Journey of a Serial Entrepreneur

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How to get from where you are to where you want to be

5 Steps to Better Startup Leadership

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There is a school of thought which believes that leaders are born, not made. Others believe the same applies to entrepreneurs. I have yet to see any conclusive evidence to support these claims. I am a firm believer that, with enough passion, hard work and ambition, anyone can achieve what they set out to do. Wanting to become a great leader is undoubtedly a most challenging task. Volumes have been written about leadership skills and how to develop them. However, inspiration and understanding concepts from books will only get you so far. If you really want to test your abilities and believe that you have what it takes to be a leader, you must stand up and take responsibility. It is all about being action oriented and wanting to bring out the best in the people who work with you. 

Over the course of the week I have written about five areas I believe younger startup leaders need to become more effective in. I have seen the positive impact on a team’s productivity, motivation and drive when a leader has focused on the following segments:

1. Vision Development: As a leader, it is your initial responsibility to create a vision with your team, one which is strongly rooted in SMART goals. The team must feel and think that the vision is achievable, and know what action steps need to be taken to reach it. It is only when a vision statement becomes more than a piece of paper, will we actually see a boost in productivity of the overall team. To read more about the importance of creating a vision please click here.

2.  Leaders Attitude: A leader’s attitude is usually the defining difference between a good team and a great team. With the right attitude, we assist the team break down mental barriers which may be holding them back, take away the fear of making mistakes and generally help them push themselves further. Pay closer attention to attitude, it should result in a team having higher productivity,and being more motivated and driven to reach their goals. To read more about the importance of a leader’s attitude please click here.

3. Culture of Candor: The ability to express one’s thoughts, opinions and concerns, free from discrimination is something I believe needs to be infused into every team. As a leader, there must be a focus on breaking down psychological barriers which may be holding certain team members back. Being candid allows the team to work more effectively, brings more ideas to the tables as well as issues which may be disrupting the team internally, to the forefront. To learn more about the importance of candor please click here.

4. Resource Allocation: During your startup journey, you will need to make several key decisions regarding resource allocation. A startup without proper allocation of resources, ends up in difficult situations, which may result in layoffs, discontinuing product/services, drop in quality, overburdening of some assets and may even require shutting the business down as a whole. As a leader, it is your responsibility to put systems into place to allocate resources optimally through a structured and rigorous processes, while keeping in mind the larger picture. To learn more about the importance of resource allocation please click here.

5. Team Management: This segment involves more than just making sure everyone on the team is happy or motivated. It requires the leader to take responsibility to develop structured processes to handle recruitment, evaluations, firing and conflict management. As a leader we have to be constantly in touch with our team and the challenges they face, to ensure we do whatever it takes to help them reach their potential. To learn more about the importance of team management please click here.

Undoubtedly the startup leader is in for a lot of surprises. The aim of this series was to equip new startup leaders with some broad guidelines of areas they should be focusing on. I strongly believe that when enough hard work is put into the development of the segments outlined above, they will definitely have a positive impact on the team and the business as a whole. It is important that you enjoy your journey both as an entrepreneur and a leader. I wish you the best of luck in your future entrepreneurial ventures.

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Managing the Team

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We hear it all the time “People are our most important strategic asset”, it is like a mantra of the business world today, repeated by CEO’s of Fortune 500 companies and new startups alike. However, if  you get down to gauge what leaders and managers are actually doing, to develop and nurture these assets, the standard response includes; our focus is on training and development, creating a conducive work environment or, helping the team achieve a work/life balance. After which there is usually a change of subject, and the topic switches to more ‘exciting’ matters, such as, their latest technology innovation. This has been my personal experience with many leaders and managers. I feel they are missing critical components of what it takes to develop and grow a team. 

I believe the reason too much attention is not spent on the function of ‘HR’, is due to the fact that it’s results are intangible in the short term. What is the ROI of $X on training & development in a year? How does a more rigorous performance management system impact productivity? These are difficult questions to answer. However, trends are now becoming clearly apparent that senior management across the world are beginning to understand the importance of management of this asset. In the coming years, I expect to see radical transformations in this field. So, how does all of this impact a leader of a startup organization? 

As a startup leader, one has to play multiple roles. One of the key roles is to focus on being responsible for the management of your team to the best of your abilities. Until you can afford a good HR resource, this is a responsibility that falls in your scope of work. A couple of key areas where a startup leader should spend time during the early stages of the organization are:

1. Hiring: This component encompasses adding new people to the team, evaluating prospective partners and even vendor selection. In the beginning, adding an additional resource to say a team of 4, is a substantial percentage increase in head count. This resource will have a deep impact on the rest of the team and requires careful selection. As a leader, you are responsible for coming up with basic job descriptions, required competencies and the preferred type of personality needed for the role. Learn to trust your gut instincts as they are usually right. Develop a structured process for the hiring and evaluation stage to streamline future requirements when the team is growing at a faster pace.

