Startup Guide, Part 8: Hiring, Managing, Promoting and Dismissing Executive Directors
Part 7
One of the most important things a startup founder must do is to create a top-notch management team. You can write a book on this topic, but in the article I will give basic tips on hiring, managing, promoting and dismissing an ED in a startup, based on my observations and experience.
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Definitions: ID is a leader. One who performs the function and is responsible for a system within the company that contributes to success or failure. The difference between the ID and the manager is that the area of ​​the ID is more extensive in terms of organization, decision making and execution. The manager may ask what to do. The ID should know this himself.
As Andy Grove said: the result of the ID is the result of the organization’s work. Therefore, the main task of the ID is to increase the results of the organization. Although in startups a successful ID should perform three more tasks at once:
- Build your system . When an ID comes to a company from the outside, or to increase, his task is not to care about what is. He has to build a system, often from scratch. This makes it very different from the ID in many large companies that can manage companies created by other people throughout their lives.
- To make a great contribution to the work . ID in a startup should roll up their sleeves and work. At the beginning of a startup, there are always enough critical things to do, and an ID who cannot work on them while building his system will not last long. Again, unlike many large companies, where IDs serve as bureaucrats or administrators.
- To be a team player . ID is responsible for relations with colleagues on a startup, at all levels on all issues. Large companies can withstand rivalry and sub-wars. Startups can't.
Being an ID in a startup is not easy. Significant rewards - the ability to personally influence the success of a startup; opportunities to build and manage the system in accordance with their own ideas. A significant stake in the business, leading to financial independence - if successful. But the responsibility is also very serious.
First, if you are unsure of the need for an ID, do not hire him. Startups, especially those who have received good investments, often hire an ED too soon. Before the product enters the market, it is better that this work is carried out by a manager or director.
Too early hiring can lead to the fact that a person will do very little and be very expensive. This is bad for the ID, for the rest of the team, for expenses and for the company.
Hire an ID only when it is clear why you need it. When you need to build a system. When you need to speed up hiring. When you need more business processes and structure and rigor in following them.
Secondly, hire for the next nine months, not three years. I saw a lot of startups that went overboard with hiring an ED. They had to build a development team, which should increase from 4 to 30 people in the next 9 months - and they hired an ED from a large company that managed a team of 400 people. This is death like. Hire people to work in the next 9 months (approximately). In any case, you will get what you need now, and a hired ID can develop and work successfully for several years. If you overdo it, if you think “this person will be useful to us when we grow up much”, you will hire someone who at best will be bored to work at your current scale, and in the worst case he will not know how to do it.
Thirdly, first of all, raise your employees. The best companies give birth to their own IDs. There are several reasons for this:
- You have the opportunity to develop your best people to the ID, which is good for both parties. This is the best, and perhaps the only, way to hold on to good people in a team for a long time.
- Are you sure that your IDs perfectly understand your corporate culture, strategy and ethics.
- Your ID is a "known evil." People from the outside will have flaws, often serious ones, but you will find out about this only after you hire them. With famous people, you minimize the chance of unpleasant surprises.
Of course, this is not always possible. Which leads us to the next.
Fourthly, my list of key parameters when selecting candidates for ID.
- look for those who are hungry and motivated, who want to try to do "their own way." Comes from a medium-sized company that wants to be an ID in a startup;
- the flip side of the coin: beware of those who "have already tried it." Sometimes you stumble upon a man who was a vice president at four companies, he likes it and he wants to do it in the fifth. More often you will come across those who are no longer hungry and not motivated. This can be a very big problem;
- do not discard people based on their ego or self-conceit, as long as they behave normally. The great IDs and ego are big. You need someone who wants to manage, make decisions, is confident in himself and his capabilities. I do not mean loud impudent, I mean confident and decisive. If the ideal contribution for an investor is to a company that can cope without him, then your ideal ID is the one who can cope without you;
- beware of IDs from large companies. Their skills are not suitable for startups. Even great IDs from big companies have no idea what to do in startups;
- especially beware of IDs from very successful large companies. This is usually tempting - who doesn't want to hire someone who can use their magic from the history of IBM (80s), Microsoft (90s) or Google (our days) on your startup? The problem is that people from successful companies often cannot work in the real world when they do not have the advantage of reaching 80% of the market. In the 1980s, one could hear the advice: “Do not take anyone from IBM right away - let them fail somewhere else, and then hire them.” Believe me;
- The obvious thing, but look at the results of the work of these people and check them.
