After 15 years of entrepreneurship the realization I come back to more and more, and in these hyped times even more strongly, is that finding the right people is the one determining factor that will decide whether you will have success or not.
On the one hand that seems like a trivial statement and on the other implementing that realization is a continuous challenge. It starts of course, with a founding team - where anyone who has started up a company knows that what seems to be a perfect team at the phase of imagining the product/the service or wrapping up the prototype, may turn out in effect in the next 6 months not to be the right set of talents and personalities. However, the HR topic becomes even more relevant when you’re hiring your first 20 employees- often finding the right person can be very crucial, even in seemingly less decisive functions such as finance or organization, or even some parts of marketing.
In that critical phase where the company is not yet known, and it is hard to find people who are at all willing to work for the company, management often makes a compromise. In essence you may have no choice, but that compromise can be more costly than not hiring a person at all - and it is always much harder and much less fair to get rid of a person who is in the wrong position, perhaps without fault, than to make the necessary effort to take the right decision in the beginning.
I at least have made this mistake over and over again and I still do not feel much smarter. At the same time, having to go through the process of selection and de-selection of the right team can be very critical for the company culture as well, because issues of fairness and the relationship between the HR consequences and your own management mistakes becomes a predominant topic, especially if you have to let people go. This is all the more relevant because in the initial phases of a company, management is bound to make many mistakes, so the issue of fairness becomes even more dominant.
For employees to understand that the fact that management makes mistakes (and will as shareholding/entrepreneurial management, very probably not be ousted), and at the same time accept that co-workers who were hired on a risky job in a company with an uncertain future, are fired, makes it even more apparently unfair.
There are only 2 ways of avoiding that:
1) be as intransigent (if not more intransigent) with lacking performance on the entrepreneurial or the management’s part (start there). As we say in German “A stairway is always swept from the top”.
2) Secondly, make objectives clear, understandable, quantifiable, but also adjustable and communicate continuously around these objectives, so that the standard of performance is understandable for every employee. This also means that objectives have to relate to the company mission and to the overall goal in a way that every employee understands, shares, commits to and identifies with.
Hiring the right people and finding the right balance between clear objectives, clear leadership, strong enthusiasm and group identification is probably the hardest challenge in setting up a company - this is where companies fail, all other mistakes can often be corrected or adjusted, if need be with fresh capital, but once a company’s corporate culture or the mix of talents and resources is poisoned it’s very hard for a company to overcome that stage, and to then regain enthusiasm, regain momentum and catch up with a market that has probably moved on.
To put it simply, at the end of the day, every company is just a group of people trying to achieve something, set up their own rules and gain success. For that and for the entrepreneur endeavoring to achieve success there is no easy way out, there is no toolbox and there are no simple solutions. It is probably the area where he or she most needs to continuously revise (on a daily basis) what he or she is doing, by which principles and with which success. It is the prime area of self-improvement for an entrepreneur, alongside self-management.