2. Evaluation: When we think performance reviews, many imagine complicated forms which take forever to complete, and have no real impact on the individual. This is very true of a lot of performance review processes found in many organizations. I like to keep things simple, a couple of questions relating to past performance, areas where development is required, issues brought up by other team members is all that is needed. I think it is important to have metrics in place which can tell your team members how they are doing and where they need to develop. Develop a short evaluation form and conduct them candidly every quarter if possible.

3. Firing: This is a tough one. I am not comfortable with the firing process yet, it is however an important aspect of being a leader. When a team member, whether a partner or an employee, in spite of repeated reminders and warnings regarding performance or behavior, does not change, a difficult decision needs to be made. This process becomes easier if you have a culture of candor present in your team. One needs to communicate the basis of the decision clearly and be firm. One bad team member is all it takes to drastically reduce productivity and team spirit. The sooner these situations are handled the better.

As a leader it is your responsibility to be in touch with your team constantly. This helps to understand where they need assistance, what their concerns are, as well as be a source of inspiration and guidance. If  all we do is keep paying lip service to ‘developing our most strategic asset’, the team will not be able to reach its potential and we would not have fulfilled our duties as a leader. 

Related Posts:

8 Characteristic of ideal business partners

5 Steps to creating winning teams

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Optimizing Resource Allocation

Dilbert.com

Resource allocation is an area I believe many startups pay inadequate attention to. It does not matter if you are bootstrapping or have just received a massive cash injection, planning resource allocation is a critical function. A startup without proper allocation of resources, ends up in difficult situations, which may result in layoffs, discontinuing product/services, drop in quality, overburdening of some assets and may even require shutting the business down as a whole. I have personally witnessed repercussions of misallocation of resources, this has made me realize even more, the vital importance of this function. 

During your startup journey, you will need to make several key decisions regarding resource allocation. Some key ones are hiring, purchasing of equipment,  investment in new products/services, upgrading of office premises, expansion, marketing and staff development. Apart from this, there will be a constant flow of new proposals and investment opportunities, these will make the allocation process even more challenging. As a leader, it will be your responsibility to manage the expectations of the business, stakeholders and your team, to reach an allocation mix, aimed at satisfying each one of them. In my experience, aiming for a perfect equilibrium is a great challenge, difficult sacrifices will need to be made and not everyone will be completely satisfied.

I like to keep things as simple as possible, here are a few basic steps I take when thinking about resource allocation:

1. Planning: If you are at an early stage in your business, use the business plan to give you a holistic picture of goals, and a time frame for achieving them. Use that as your guide plan for resource allocation to various segments. If you are already well into your business, take a look at the historic performances of your products/services, evaluate your cash flow positions for the coming year and allocate resources appropriately. It is important to be in a position to see the bigger picture before any resource allocation is done. 

2. Analysis: During the planning stage, there will undoubtedly be several options for resource allocation. It is important that all the opportunities are carefully evaluated. Conduct feasibility studies and market research before making any substantial investment. It is important to look at future requirements the investment will have as well. Overlooking future implications of current investments, can result in massive cash flow problems which can literally bring business to a halt. Where necessary, use a ranking matrix to evaluate your decisions.

3. Consensus: It is important to get feedback and have open discussions during the resource allocation exercise. Wherever possible, use experts in their respective areas to help guide and educate the rest of the team. The last thing you want to do as a leader is to appear to make key decisions such as resource allocation autonomously. As a leader, it is your responsibility to present all available options and give your point of view for the optimal course. 

The objective of this post is to emphasize the importance of proper resource allocation. The steps outlined should help in developing a basic framework to help you during this process. I intend to do a more detailed post regarding various resource allocation strategies soon for specific types of businesses. 

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5 Steps to Manage Conflict

“The harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly; it is dearness only that gives everything its value. I love the man that can smile in trouble, that can gather strength from distress and grow brave by reflection. ‘Tis the business of little minds to shrink; but he whose heart is firm, and whose conscience approves his conduct, will pursue his principles unto death.” Thomas Paine

There is no doubt, managing conflicts is a challenging task. On my journey as an entrepreneur I have had my share of conflicts. I think working in close proximity and under much pressure, tends to raise conflicts more frequently in entrepreneurial ventures. It is hence important to know how to handle them more effectively. Losing a team mate, a client or a supplier can spell the end for a young startup. Listed below are five steps to help manage conflicts in a systematic and structured manner, and thus reach a fair and faster consensus.

1. Facts: Before anything is discussed or negotiated, it is important that all relevant details are documented. This includes finding core reasons behind the conflict, the stage the conflict is at, and the affected parties. It is important to be objective when documenting these factors, and ensure that each one of the affected individuals is part of the process. To read more about the fact finding process please click here

2. Ground Rules: Developing a set of rules and structure can greatly facilitate conflict resolution. It is important to let all the participants know what is expected of them. It also helps to formalize the actual negotiation process with a set agenda, and a mediator if possible. Setting up such a structure helps the negotiation process run smoothly, with each participant well aware, before hand, about the discussion agenda. To read more about setting appropriate ground rules please click here.

