Some thoughts on building your team

I was recently advising a friend of mine who wanted to expand his team and hire some senior executives, and it occured to me that others could benefit from some of my thoughts on recruiting.  As you know, hiring is a critical component in the success of any company.  People and their ability to execute are what separates the winners from the losers in any industry.  Hiring the wrong person, particularly in an early stage company, can cost you dearly.  On the contrary, hiring the right person can make a huge positive impact creating significant leverage through what I call the A-Player domino effect.  So here are some of my random thoughts on hiring new executives.  I tried to make this as logical and short as possible - some of the thoughts below can clearly be expanded into longer posts.

1. Build a target profile: Put together a specification of the role, responsibilities, required experience, and intangible qualities you are looking for in a senior hire.  Share the specs with your board for additional feedback to make sure everyone is on the same page with respect to the person needed and the major goals and objectives.  Many times, the specification itself can highlight bigger issues about company direction if everyone is not communicating and on the same page.  Does a board member want to change the goals for next year?  Is everyone aligned with that change?  Understanding who to hire and what their goals are incredibly important - hiring a person without having a spec will result in failure nine out of ten times.

2. With the specification in hand, put together a target list of potential companies where you can find this executive.  The ideal companies are in the bullseye and others will be in concentric circles one or two removed from the center.  For example, if you have a network security startup, the obvious players will be other security companies that sell similar products at similar price points with a similar distribution channel.  One concentric circle out from the bullseye could include networking companies that have a similar business model and distribution channel.  From an experience perspective, the perfect candidate will be someone who has had a VP role (if you are looking for a VP) and worked at other large brand name companies as well as been successful at earlier stage entities.  Like in darts, it is not easy to get a bullseye (unless you spend too much time in the local pub), so you need to think of all of the tradeoffs that must be made in terms of the characteristics of a new hire which will include qualities like leadership, requisite experience, and domain knowledge.  In general and depending on the role, I tend to prefer leadership and experience over domain knowledge and hungry, up and comers over rich and happy.

3. Begin the search - look in your own network - trusted people you or your board have worked with before always come first as long as they meet the spec.  Putting a spec together eliminates the need to do favors and hire friends.  If you can't find someone in your network, bringing in a knowledgeable executive recruiter can help.  The right firm will always help you find the person not necessarily looking for an opportunity - many times that is the person you want for your company.  When picking a search firm, I prefer boutiques or small, highly focused shops which tend to have the partners doing the work and making the initial calls to prospects.  Your executive recruiter is an extension of your company and must be able to give a great pitch to high level prospects.  A recruiter who gets it and can properly sell the story to prospective hires will truly help the company.

5. Make hiring a priority - You have to stay on top of the search.  If you are using a recruiter, I suggest having weekly status calls in the calendar with members of the search team, typically one or two from the company and one or two board members.  Regardless, if you want to bring high caliber talent in quickly, you have to make hiring a priority.  The more time you put into it, the more you will get out of it.  Whatever you do, do not slowroll the process and leave people hanging.  Change a few meetings, etc. if need be, to get in front of the right person sooner rather than later.

6. Reviewing resumes - Resumes are not everything but what I look for is a person's story.  Do they have a history of demonstrated success?  Have they worked at other blue-chip startups or well known companies and been a top player?  Were they responsible for delivering meaningful results and contributing to the success of the company?  These are just some of the things that cross my mind when reviewing resumes.  A history of working at companies that repeatedly failed will certainly worry me.

6. Interviews - It is always good to have a proper blend of selling and interviewing in your first meeting.  Many times you will know by a person's resume whether they have some of the experience needed to do the job.  Obviously you will want to dig into specific examples of how the prospect overcame challenges, drove new initiatives, led and hired a team, etc., but always leave some time to do some selling on the opportunity.  Assuming you like the prospect, you should get another set of eyes like some of your VCs to meet with the candidate and interview him.  As you meet a number of prospects, chemistry becomes an important determining factor in hiring.  The superstar on paper may not always be the best fit for the team if the chemistry is not there.  I always like to use the Detroit Piston/LA Laker analogy.  Both teams had consummate professionals playing at the highest level of basketball but the team with all of the superstars did not come out on top - there was no chemistry.  As you move a candidate further in the process, doing backchannel references are the most important ones you can do.  That means you need to call some of the other VCs and execs at prior companies who are not on the candidate's reference list.  You can learn alot about a person from these checks.  I have passed on a number of candidates based on some negative backchannel references.

7. Close them - now you have the right person, get the deal closed as quickly as possible because as I have said before the longer it takes to close a deal, the more chances it has to fail.

Share and Enjoy:
  • Print
  • Digg
  • StumbleUpon
  • del.icio.us
  • Facebook
  • Yahoo! Buzz
  • Twitter
  • Google Bookmarks

Post Author

This post was written by who has written 358 posts on BeyondVC.

14 Responses to “Some thoughts on building your team”

  1. Richard Rodger Dec 9, 2004 at 5:10 am #

    Are we not allowed to have worked for just a few failures as well? Surely we can learn from our mistakes!

    Good advice though – the hiring process scares me.

  2. Ed Sim Dec 9, 2004 at 7:11 am #

    Of course, failures are ok since many learn from their mistakes. However, since I am looking for patterns in resumes, one of repeated failures definitely concerns me.

  3. Paul McManus Dec 9, 2004 at 9:30 am #

    Ed, Excellent summary that reflects my own experiences as well.