Fifth, you can use the services of a recruiter - but not for evaluation, but for searching for candidates. Some recruiters may rate people well, some not. But it does not matter, you yourself must evaluate the person and make a decision. I mentioned this because I have never met a recruiter who doubted his ability to evaluate candidates. This can be a trap for the founder of a startup - trust the recruiter, instead of checking everything yourself. You do not need this risk. If something goes wrong, you will have to dismiss the ID.
In the sixth, be prepared for the payment of large compensations, including cash (not equity), but pay attention to the "bells" during the discussion. You need someone interested in the development of the company. So, first of all, interested in obtaining a share in it. Be wary of candidates who want to get glaring wages, high bonuses, long vacations, other buns, and even worse - guaranteed severance pay. A candidate who clings to such things is not ready to work in a startup.
Seventh, by hiring an ID for your former place, do not hire someone obviously weak. It sounds silly, but you will not believe how often this happens. CEO, a former product manager with a weak product ID. CEO, former salesman, with a weak sales ID. Etc. I call this the “problem of weak Eisner IDs,” in honor of CEO Disney, who was a great TV network ID. When Disney acquired ABC, the channel was an outsider. And what did he say? “If I had two extra days in a week, I would change the situation with ABC.” Well, he did not have two extra days!
The CEO, or the founder of a startup, often finds it hard to part with the position he held. As a result, you hire someone weak to stay cool in your eyes — consciously or subconsciously. Make sure that the person you are hiring will do the job much better than you.
Eighth, be aware that hiring an ID is a big risk. You can often hear from a startup where the development process is broken, “we will hire a vice president for development, and he will fix everything for us”. Or a startup that does not reach the sales targets, but “we will hire a sales ID and the profit will go.” There is a problem: in my experience, if you know what you are doing, the chances that a hired ID will work for you, approximately 50 to 50. That is, in 50% of cases, nothing will turn out and you will have to change it. And if you do not know what you are doing, the probability of failure is close to 100%.
Why? People are people. They have their own troubles, problems - and they are not visible until you recognize them. These deficiencies are usually lethal to the ID. And sometimes a person just does not fit. Therefore, I urge the need to improve their own employees. At least you know their weaknesses beforehand.
First, manage your IDs. Often, the founders of startups hire IDs, and they are reluctant to manage. "I just hired a miraculous experienced development ID, who has a lot more experience than me - I just let him do what he sees fit."
It is a bad idea. Respecting the experience and skills, you still need to manage each of the ID, as ordinary employees. Weekly meetings with job reviews, written goals, career development plans, the whole story. Skip this - and your relationship and its effectiveness will go astray.
This is true for situations where you are 22, and he is 40, 50 or 60! Do not hesitate, it only scares him.
Second, give the id the authority to create their systems. This complements the previous point, but is just as important. Do not engage in micromanagement. The whole point of hiring an ED is for someone to think for you how to build and manage a system. Manage your ID, understand what he does, clearly define goals - but let him do his job.
The key consequence is that if you want to give an ID carte blanche, but you are not sure that he will cope with this, then it is time to dismiss him. In my experience, it is not so rare that a CEO doubts and does not want to give the reins to his ID. This is a good signal that the ID can not cope, and should leave.
Third, break the hierarchy mercilessly to collect more data. I do not mean to give instructions to subordinate IDs without his knowledge. I mean, ask questions - always, at all levels of the system. How are you? What do you think about new employees? How often do you meet with the manager? Etc. Do not let the ID carry most of your system information. This is the best way to wonder when failure occurs. By the way, a good ID is not against the CEO talking to his subordinates. Moreover, he loves it, because the CEO can just hear more good reviews about the work of the ED. If your ID does not want you to talk to his subordinates, this is a bad ID.
There are some contradictions here, but I really like to raise talented people with all possible speed. To raise workers to ID, and ID to give more work and responsibility. Of course, you can go too far, and raise a person before he is ready. In the worst case, it will ruin his career (floated, we know). You can also increase someone who will thereby reach his level of incompetence - the principle of Peter (floated, we know).
