Avoid the Costly Mistake of Assembling the Wrong Leadership Team

January 19, 2021 6 min read

Opinions expressed by Entrepreneur contributors are their own.

In the early days of building a start-up, there are several things that people tell you to focus your time and attention on. You need to have a strong business plan, an addressable market, an understanding of customer personas, product-market fit, etc. And while all of these things are key aspects of ensuring the short and long-term success of a start-up, there’s a less-discussed aspect that holds just as much, if not more, bearing on whether your business is going to be a success.

We know that people make up the heart of any business, and over the last few years, particularly in tech, there’s been a strong focus on building a strong, people-focused culture. Yet, what many start-up CEOs fail to speak about is the impact of leadership teams on driving this culture. More specifically, they fail to discuss the importance of making the transition from a founder-led leadership team to a leadership team made up of a diverse mix of seasoned senior professionals, all while maintaining the same values and culture that they started with.

Transitioning to a strong leadership team made up of company veterans and newer, seasoned professionals can be difficult. I learned this the hard way while scaling my own business, but I also learned some key lessons that have helped me build the strong and dynamic senior team I have today.

Related: Build Your Management Team

Lesson 1: Hire people who truly align with the culture of your organization

After raising a round of Series C funding, I began to think more critically about the leadership team I had in place. I thought it was the right time to bring in a seasoned professional to help the founding leadership team run the company. I focused on interviewing and hiring GMs and VPs from large software companies, as I thought they would be the best people to help us build and grow the business.

It turns out my thinking was wrong. Despite their vast experience and knowledge of industry-leading systems and management processes, many of these individuals had never worked in a start-up environment before, so they struggled to thrive. The requirement of building something from scratch and scaling it was too steep of a task. Many of them had spent their careers in environments where processes were already in place, and they only needed to be scaled or improved.

There is a saying by Reid Hoffman that best sums up the situation – “entrepreneurs have to assemble the place while jumping off the cliff at the same time.” Doing this well requires a very specific skill set. Someone who can be at the 50,000 ft view strategically while also having their feet on the ground to do the work.

After making a few wrong hires that cost me millions of dollars, literally, I learned a key lesson; the skill set of a leadership team is only half the battle. The other is attitude, because attitude ensures that someone is the right fit for your culture. To survive a start-up environment, you need people who have an entrepreneurial mindset—people who are willing to embrace change, are adaptable, willing to learn and grow, and treat your business like their own.

This mindset has completely changed my approach to hiring. I now look at entrepreneurial experience first and skill set second. This entrepreneurial experience can come in different forms; it can be playing a competitive sport, starting a non-for-profit venture or creating a new business line for their existing company. What’s important is finding a person who is willing to try something new, willing to fail, have setbacks and still forge ahead. The right person with the right attitude can be a huge value add to your business and culture.

Lesson 2: Leverage the strengths of your founding leadership team and your new leadership members

Start-ups are often built by a small, close-knit group of leaders who work closely together over several years to build the business. When it’s time to start bringing in seasoned professionals to join this team, it’s important to make the integration of these two camps a top priority. Both of these groups can contribute to the success of the business in very different ways.

Founding teams are adept at building a new venture, withstanding many uncertainties, taking risks, and charging ahead. Incoming seasoned professionals have expertise in scaling an operation and building the right processes and teams to take the company to another level. The key to integrating the two teams is to ensure that both the “old” and “new” camps understand each other’s strengths and how those strengths can work together.

In my experience, I found that the simplest way to integrate the teams is to rally them around a single mission and vision. At the end of the day, it’s the founder’s responsibility to ensure that all members of the senior leadership team understand the vision, believe in the mission and can clearly see the active role they play in making those things a success. You need to be strategic in how you approach leadership as a team. I often paired new and old team members together when it came to working on company initiatives to see each other’s differing points of view, learn from their experiences and ultimately build trust with one another.

I also encouraged members of both camps to actively find ways to lean on each other’s expertise. You’re going to come across individuals who are great innovators, others who are fantastic operators and some who are good analysts. Make it a priority to have a good representation of skills on a single project or initiative. This ensures that the senior team members are all playing to their individual strengths and understand the value of the different skill sets being brought to the table.

When you’re running a global organization, assembling and managing the right leadership team can be an especially daunting task. The truth is, there are a lot of differences from East to West. However, amidst all of these differences is the single desire to achieve one goal, and that goal is to do meaningful work that has an impact and makes us feel proud. If you can harness this desire in a leadership team, you’ll be able to grow quickly and strategically in any environment.

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