    I use a quick and easy to remember checklist, I call it the “5 P’s”, when scubbing down candidates for my portfolio.

    Pedigree
    Position
    Performance
    Professional Competencies
    Personality

    Responding to the last post:

    VCs know that failure is a part of the game and provides important lessons. Therefore, it’s important to separate the person’s performance from the situation and understand the difference between cause and affect. That said, more than one or two failed companies on a person’s resume makes me question their judgement and quality of the due diligence performed when choosing the companies they’ve worked for.

    One last comment, it should be obvious that a candidagte that keeps repeating the same mistakes over and over is not one I would want on my team.

    One man’s opinion…

  4. John Bartram Dec 11, 2004 at 8:16 am #

    “…look in your own network” – quite right. Personal knowledge and recommendation beats paperwork any day. I’ve hired some ‘top’ people whom I didn’t know personally and been sorely disappointed. On the other hand, those I hired through my network have always delivered.

  5. Steve Shu Dec 13, 2004 at 11:54 am #

    Agree on the comments on “looking in your own network”. But I wonder if this reflects more on 1) the efficiency of qualifying candidates (and the company needs) in the search process or 2) quality gaps and logistics in the backend screening, selection, interviewing, and matching process itself. Granted the two ends of the process are related (e.g., a poor front-end process affects the backend), but for me it seems like there is a lot of heavy lifting on the backend.

    -Steve

  6. j Dec 16, 2004 at 1:00 pm #

    I was wondering if any of use any of the ideas from the Gallup Corporation’s management theory as discussed in “First, Break all the Rules,” and “Now, Discover your Strengths.”

    Evaulating these talent or temperament themes has allowed me to more quickley and effectively structure a position around a team member’s basic personality and to find other team member’s that compliment one another in terms of personality strengths.

  7. Paul McManus Dec 23, 2004 at 9:15 am #

    J,

    Thanks for the pointers. Have thumbed through both at bookstores several times over the last few months, but have chosen others titles instead. Currently reading Tom Peter’s ReImagine! and Kevin Roberts Lovemarks. Sounds like these two suggestions would make for good reading over the Christmas break. Hope Santa’s listening. ;)

    What were your two or three top takesaways from each? Have any others out there found them useful?

    /Paul

  8. George Jan 14, 2005 at 1:55 am #

    We had this VP Technology,who while he was with us was significantly poor on execution. The quality of the people he hired were low. Service levels were abysmal. Every alternate day there would be some problem. However the gentleman got into a much bigger and better company at a fairly responsible position. I am wondering did they not figure that out in the interview. I met him for the first time and I figured that out in the first half hour of our meeting, that this would not be a guy that I wanted to work with. Now the interesting part is that he has been there for a little over six months, and he is doing well. They have increased his responsibilities and he is on of their committees. I am wondering: is it the person or is it the organization which matters?

  9. Ed Sim Jan 15, 2005 at 9:06 am #

    People are wired differently. Some can work better in larger organizations with a little more bureaucracy and more middle management while others thrive in an entrepreneurial environment. For an early stage company, the trick is finding someone that can work in a thriving environment while at the same time have enough process or layer process as the organization and company grows. This VP Eng hire you are talking about sounds like he fared better in a more mature environment with more infrastructure

  10. Chris Hong Jan 17, 2005 at 2:04 am #

    Ed, good points which is true even in the opposite side of the world.
    1. Personal value and team culture. I had a client who had an executive who interviewed well, was hired but couldn’t execute despite support from the board. The client’s organization missed their targets and I was brought in. The exit interview and talking with others revealed incompatibility between the executive’s personal value and the team culture. The client kept the team, and fired the executive. The team’s morale and trust in the firm’s leadership took more time to rebuild/earned. Result: missed revenue opportunities while things were being straightened out.
    2. Structure, Structure, Structure. In my previous life as a corporate executive, we assembled a A-list team who is committed and set up a new division for a new innovation range of products. The products were developed on time and on budget, but problems started soon after it went to market. After several wrenching weeks, root causes were identified – the operation structure was wrong. Lessons I took from this. Align structure and compensation tightly else even a A-list team will wither.

  11. madalene Jul 11, 2005 at 8:06 am #

    We had this VP Technology,who while he was with us was significantly poor on execution. The quality of the people he hired were low. Service levels were abysmal. Every alternate day there would be some problem. However the gentleman got into a much bigger and better company at a fairly responsible position. I am wondering did they not figure that out in the interview

  12. James Durbin Nov 22, 2005 at 4:44 pm #

    1) Those who plan on utilizing their own network would benefit from remembering that networks do not spring into existence, but are nurtured over time.

    2) The small boutique firms was an excellent point – these firms typically pay up to 50% of the fee to the recruiter actually performing the search and the close. Larger companies pay 10% to 15% of fee to the recruiter performing the search. Who do you think is going to work on that hard to find search with more intensity?

Trackbacks/Pingbacks

  1. Business Opportunities Weblog - Dec 9, 2004

    Building Your Team Right

    Ed Sim: “As you know, hiring is a critical component in the success of any company. People and their ability to execute are what separates the winners from the losers in any industry. Hiring the wrong person, particularly in an…

  2. Regional: New York - Dec 11, 2004

    The A-player domino effect

    New York VC Ed Sim shares a handful of tips on putting together a top-notch executive team at a young start-up company. This doesn’t always mean hiring the “best” or the “brightest” in the industry — but it does mean…

Leave a Reply