Ask any entrepreneur what it costs to make a hiring mistake and you’ll likely be met with a groan and a ‘double eye roll’.  Everyone knows the costs:

  • The recruiting fees
  • The job postings
  • The time you spend interviewing
  • Your turnover rate causing increased UC contribution costs
  • The lawyer’s fees for the employment contract, figuring out how to break the contract, and sometimes additional fees–plus the tax on your time and patience–required to defend yourself against wrongful termination!

Think of these these costs as ‘direct damage’:  a real strain on any entrepreneur’s budget, but not an unexpected cost of doing business.  Bad hires happen.  But wait…..have you considered the ‘collateral damage’?

No hiring decision happens in a vacuum.  You need your team to be whole. You have a missing part.  You seek to fill it in a way that capitalizes on the assets of your existing team members – and makes up for their deficits.  That’s why prudent employers engage search specialists, scour resumes, do 360-degree interviews, personality tests, reference checks, and even credit checks (where allowed by law).  But somehow, bad hires still happen, and when they happen to you, you’re naturally disappointed.  Or worse.  Because if you’ve pegged your hopes and plans on the wrong person, it’s the collateral damage that costs so much more than the hiring failure.

We all pride ourselves on being good judges of people, and we are — but only if we have the whole story, not just a collection of data components.  If you have had the misfortune of more than one or two hires that turned out badly, you may even begin to doubt whether you (or your people) are even capable of hiring successfully. When all the signs–including ‘gut feel’ point to “YES”, and still a new hire turns out to be a dud, the first piece of collateral damage may be your self-confidence as an executive decision-maker.

And then there is the impact of the bad hire on the rest of the team.  Here’s the worst part.  The better your team is, the worse the collateral damage will be.  If you have brought the bad hire in over people who are great performers, you’ll see the decline happening right before your eyes.  And worse, it won’t take long before your they are plotting their next career move.  And they aren’t likely to tell you because really – who is going to challenge the boss on a hiring decision?

Finally there is the adverse impact on present – and future – stakeholders.  News travels fast, especially since the investor/entrepreneur ecosystem has the modern day equivalent of jungle drums and really knows how to play.  You know what I mean: Twitter, LinkedIn, Facebook, and all those f-t-f networking events.  Word gets around when someone (or some team) clearly doesn’t have the right stuff.

So in view of all this, wouldn’t it be great to know how someone will perform on your team – before you hire them?  You can, but only if you are measuring for the right things: not just for individual characteristics – but for behavioral ‘Teaming Characteristics’, which are derived from a person’s Coherence and Role. (To our knowledge, TGI’s Role-Based Assessment is the only way to measure these.)

To minimize some of the collateral damage you have experienced in the past, consider this: there nothing wrong with your decision making.  As an entrepreneur, you have a good sense of how to behave on a team because you know you can’t do it yourself.  You respect people who apply their skills, their experience, and their deep commitment to your vision.  Good decision making assumes good behavior.  Since you are a team player, you’ll tend to expect others to be good team players–and unfortunately, some are not. In fact, some are truly toxic to team play.  So keep on trusting yourself, and keep in mind that there is now a ‘new way to know’.

This piece originally appeared in Innovation DAILY March 29, 2010.

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Sound familiar?

  • Your startup seemed to have essential Angel funding ‘in the bag,’ but for some reason the money never arrives.
  • A strategic alliance took months to establish, and can nearly double your revenue projection, but suddenly your new partner gets bought by a competitor and the deal is off.
  • The new marketing materials are ready just in time for product launch at a major show, but a storm in the Midwest delays the shipment, leaving you empty-handed.

Bad things do happen to good entrepreneurs—all too frequently.  Some manage to recover and others don’t. Is there a way to distinguish the teams that will step up from the teams that give up?

Survival is the first rule of entrepreneurial life, and when dealing with an unexpected calamity, nothing keeps a team in play more effectively than people working really well together.  This may mean ranting together (not at each other) for a few minutes, perhaps also grieving together, and then—without delay—getting down to the business of refocusing and recovering.  Histrionics, finger-pointing, or withdrawing instead of reaching out are not characteristic of good teamwork. They are characteristic of failure.

Good teams know that no one person can examine all the possibilities; that two heads are better than one; three better than two; one for all and all for one!  Spending time and energy on leadership struggles, instead of pulling together, has run more than one ship aground.   The strongest entrepreneurial teams incorporate and encourage different communication, action, and problem solving styles: one person thinking of the far-off future; another handling tasks of immediate urgency, perhaps a third person plotting a strategic alternative, and all ready to fire up and forge ahead.

Some great teams may seem to ‘just happen’, but they can also be built—if you have the ability to predict how people will actually behave when working with other people to benefit their group, overcome a challenge, or achieve a common goal.  The measurable qualities of teamwork are Role, Coherence (on a scale ranging from Diffuse to Coherent to Rigid), and Teaming Characteristics.

Any team members who are outside the acceptable range of Coherence (Diffuse or Rigid) will sap team synergy, exacerbate internal conflict, and limit productivity.  In the midst of a crisis, that’s bad news. The good news is it’s possible to tip the scales in favor of survival.  My favorite example is the entrepreneurial team that got rid of a rigid marketing person and a diffuse sales person, and saw their KPIs take off on a classic hockey-stick  trajectory!

So what do you do when something bad happens?  When you have a Coherent team of players with diverse Roles and great Teaming Characteristics, you never have to ask.  You just do it.

(This post originally appeared in Innovation DAILY, February 18, 2010.)

No New Year’s resolutions, no preaching, no ‘rules’ – just some ideas to ponder.

1. You can’t lead the team if you’re not on it.

Soccer star Mia Hamm said, “I am a member of a team, and I rely on the team, I defer to it and sacrifice for it, because the team, not the individual, is the ultimate champion.”  True in any sport and especially true on the entrepreneurial playing field. The leader must be as much in the game as the players.

2. Identify and develop undervalued players.

Think Billy Beane’s Oakland A’s (read Moneyball if you missed it.)  ‘Talent’ is not just about skill and experience – it’s about teaming. ‘Scouting’ the resumes, interviews, and LinkedIn pages will give you lots of data about the individual. But in order to predict business success – no matter what the mission of the team – the right metrics are Coherence, Role, and Teaming Characteristics.

3. Know the difference between competition and coopetition – and when to use each.

If there were no Coopetition, there would be no draft, no free agency, and no player trades. And whether you love or hate the outcomes, Coopetition adds variety and produces better on-field Competition.  But when you ‘team’ with your competitors in hopes of mutual benefit, you had better stay on the high road. In this highly networked world, playing dirty tricks or trashing the competition is not just bad for business – it can have lethal impact on future opportunities.

Cheers to 2010 – the year that the winners’ circle starts spinning again!

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