the founder’s dilemma’s: part 2, adding team members

resource: the founder’s dilemmas

plus: how to hire (esp idea: “hiring means we failed to execute and need help”)

topic: adding team members

purpose: help (prospective) startup/biz owners by presenting key questions to ask yourself, your partner, your team to avoid pitfalls when adding team members

7 questions to ask yourself and your team:

1) are you willing to sacrifice ease of coordination, and increase the likelihood of conflict, in order to have a larger team?

2) will you get enough leverage out of role X such that they are worth the additional cognitive, communication, complexity overhead?

“the larger the team, the greater the coordination costs and the higher the risk that roles will overlap and cause conflict within the team…each additional person also adds more nodes to the communication network, slows things down, and weakens incentives.” -page 81, founder’s dilemmas

3) do you need a larger team because your business exists in a highly-complex business environment?

“the more complex the environment contingencies faced by the startup, the more need for additional founders. Team’s dealing with complex environments need to process more information; larger teams are better able to…a) absorb and recall more items of information, b) correct more errors in inference and analysis, c) consider more potential solutions, d) bring a broader range of perspectives to bear on the problem.” -page 82, founder’s dilemmas

4) are you hiring for speed (homogeneity)? or …. 

“homogeneity has important benefits, perhaps the most immediate which is speed…it generally take[s] less time to find people who are like you in some important way, [it] also generally takes less time to develop effective working relationships. When  founders share a background, they share a common language that facilitates communication. They have higher confidence that they will be able to develop the deep level of trust that is necessary to become and effective founding team. To some extent, they already understand each other …. It is also easier to access people who are similar to you”  – page 91-92, founder’s dilemmas 

“…teams with homogeneous functional experience tend to have been found in multiple related contexts to be less stable than their heterogeneous counterparts.”- page 93, founder’s dilemmas 

5) …. are you hiring for longevity (diversity)? [this admittedly is a false dichotomy]

“…co founders coming from diverse prior companies were more likely to adopt an ‘exploration’ strategy (developing an innovative product that increased variance within the population of organizations and generated intraindustry variety)”. – page 94, founder’s dilemmas 

“Teams with diverse networks are often more creative and innovative, have better acces to a range of potential investors and corporate partners, and ar able to tap into a wider range of potential employees”- page 94, founder’s dilemmas 

6) how are you enabling flexibility in roles today (to enable speed), and planning for specialization in the future (to enable execution)? how are you planning for division of labor to gracefully evolve? 

“During the early stages of a startup, when there are too many things to do and not enough people and time to do them, when the startup is cash-poor, and when the strategy and business model may have to turn on a dime, having an organization with flexible and overlapping roles – changeable as needed-can be a big advantage….this advantage can become a liability… ” – page 124, 128, founder’s dilemmas

7) where on the egalitarian-to-autocratic spectrum is your ideal decision-making approach with your team? 

egalitarian/consensus: “the members of an egalitarian team ignore their official titles, make decisions collectively by coming to a complete consensus, and act as peers rather than superiors and subordinates.” – page 129, founder’s dilemmas 

hierarchical/autocratic: ” hierarchical teams have a formal process for making decisions and a clear hierarchy, with a single person responsible for final decisions” – page 129, founder’s dilemmas 

 

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