However, life is short, startups are developing fast, and you need to do a lot of things. You will not have the opportunity to work with a large number of excellent, talented people with great potential in your career. If you come across this - increase it quickly. He is better, companies are better and better. It is understood that you train and control the person in the process. This exercise we will leave to the reader.
An excellent indicator that a person is ready for improvement - they do an excellent job with managing the current team. Projects work, morale is on top, hired beginners cope, people are happy. Time to raise someone and throw them new challenges.
I firmly believe that most people who do something great are doing it for the first time. I would hire someone who is impatient to do something for the first time, than someone who has already done this before and is not in a hurry to repeat. You are rarely mistaken, giving a chance to someone with good potential. We assume that you can distinguish people with high potential from the rest. This we also leave to the reader as an exercise.
First, be aware of the paradox of dismissing an ED. On the one hand, data is required to evaluate the ID. It is impossible to evaluate an ED based on its own results, as an ordinary employee — it should be evaluated on the basis of the results of the system created by it. To create a system takes time. Therefore, the process of evaluating the ID takes more than the assessment of an ordinary employee. On the other hand, an ID can create more damage than a regular employee. If the employee can not cope - replace it. If the ID does not cope - in the worst case, he can ruin what he was responsible for, until the failure of the entire company. Therefore, it is much more important to dismiss a bad ID in time than a bad employee.
There is no solution to the paradox. This is a constant problem. I once asked this from Andy Grouve, one of the best CEOs in the world. He replied that when an ID is fired, it is always too late. If you are well versed, you will fire him three months later than necessary. But it will always be too late. If you fired an ED so that it was not too late, it means that you didn’t collect enough data, and you risk appearing self-willed and capricious.
Secondly, as soon as you have a bad feeling, start collecting data. Break the hierarchy. Talk to everyone. Understand what is happening. And if this is not paranoia (and I met paranoids among the founders and CEO, oddly enough) - you need to collect data, because you have to dismiss the ED. And if you are young, then in about three months. In the meantime, do everything possible to tighten and improve the ID. If it works, great. No - get ready.
What you should pay attention to:
- Does the ID hire people? If there are vacancies, but there are no people, you have a problem. No better than hired people do poorly and pull down the average quality of the organization.
- Does the EID train and develop their subordinates? Typically, IDs are hired for a direction that they have already begun to develop. And in a few months, people working in this area should improve their performance and respect the skills of the ED. If this does not happen - you have a problem.
- what do other eid think? The best IDs are not perfect, but their colleagues always respect them. If other IDs are skeptical after several months of work, you have problems.
- Are you inconvenient to communicate with the ID? Are you trying to avoid or cancel one-on-one meetings? Do you communicate with him a headache? Do you often don’t understand what he wants to say, or why he concentrates on some strange topic for you? If so, then you have problems.
Third, lay off resolutely. Firing ID sucks. It undermines the organization. It creates a lot of work for you - in particular, the need to look for a new ID. And you risk looking bad, because you hired him.
And it always happens at the wrong time, when you least need such problems. And all the same, all that remains to be done is to do it, professionally, intelligibly explaining to everyone what is waiting for them, and continue moving.
In my experience, people, dismissing the ID, make two of the most frequent mistakes - and both errors from the category “nedelzhil”.
- Long periods of waiting. Seductive but counterproductive. Embarrassing, demoralizing and looking weird. Instead, break up abruptly, hire a new person and keep moving.
- demotion, as an alternative to dismissal (or, as they say, “I know - let's hire him a boss!”). I hate it. Excellent workers do not take a fall well. There are exceptions - but if you are not 100% sure, it is better not to do so.
Fourth, do not blame yourself. You are not decapitating anyone. Any ID hired in a startup will be easier to find a job later. In the end, you can always make you crazy or incompetent. And most of all, by dismissing an ID, you do him a favor — you give him a chance to find yourself in another company, where he will be more valued, respected, and where he will be more successful. It sounds sentimental, but I really think so. And if they fail, then he has serious problems, and you just got rid of them.
And on this optimistic note, I wish you good luck!
