As a startup founder, you need to manage pretty much the entire startup.
There are many things that fall within your responsibility and task sheet on a daily basis as a CEO or founder, with the most important being micro-management. With so many things to do and so much on your plate, you need to prioritize your tasks as a CEO or founder to ensure alignment and productivity.
Three areas can serve as starting points for your management review, each with a category, score (excellent or tolerable), primary constraints, and any necessary next steps:
- Go-To-Market (GTM). Your GTM strategy explains to your company and investors how you plan to use your resources to grow your business.
- Product – This could include development schedule, bugs, documentation, training materials and UX and UI.
- People – This includes not only your employees, but also your family members, advisors, mentors, and others who will help you along your journey.
As a founder who has taken the company through Seed or Series A, you should know your Go-To-Market strategy and product needs quite well.
One of the earliest decisions post-funding is hiring executives, using the top applicant tracking system software – ones that already have good experience in managing individuals. The type of your business and the sector in which you work will determine the best type of executive the company requires.
To build demand and supply, a Chief Revenue Officer may be necessary if you are building a marketplace startup. If mission-critical infrastructure is required, such as real-time support for products like Uber or Lyft, it’s important to have a CTO or a VP of Engineering at the top of the executive ranks early in the company’s life.
If you are a new founder and have recently hired some key executives, how can you effectively manage them? Management of an executive is quite different from managing most other team members.
Executives are expected to be strategic risk-takers. They should identify and implement 2-3 major initiatives each year that have enough impact to influence the company’s direction. This contrasts with non-executives who should be focused on tactical execution.
It is best to explain it using a simple analogy. Executives are responsible for hitting home runs. The job of an individual contributor is to hit base runs. HR management of an executive requires a special approach because of the differences in expectations.
However, make sure the risks do not give rise to unreasonable legal liabilities; for example – using someone’s intellectual property without permission or choosing to not trademark your brand name even though you have spent considerable efforts in improving your business branding!
Management of Executives
Before we get too deep into this segment, let us talk about what you should look for when hiring executives.
The most important rule is to not look for consensus candidates.
Hiring and Managing Consensus vs Non-Consensus Executives
You don’t want to hire someone who is completely agreeable with everyone and willing to follow the same path as everyone else. If there is no consensus on the hiring decision, you are more likely to choose a great executive.
A consensus hire is someone everyone likes, who is easy to work with, and who is low-risk. We all enjoy working with people that we like and who behave well.
An agreeable executive will not take the necessary risks to make a difference. You should instead look for non-consensus views because they will be willing to take the risks that may change the outcome of your business.
You can either love or hate the non-consensus executive. However note that they are not bad people, nor do they have any integrity.
Their approach to life is risk-seeking, which can cause discomfort. Some of their ideas and suggestions may not be appealing to you – some of their ideas and suggestions you may not like – in fact, some, you really dislike. However, it is these executives that are willing to take calculated risks and go against the grain when necessary.
An essential HR tip is to always hire someone who swings for the fence. Although they may not be correct every time, even if they are right about two things, these shall be huge and could result in a significant improvement in the startup’s performance.
Because they aren’t willing to take on enough risk, perfectly agreeable consensus executives are less likely to not fetch you the same extraordinary benefits as they are not the homerun hitters that you need and should seek.
If you have hired a non-consensus executive who is prone to taking intelligent risks, how can you bring them on board and make sure they succeed? I prefer to use a simple template to help the executive describe their operating plan.
30 Day Management Exercise to Get Your Executives to Create a Plan of Action
The executive should first do their 30-day review. This allows them to reach out to all levels of the organization and learn as much as possible. After completing the 30 day of the exercise wherein they can reach out to everybody and anybody, your executives should then come back to you, the founder or CEO and tell you – “Here is my plan of action.”
They should come up with a strategy with 2-3 key initiatives. They may have to make changes in their headcount or hire and / or fire people. They might need to budget for the tools and services they can rely on, such as consultants or agencies.
A non-negotiable tip on hiring is that the execs should be asked to outline the types of initiatives the company should take, the resources required to do them, and the expected outcomes if they succeed. They must also justify why these initiatives are important.
They will use that vision document to work with their teams and create a roadmap for achieving that strategy.
