Why do most startups fail? Research shows that not having the right team is one of the leading contributors to startup failure.
Ask most investors, and they’ll emphasize this point. In fact, the team is THE most important factor considered by financiers when deciding who to invest in. The reason for this is simple: great teams are more likely to succeed and make a real impact.
However, team building is hard work and there is no magic playbook for getting it right. In the social impact sector, team building is even more challenging because of tighter budgets and limited resources. According to the Aspen Network of Development Entrepreneur’s State of the Small & Growing Business Sector report, “Finding talented managers is a critical challenge for entrepreneurs everywhere, but it is especially difficult in emerging markets.“
At the SOCAP19 conference, I took the stage with Allie Burns, CEO at Village Capital and Kate Cochran, CEO at Upaya Social Ventures to talk about how we can all help social enterprises build the teams and managers who can scale their organizations. You can access the full presentation embedded below, and read on for the eight key takeaways from the session:
(Make sure to go to slide #30 for all the referenced and linked resources)
Building better managers at social enterprises
We focus on managers because the number one reason people leave their jobs is because of ineffective managers. And while managers don’t often get credit for keeping the best employees at the company, if you look closely, you’ll see that the reason people will stay in their job is because of a sense of purpose, autonomy, and the opportunity to use and grow their strengths. Managers, more than any other person, have control over this and can literally make or break your company. Developing managers is key to your success.
#1: Create a high-performing culture that people want to work in
Companies with strong learning cultures outperform those without them. In addition, your company culture should reflect your unique mission, team, and early team members.
As you start hiring and developing your team, you can use culture to inform the way you all work together and grow together. Culture is more than just fun things and office perks; it’s the operating system that governs how you collaborate, innovate, and build. The Village Capital Talent Playbook offers further guidance to help you and your team develop this culture.
Research from Google provides additional guidance as to what your culture should do: its researchers found that
What really mattered was less about who is on the team, and more about how the team worked together. In order of importance:
- Psychological safety
- Structure and clarity
#2: Build the skills and abilities of your existing team
Even early-stage startups can allocate budget and time to helping team members grow and develop their skills. This is especially important as many startups, on account of limited resources, tend to hire more junior talent who lack certain skills and don’t have experience in effectively managed environments. Great leaders build the team behind the entrepreneur. In addition, offering incentives, like learning budgets and allocated “growth” time can provide a strong recruiting benefit.
The most effective learning cultures follow a 70/20/10 rule: 70% of the time is spent on the job learning, 20% of the time is spent learning from other team members, and 10% of the time is spent learning from online courses or external audiences.
#3: Assess your talent gaps and write great job descriptions
If you’ve met an entrepreneur, you’ve met someone who has made a hiring mistake, most likely as a result of hiring the wrong person for the wrong job. In our panel, we shared the following tips to avoid this pitfall:
- Use a process, like the MovingWorlds Skills Gap Analysis (slide #14), to determine the skills you need in the future, and how to best fill those gaps.
- Write a job description, and vet the description with your management team, mentor, investors, stakeholders, AND peers. As an example, in the Village Capital accelerator, all entrepreneurs have to develop their business plans and then get feedback from fellow entrepreneurs.
- Test your job description on real people that fit the profile of who its meant to attract before broadcasting it far and wide.
Do additional online research, or even hire a consultant, to find out what makes a great job description for your role, country, and organization size.
#4: Get creative in finding and closing the best possible talent
Good talent is HARD to find. As Rippleworks shares from its insights group, managers are hard to find, but there ARE ways to compete for talent even if you don’t have market-level compensation. Ideas for finding the best talent include:
- Posting on leading social impact job boards
- Using platforms like MovingWorlds and Shortlist
- Going on LinkedIn and personally reaching out to people that meet the description of your needs
- Sharing news of your hiring needs with key partners, suppliers, investors, and others in your network
- Networking locally
#5: Screen potential talent to ensure proper skills AND cultural fit
Entrepreneurs tend to jump into things without enough analysis. But with hiring, this has to change. If you’ve taken the time during step #1 to develop a strong culture, it should be easy to brainstorm with your team different ways to screen for cultural fit. Do additional research to find other ideas for best-practices for cultural fit in publications like First Round Review.