Part 9
One of the most important things a startup founder must do is to create a top-notch management team. You can write a book on this topic, but in the article I will give basic tips on hiring, managing, promoting and dismissing an ED in a startup, based on my observations and experience.
')
Definitions: ID is a leader. One who performs the function and is responsible for a system within the company that contributes to success or failure. The difference between the ID and the manager is that the area of ​​the ID is more extensive in terms of organization, decision making and execution. The manager may ask what to do. The ID should know this himself.
As Andy Grove said: the result of the ID is the result of the organization’s work. Therefore, the main task of the ID is to increase the results of the organization. Although in startups a successful ID should perform three more tasks at once:
- Build your system . When an ID comes to a company from the outside, or to increase, his task is not to care about what is. He has to build a system, often from scratch. This makes it very different from the ID in many large companies that can manage companies created by other people throughout their lives.
- To make a great contribution to the work . ID in a startup should roll up their sleeves and work. At the beginning of a startup, there are always enough critical things to do, and an ID who cannot work on them while building his system will not last long. Again, unlike many large companies, where IDs serve as bureaucrats or administrators.
- To be a team player . ID is responsible for relations with colleagues on a startup, at all levels on all issues. Large companies can withstand rivalry and sub-wars. Startups can't.
Being an ID in a startup is not easy. Significant rewards - the ability to personally influence the success of a startup; opportunities to build and manage the system in accordance with their own ideas. A significant stake in the business, leading to financial independence - if successful. But the responsibility is also very serious.
Hiring
First, if you are unsure of the need for an ID, do not hire him. Startups, especially those who have received good investments, often hire an ED too soon. Before the product enters the market, it is better that this work is carried out by a manager or director.
Too early hiring can lead to the fact that a person will do very little and be very expensive. This is bad for the ID, for the rest of the team, for expenses and for the company.
Hire an ID only when it is clear why you need it. When you need to build a system. When you need to speed up hiring. When you need more business processes and structure and rigor in following them.
Secondly, hire for the next nine months, not three years. I saw a lot of startups that went overboard with hiring an ED. They had to build a development team, which should increase from 4 to 30 people in the next 9 months - and they hired an ED from a large company that managed a team of 400 people. This is death like. Hire people to work in the next 9 months (approximately). In any case, you will get what you need now, and a hired ID can develop and work successfully for several years. If you overdo it, if you think “this person will be useful to us when we grow up much”, you will hire someone who at best will be bored to work at your current scale, and in the worst case he will not know how to do it.
Thirdly, first of all, raise your employees. The best companies give birth to their own IDs. There are several reasons for this:
- You have the opportunity to develop your best people to the ID, which is good for both parties. This is the best, and perhaps the only, way to hold on to good people in a team for a long time.
- Are you sure that your IDs perfectly understand your corporate culture, strategy and ethics.
- Your ID is a "known evil." People from the outside will have flaws, often serious ones, but you will find out about this only after you hire them. With famous people, you minimize the chance of unpleasant surprises.
Of course, this is not always possible. Which leads us to the next.
Fourthly, my list of key parameters when selecting candidates for ID.
- look for those who are hungry and motivated, who want to try to do "their own way." Comes from a medium-sized company that wants to be an ID in a startup;
- the flip side of the coin: beware of those who "have already tried it." Sometimes you stumble upon a man who was a vice president at four companies, he likes it and he wants to do it in the fifth. More often you will come across those who are no longer hungry and not motivated. This can be a very big problem;
- do not discard people based on their ego or self-conceit, as long as they behave normally. The great IDs and ego are big. You need someone who wants to manage, make decisions, is confident in himself and his capabilities. I do not mean loud impudent, I mean confident and decisive. If the ideal contribution for an investor is to a company that can cope without him, then your ideal ID is the one who can cope without you;
- beware of IDs from large companies. Their skills are not suitable for startups. Even great IDs from big companies have no idea what to do in startups;
- especially beware of IDs from very successful large companies. This is usually tempting - who doesn't want to hire someone who can use their magic from the history of IBM (80s), Microsoft (90s) or Google (our days) on your startup? The problem is that people from successful companies often cannot work in the real world when they do not have the advantage of reaching 80% of the market. In the 1980s, one could hear the advice: “Do not take anyone from IBM right away - let them fail somewhere else, and then hire them.” Believe me;
- The obvious thing, but look at the results of the work of these people and check them.
