It is very rare for a start-up to recruit a full management team from day one. In the beginning it will be a small team with the CEO wearing quite a few hats. As the business grows, however, so too must the team.
- How do successful entrepreneurs build their management team?
- What is the right way to do this?
- What should the priorities be?
- How do successful entrepreneurs avoid costly mistakes?
There are many well documented parallels between business and sport; ultimately to be the best you have to be in first-rate condition and work with an exceptional management team.
Building the management team within a growing business is not dissimilar to constructing the world-class football team needed to succeed in the Premier League and there is much the business leader can learn from the likes of Sir Alex Ferguson and indeed Claudio Ranieri.
Should I buy-in star performers?
Many businesses adopt the Chelsea or Man City approach; they buy star performers with solid experience of the level they aspire to be.
On the face of it, this is a good decision but it presents many challenges:
- A wage structure which is more expensive than the company can really afford, today. Will I end up over-paying my more average staff?
- Star performers usually only perform well if they are surrounded by other star performers and a support structure – someone to win the ball and someone to pass it to them.
- They tend not to buy-in to the ultimate vision but rather the short term financial rewards. If success doesn’t come immediately your star performer may drop you for a seemingly better team.
- It’s difficult to incorporate star performers into the management team and they require careful management.
Should I recruit young, raw talent with promise and develop my own stars?
An alternative is Arsenal’s strategy to buy younger players with promise but without a track record.
Similarly, Southampton with their world renowned Academy, and an extensive network of scouts are constantly scanning the player market for up and coming talent which they can develop.
- The cost is low.
- They can be moulded into the style the business needs to succeed.
- They don’t have a fear of failure, yet. They don’t know what they don’t know. Nothing is unachievable.
- Will they, however, continue to develop and grow into committed, enthusiastic and successful star performers?
- Does the business have the patience and timeline to wait for the talent to develop?
- What do you do with those that don’t make the grade?
Should I opt for experience over talent?
In the lower divisions managers often opt for a couple of experienced players, not star performers, but players with solid experience and knowhow of the Premier League. They coach and mentor, ’leading by example’, and motivate the team to succeed.
Often smaller companies lack some basic management skills. These skills are easy to find and may be all the company needs to push on to the next level.
Sir Alex Ferguson is famous for embedding one or two world class players who motivated average but experienced players to over-achieve. On top of this he brought through his team of youngsters. Sir Alex Ferguson Reveals Eight Secrets to Success in Managing Teams is an enlightening read.
How do successful business leaders build their management team?
- The successful business leader understands that different skills will be required at different stages of growth.
- They start with a well thought through plan which includes vision, structure, tactics and timescales – a foundation upon which to grow the team.
- They make investing in succession planning an early priority and a continual part of their day-to-day management.
- Mentoring and coaching is systemic in the successful business leader’s organisation.
- Developing positive employee engagement is also a priority. The successful business leader ensures all staff are recruited to the company’s goals and values and they are motivated to contribute to its success.
- Only when the management team can support them, and the business can afford them do successful business leaders bring star performers into the organisation – they recognise that this is an important part of their evolution to a larger, more successful organisation.
- They are not afraid to make tough decisions. They may not be as ruthless as the Premier League Football Manager firing previously-loyal players whose faces no longer fit, but they are still decisive recognising when the team is not quite right. Only Alex Fergusson would have sold David Beckham.
- They know how to manage their investors, who will invariably push for the early purchase of star performers to attain immediate and potentially unsustainable success.
- Successful business leaders understand that as the business grows their market will change, their product will mature, more competition will enter their market and that their product or service will need to evolve. They are intuitive, astute and ambitious but they know they cannot possibly succeed without the right management team behind them.
At Isosceles we have seen both the ‘buy-in stars’ and ‘build and nurture’ approaches. Man City and Chelsea may be akin to the VC backed technology business focussed around being No. 1 in a global market but these are rare, high risk, high reward approaches. Most clients do not have the pockets or appetite for this risk but those adopting a ‘build and nurture’ approach can, if they are not careful, fall into the comfort zone of mid-table obscurity, not taking enough risks.
This season Leicester City has shown that TEAM wins over the individual again and again.