At MovingWorlds, we develop a screening framework for every single hire that follows this formula to make sure we get the cultural fit right:
- The team aligns on what factors we need to screen for
- Each team member will be assigned a series of factors to be screened for
- A “bar” will be developed as to what constitutes a minimum level of assurance for each factor
- We choose a diversity of interview techniques that will be used (i.e. mock presentation, writing test, video interview, working session, etc.)
- Pressure test our findings in a real-world scenario that puts the potential hire in a real-world scenario with our team
- We deliberate based on comparing our needs that were established at the beginning with what we discovered about the candidate through the interview process
#6: Onboard talent incrementally
If you find someone to join your team, be creative about onboarding them the right way. In many places, once you’ve hired someone, it is hard to remove them from your team if they are not a good fit. As Kate Cochran shared, the most dangerous talent you can hire is mediocre talent. While it’s easy to fire terrible talent, you can’t remove mediocre talent as easily. As such, you need to do everything possible to only hire great talent (Amazon has a rule of hiring people that are better than at least 50% of your existing employee base). There are a few ways that you can incrementally onboard talent without hiring them as full-time right away:
- Engage them as volunteers first
- Hire them as part-time contractors
- Do a one-week trial with them (they can take vacation/leave from their current job and they can work with you during that time)
- Bring them on client, customer, and/or beneficiary visits
- Host an evening or weekend workshop to see them in action with your team
#7: Develop managers that can develop others
Whether you are new to managing others or have decades of experience, your goal as a manager is to be a “multiplier”. One of the most comprehensive studies on what makes an excellent manager is from Liz Wiseman in the book Multipliers: How the best leaders make everyone smarter.
One of the most important traits of effective managers is for managers to be effective coaches. The GROW model is a well-proven management technique that anybody can easily learn and practice. In addition, reading Helping People Change: Coaching with Compassion for Lifelong Learning and Growth by Richard Boyatzis will help you develop coaching abilities (great summary podcast in HBR here).
More research from Google outlines 10 characteristics of managers who build high-performing teams:
- Is a good coach
- Empowers team and does not micromanage
- Creates an inclusive team environment, showing concern for others’ success and well-being
- Is productive and results-oriented
- Is a good communicator — listens and shares information
- Supports career development and discusses performance
- Has a clear vision/strategy for the team
- Has key technical skills to help advise the team
- Collaborates across the company
- Is a strong decision-maker
Leaders and other stakeholders of organizations should support entrepreneurs in building these 10 competencies in their managers, AND creating the systems and controls to ensure they are adhered to.
Oftentimes, managers feel like they don’t have enough time or guidance to grow as effective managers. In these cases, there are three simple steps that can be used to make a massive leap forward in managerial effectiveness:
- Set clear goals (use the OKR framework)
- Hold monthly business/goal progress reviews (good tips here)
- Host weekly one-on-ones with your direct reports (ideas here)
- Use the GROW model to coach your peers
- Run effective meetings
#8: Create organization-wide systems and processes that enable managers to succeed
People get busy, priorities change, and mistakes happen. Simply mandating that managers meet the 10 criteria above is not enough. Leadership must continue to evolve and strengthen its culture to inspire managers to embody those qualities, and then hold them accountable in maintaining them.
In addition, leaders and the company’s board should audit performance and ensure that the company’s managers are implementing best practices and continuing to improve. This can be done with a combination of surveys, observations, skip-level conversations, and periodic audits of practices.
In one startup we supported, quarterly surveys were issued to track which employees were clear on their goals, who was having their manager one-on-ones, and a variety of other questions to discern whether the company’s culture was safe, supportive, and being upheld.
Building the skills of managers is hard, but it’s one of the most important things we can do to help social good startups grow and flourish. As you think about developing your own high-performing team, remember these eight lessons:
- Create a high-performing culture that people want to work in
- Build the skills and abilities of your existing team
- Assess your talent gaps and write great job descriptions
- Get creative in finding and closing the best possible talent
- Screen potential talent to ensure proper skills AND cultural fit
- Onboard talent incrementally
- Develop managers that can develop others
- Create organization-wide systems and processes that enable managers to succeed
Want to get more involved in building the skills of people behind world-changing ideas? Make sure to follow Village Capital and Upaya Social Ventures, and consider applying to the MovingWorlds Institute Professional Fellowship.