Fifth, you can use the services of a recruiter - but not for evaluation, but for searching for candidates. Some recruiters may rate people well, some not. But it does not matter, you yourself must evaluate the person and make a decision. I mentioned this because I have never met a recruiter who doubted his ability to evaluate candidates. This can be a trap for the founder of a startup - trust the recruiter, instead of checking everything yourself. You do not need this risk. If something goes wrong, you will have to dismiss the ID.
In the sixth, be prepared for the payment of large compensations, including cash (not equity), but pay attention to the "bells" during the discussion. You need someone interested in the development of the company. So, first of all, interested in obtaining a share in it. Be wary of candidates who want to get glaring wages, high bonuses, long vacations, other buns, and even worse - guaranteed severance pay. A candidate who clings to such things is not ready to work in a startup.
Seventh, by hiring an ID for your former place, do not hire someone obviously weak. It sounds silly, but you will not believe how often this happens. CEO, a former product manager with a weak product ID. CEO, former salesman, with a weak sales ID. Etc. I call this the “problem of weak Eisner IDs,” in honor of CEO Disney, who was a great TV network ID. When Disney acquired ABC, the channel was an outsider. And what did he say? “If I had two extra days in a week, I would change the situation with ABC.” Well, he did not have two extra days!
The CEO, or the founder of a startup, often finds it hard to part with the position he held. As a result, you hire someone weak to stay cool in your eyes — consciously or subconsciously. Make sure that the person you are hiring will do the job much better than you.
Eighth, be aware that hiring an ID is a big risk. You can often hear from a startup where the development process is broken, “we will hire a vice president for development, and he will fix everything for us”. Or a startup that does not reach the sales targets, but “we will hire a sales ID and the profit will go.” There is a problem: in my experience, if you know what you are doing, the chances that a hired ID will work for you, approximately 50 to 50. That is, in 50% of cases, nothing will turn out and you will have to change it. And if you do not know what you are doing, the probability of failure is close to 100%.
Why? People are people. They have their own troubles, problems - and they are not visible until you recognize them. These deficiencies are usually lethal to the ID. And sometimes a person just does not fit. Therefore, I urge the need to improve their own employees. At least you know their weaknesses beforehand.
Control
First, manage your IDs. Often, the founders of startups hire IDs, and they are reluctant to manage. "I just hired a miraculous experienced development ID, who has a lot more experience than me - I just let him do what he sees fit."
It is a bad idea. Respecting the experience and skills, you still need to manage each of the ID, as ordinary employees. Weekly meetings with job reviews, written goals, career development plans, the whole story. Skip this - and your relationship and its effectiveness will go astray.
This is true for situations where you are 22, and he is 40, 50 or 60! Do not hesitate, it only scares him.
Second, give the id the authority to create their systems. This complements the previous point, but is just as important. Do not engage in micromanagement. The whole point of hiring an ED is for someone to think for you how to build and manage a system. Manage your ID, understand what he does, clearly define goals - but let him do his job.
The key consequence is that if you want to give an ID carte blanche, but you are not sure that he will cope with this, then it is time to dismiss him. In my experience, it is not so rare that a CEO doubts and does not want to give the reins to his ID. This is a good signal that the ID can not cope, and should leave.
Third, break the hierarchy mercilessly to collect more data. I do not mean to give instructions to subordinate IDs without his knowledge. I mean, ask questions - always, at all levels of the system. How are you? What do you think about new employees? How often do you meet with the manager? Etc. Do not let the ID carry most of your system information. This is the best way to wonder when failure occurs. By the way, a good ID is not against the CEO talking to his subordinates. Moreover, he loves it, because the CEO can just hear more good reviews about the work of the ED. If your ID does not want you to talk to his subordinates, this is a bad ID.
Promotion
There are some contradictions here, but I really like to raise talented people with all possible speed. To raise workers to ID, and ID to give more work and responsibility. Of course, you can go too far, and raise a person before he is ready. In the worst case, it will ruin his career (floated, we know). You can also increase someone who will thereby reach his level of incompetence - the principle of Peter (floated, we know).