Your job as CEO is to communicate the vision and mission of the company so that you can guide your employees in the right direction. The executive should know what the business will look like in two to three years. The executive should be able put together their strategy as long as they have a clear vision and are clear about the company’s overall direction.
The 2- or 3-page memo forces the executive to achieve clarity through tight editing of their proposals. After they have produced the memo, you now have a tool that can be used.
To help with the overall financial and operational plan, the flagpole can contain the goals, metrics and requests for resources.
If the VP Marketing estimates that she will require $300,000.00 in annual marketing budget, two full-time employees, and $50k to purchase marketing tools, this information will be included in the financial plan.
An executive will have a clear strategy and can share it with their team. They can also work together to create the roadmap for executing the strategy.
You are the CEO who is responsible for managing executive teams. This performance plan has to be mutually agreed upon. The executive has outlined what he/she intends to accomplish over the next six-12 months.
This gives you a guideline for how to assess the executive’s performance. This is essentially a mutually agreed upon performance evaluation plan. This is possible with all executives in your company, whether you are a founder or the CEO.
For annual planning purposes, you meet once per year. You can review and edit your executive team’s plans together, such as product, marketing, finance, and others. This will allow you to see what each executive is focusing on and how it relates to the overall business plan.
With that data, the finance head can then create a financial plan that includes the cost and headcount needs for all functions.
You can have a company that meets quarterly, but it is important to think big enough and long enough to allow for the possibility. This is important because startup things are constantly changing.
You won’t be able to see the big picture if your time frame is too small.
Executive hiring can go wrong in several ways. First, the executive doesn’t create a plan. Instead, she jumps into a bunch of initiatives and has no plan. Such executives do 5-10 things simultaneously and place more emphasis on busy work than focusing on the most important points of leverage for their company.
The best tip for hiring is to not do that as the organization gets confused and frustrated by this lack of clarity. They have difficulty understanding why certain projects are being undertaken and how they fit together with the overall direction of the company. They are also curious about the person in charge.
Another failure mode is an agreeable hire who isn’t willing or able to take on risks. This will be obvious when you ask the executive for their strategy memo. It is possible that some of the proposed initiatives are too small. There is not enough risk being taken, and the stated initiatives have a very limited impact.
It is sometimes helpful to have executive candidates write this type of strategy memo during the interview process. To assess their ability to think through execution nuance and their risk-seeking abilities, you can give them background information about the company.
Executives are expected to be focused on strategic risk. This contrasts with non-executives who are primarily focused on tactical execution. Look for non-consensus candidates when you are looking to hire executives. Because they aren’t willing to take enough risk, perfectly agreeable consensus executives are less likely not to reap the same extraordinary benefits.
Executives are often unable to create a plan or jump into an array of projects without a plan. This strategy memo will help your executives to succinctly explain their vision, operating plans, metrics, roadmap, and resourcing requirements.
To monitor progress and to ensure that the plan is being followed, you should regularly check in with your executive. All division executives should produce their plans simultaneously. As a group, you can review and edit the plans together to get a better understanding of what each executive is focusing on and how it relates to the overall business plan.
People Management in General
Once a startup is able to generate enough capital ($15-20M at the bank), it will eventually reach a stage in its journey when they must hire and onboard their first executives, and build an executive staff.
This is usually when they have millions of dollars of capital. The founder must then delegate the responsibilities to functional specialists such as a vice president of product, engineering, operations, sales, etc.
Usually, this is where your responsibility as a founder in executive HR management ends but it is better to be assured of the following considerations:
- Who will be responsible for these “operational” requirements as they increase?
- Importance of culture in your company’s growth?
- Is there a documented process for interviewing candidates clear to everyone?
- Do you plan to approve each hire?
- Are you ready to quickly move on to people who aren’t working well?
- Are you able to hire for tasks that are not within your domain of expertise?
Once you are confident with the answers, then you should proceed with the hire and if possible, delegate the same to a like-minded individual as yours.
That’s all.
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Author Bio
Adhip Ray is a startup consultant, the founder of a startup consultancy WinSavvy and an advisor at PatentPC. Although he hails from a finance and legal background with twin specializations on intellectual property rights and corporate law, he has been a marketing geek since 2015! He is also an author at HubSpot, Addicted2Success, StartupNation and several other business publications.