3. Negotiations: The actual negotiation stage brings all the concerned parties together, to discuss their points of view in a structured manner. It is important to insist that each participant keep their mind open to different options, even if they do not agree with them. Keeping a close mind and remaining stubborn makes the process more challenging to manage. During this stage, notes need to be taken down regarding options discussed and differences and concerns that were voiced. To read more about the negotiation stage please click here.

4. Evaluation: After the negotiation stage, all the participants are called back at a later date to discuss the options discussed during the negotiation stage. At this time, it is important to establish a set of objective criterions, to ensure the options discussed are feasible, fair and take into account the larger picture. There are several strategies which can be used at this stage to rank or combine options, and to come up with a mutually agreeable option. To read more about the evaluation stage please click here.

5. Closure: The final stage of a conflict management process involves bringing closure to the argument. This is done by  formalizing whatever was discussed and decided into a written document, which clearly outlines everyone’s responsibilities and roles. It is important that a commitment is made to follow through on what was decided. Periodic meetings can be established to ensure that everything is moving as planned, with suggestions and feedback provided along the way. To read more about closure please click here.

I have followed this system in conflicts I have been involved in. However, given the variances in every conflict, one needs to improvise along the way. Managing conflicts is a challenging task, especially when they have been brewing under the surface for long periods of time. Reaching a formal agreement acceptable to all the concerned individuals is a major feat. It requires patience, an open mind and the willingness to be flexible. It is much easier to be stubborn and refuse to change a position, rather than be adaptable and sacrifice for a more congenial and brighter future. 

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Closure

“The most intense conflicts, if overcome, leave behind a sense of security and calm that is not easily disturbed. It is just these intense conflicts and their configurations which are needed to produce valuable and lasting results.” Carl Gustav Jung

Closure is one of the most critical components of successful conflict resolution. Without it, there is always something unfinshed hanging in the air and this makes people uncomfortable. I am sure many of us have been involved in conflicts which have ended without the required closure. It is not a pleasant situation, and if you then have to continue working with the persons concerned, it can be most awkward. To avoid such situations and reach closure, there are a few things I work on ensuring. 

1. Written Plan: Ensure that everything that has been discussed and decided upon, is written down in a formal document. This document should outline levels of future responsibility, possible compensation agreements, changed working arrangements or any other directives that are to be carried out. Putting it all down on paper makes it tangible, and easy to take ownership of.

2. Commitment: It is important that once a mutually agreeable option has been accepted, tasks and roles allocated, everyone commits to whatever they were assigned. A personal commitment is as important as having faith in the abilities of others to carry out their parts. This is not a time to doubt the follow through abilities of others. At this time more than ever, it is necessary to begin and rebuild the trust which may have been lost in the process.

3. Periodic Checks: A system to routinely check the progress of what was decided and agreed upon is vital, to ensure everyone is keeping their end of the deal. Such checks help monitor team progress and provide valuable insight into the team or individuals working dynamics. Such meetings can be a sounding board for suggestions, complaints or feedback. 

Closure after a long drawn out conflict is a liberating and empowering feeling, and helps us face challenges with ease and confidence. It reminds us, that survival in this world, requires us to learn to be flexible and move forward. Being stubborn and refusing to see different sides of a conflict, renders us incapable of moving forward. 

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Evaluating Options

“There are three ways of dealing with difference: domination, compromise, and integration. By domination only one side gets what it wants; by compromise neither side gets what it wants; by integration we find a way by which both sides may get what they wish.” Mary Parker Follet

Once the negotiation stage has been cleared, all options presented and discussed need to be evaluated. During this stage, respective parties need to set their differences aside, and work towards reaching a consensus where both parties are satisfied with the outcome. This is by far one of the most challenging stages in the conflict management process. Much of the time such situations conclude in deadlocks, because one party may not be open to entertaining any option other than one which benefits them. Conflict resolution needs a certain level of sacrifice from each party to reach a mutually beneficial agreement. 

Some steps which can help reach a mutually beneficial agreement are:

1. Developing Criterions: Prior to starting this phase it is important to establish some base criterions. These include ensuring that all options discussed are feasible and fair. It is also equally important to identify a set of objective criterions which help each of the participants look at the larger picture. This helps set a tone which in turn helps the flow of the discussion and reaching a mutually beneficial agreement, faster. 

2. Ranking: To begin the process, rank the options discussed in the negotiation stage. This will help the participants decide jointly which options address the needs of the group and their own needs. This is a tricky exercise, as each participant would like to rank the options which benefit them the most, on top. To resolve this issue, each option should be graded against a set of objective criterions which are mutually agreed upon. This helps bring objectivity and fairness into the process.

3. Combining of Options: I have found that it is often possible to combine certain options, thereby creating a mutually acceptable option to both parties. Through this method we can bridge differences in opinions, which may limit parties to reach a mutually agreeable agreement. This takes some creativity,  at the same time, helps to think out of the box when resolving conflict. 

There needs to be much give and take at this stage. Sacrifices need to be made, at the same time it is important to remain objective and work towards a mutually beneficial agreement. During this stage one needs to be creative and think out of the box. A deadlock must be avoided at all costs, if a party becomes stubborn and refuses to change positions, we need to factor this dynamic in, and find alternatives which may be acceptable to them. 

 

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