However, life is short, startups are developing fast, and you need to do a lot of things. You will not have the opportunity to work with a large number of excellent, talented people with great potential in your career. If you come across this - increase it quickly. He is better, companies are better and better. It is understood that you train and control the person in the process. This exercise we will leave to the reader.
An excellent indicator that a person is ready for improvement - they do an excellent job with managing the current team. Projects work, morale is on top, hired beginners cope, people are happy. Time to raise someone and throw them new challenges.
I firmly believe that most people who do something great are doing it for the first time. I would hire someone who is impatient to do something for the first time, than someone who has already done this before and is not in a hurry to repeat. You are rarely mistaken, giving a chance to someone with good potential. We assume that you can distinguish people with high potential from the rest. This we also leave to the reader as an exercise.
Dismissal
First, be aware of the paradox of dismissing an ED. On the one hand, data is required to evaluate the ID. It is impossible to evaluate an ED based on its own results, as an ordinary employee — it should be evaluated on the basis of the results of the system created by it. To create a system takes time. Therefore, the process of evaluating the ID takes more than the assessment of an ordinary employee. On the other hand, an ID can create more damage than a regular employee. If the employee can not cope - replace it. If the ID does not cope - in the worst case, he can ruin what he was responsible for, until the failure of the entire company. Therefore, it is much more important to dismiss a bad ID in time than a bad employee.
There is no solution to the paradox. This is a constant problem. I once asked this from Andy Grouve, one of the best CEOs in the world. He replied that when an ID is fired, it is always too late. If you are well versed, you will fire him three months later than necessary. But it will always be too late. If you fired an ED so that it was not too late, it means that you didn’t collect enough data, and you risk appearing self-willed and capricious.
Secondly, as soon as you have a bad feeling, start collecting data. Break the hierarchy. Talk to everyone. Understand what is happening. And if this is not paranoia (and I met paranoids among the founders and CEO, oddly enough) - you need to collect data, because you have to dismiss the ED. And if you are young, then in about three months. In the meantime, do everything possible to tighten and improve the ID. If it works, great. No - get ready.
What you should pay attention to:
- Does the ID hire people? If there are vacancies, but there are no people, you have a problem. No better than hired people do poorly and pull down the average quality of the organization.
- Does the EID train and develop their subordinates? Typically, IDs are hired for a direction that they have already begun to develop. And in a few months, people working in this area should improve their performance and respect the skills of the ED. If this does not happen - you have a problem.
- what do other eid think? The best IDs are not perfect, but their colleagues always respect them. If other IDs are skeptical after several months of work, you have problems.
- Are you inconvenient to communicate with the ID? Are you trying to avoid or cancel one-on-one meetings? Do you communicate with him a headache? Do you often don’t understand what he wants to say, or why he concentrates on some strange topic for you? If so, then you have problems.
Third, lay off resolutely. Firing ID sucks. It undermines the organization. It creates a lot of work for you - in particular, the need to look for a new ID. And you risk looking bad, because you hired him.
And it always happens at the wrong time, when you least need such problems. And all the same, all that remains to be done is to do it, professionally, intelligibly explaining to everyone what is waiting for them, and continue moving.
In my experience, people, dismissing the ID, make two of the most frequent mistakes - and both errors from the category “nedelzhil”.
- Long periods of waiting. Seductive but counterproductive. Embarrassing, demoralizing and looking weird. Instead, break up abruptly, hire a new person and keep moving.
- demotion, as an alternative to dismissal (or, as they say, “I know - let's hire him a boss!”). I hate it. Excellent workers do not take a fall well. There are exceptions - but if you are not 100% sure, it is better not to do so.
Fourth, do not blame yourself. You are not decapitating anyone. Any ID hired in a startup will be easier to find a job later. In the end, you can always make you crazy or incompetent. And most of all, by dismissing an ID, you do him a favor — you give him a chance to find yourself in another company, where he will be more valued, respected, and where he will be more successful. It sounds sentimental, but I really think so. And if they fail, then he has serious problems, and you just got rid of them.
And on this optimistic note, I wish you good luck!
Part 9
Source: https://habr.com/ru/post/238361/
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