively about how entrepreneurs bypassing proper planning and rushing to print the title of President on their business cards, typically fall in the trap of the ‘Me Incorporated’ syndrome wherein the entrepreneur performs all aspects of the business (Lahm, 2015). Entrepreneurs must dream big, think big, and plan for big ideas. An entrepreneur considering a small one-man show, by virtue of simply considering the idea is already engaging in the planning process. So why not consider a large business or a chain? Entrepreneurs can battle the Me-Incorporated syndrome by considering and taking advantage of the benefits of economies of scale and economies of scope. An entrepreneur can achieve this goal by having a team in place to carry out a plan that takes advantage of drops in cost for large scale production (economies of scale) and product variation with resource at hand (economies of scope) (McEachern, 2010).
Founding entrepreneurs play a fundamental role in creating the initial startup team. This team will likely set the tone for a newly created startup and its organizational culture. Forward thinking founders who invest time in recruiting high performing individuals will lay the groundwork for an optimal and strategic startup operation. Eric Herrenkohl calls these high performing individuals A-Players and defines them as “an employee who creates superior results compared to the vast majority of other people who hold the same position in your industry” (Herrenkohl, 2010). The practice of identifying, recruiting and retaining A-players is one of the greatest returns on investment. Founders should look beyond the administrative and HR hurdles of recruitment and focus on the bigger picture. Herrenkohl explains how the impact of hiring a single A-player is exponential and repeating this process over and over leads to building a great business (Herrenkohl, 2010).
The road to success becomes significantly easier if an entrepreneur combines the benefits of optimal production processes with high performing team members. While it might take time and effort to get this setup in place, the benefits are clearly greater than the initial investment.
References
Herrenkohl, E. (2010). How to hire a-players: finding the top people for your team- even if you don’t have a recruiting department. Hoboken, New Jersey: John Wiley & Sons, Inc.
Lahm, Robert J. (2015). Starting your business: avoiding the “me incorporated” syndrome. Ezine Articles. Retrieved from http://ezinearticles.com/?Starting-Your-Business:-Avoiding-the-Me-Incorporated-Syndrome&id=84345
McEachern, W. A. (2010). ECON micro. Mason, Ohio: South-Western Cengage Learning.
“Founders should look beyond the administrative and HR hurdles of recruitment and focus on the bigger picture”….. an absolutely true statement but one that an experienced founder is hard pressed to accomplish. In the early going it is so much easier to simply do it yourself than to worry about whether someone else got the job done. But if you can separate yourself from the task at hand, you will have a better shot to prosper.
Mr. Walton,
I think you highlighted a very important point, many entrepreneurs might be tempted to take a ‘go and do it myself’ kind of approach. I think we can all walk away from this discussion learning that planning is key to limit the amount of tasks entrepreneurs take upon ourselves and shift attention back to more important long term strategic issues.
Best regards,
-Jose