Leading Employees in a Growing Startup
By Jacob Schpok, Vice President of Entrepreneurial Services & Entrepreneur-in-Residence
Success can kill a startup faster than anything, especially when the founder is not comfortable delegating the growing list of tasks that need to be done. Too often, founders find product-market fit and start to grow only to lose momentum due to an under-utilized and unmotivated staff. Founders are always ready to talk about the product section of their business model canvas, but some overlook their most important resource: their team.
Below are six tips for first-time founders when they’re transitioning from a team of one or two, to a team of many. While nothing can replace experience, applying these suggestions may reduce the learning curve.
Tip #1: Consistently get employees excited about the company vision. It’s easy for senior leaders of a startup to forget how rarely mid-level managers and frontline employees are exposed to conversations around the vision of the company. While senior leaders are consistently pitching the vision to investors and strategic partners, most employees won’t experience these conversations. Making it a point to regularly restate to employees, and essentially resell, where the company is going and the impact it’s making is an easy, yet tremendously impactful way to reactivate those who may be losing motivation or mentally disconnecting from their job.
Tip #2: Employees should know exactly how they contribute to the company vision. I suspect most employees can articulate their job responsibilities, but how many have perspective on how exactly those responsibilities influence the company’s long-term goals? Every employee should know they are engaged in mission-critical work towards the success of the company. This goes beyond simply telling employees they are important. There needs to be an intentional conversation during the hiring and performance review process where employees are challenged to think through their roles and how they directly impact the organization. Managers should also be able to communicate the same information about every direct report.
Tip #3: Employees should know what responsibilities should be mastered and how they can grow to provide additional value. I’ll be the first to admit that establishing KPIs and annual performance plans for each employee in a startup can feel like an exercise in futility. Startups still locking in their product-market fit and sales strategy will struggle with establishing realistic employee-level goals. While I completely believe every employee should have KPIs that align with the company’s financial projections, I think it’s dangerous to assume those KPIs will drive productivity. We all know that sometimes environmental factors can make KPIs unrealistic, leaving employees disenfranchised. We also know the opposite can occur where environmental factors can cause KPIs to become significantly easier to hit and employees are left with nothing to do. Crystalizing responsibilities, communicating how they could be mastered, and offering other ideas on how each employee can help the organization (without overlooking primary responsibilities) is a great way to ensure employees stay productive and don’t find themselves feeling undervalued.
Tip #4: Employees should have a long-term employment plan. It’s been my experience that nothing motivates employees to create efficiencies and overperform like knowing they are working towards a goal that intrinsically motivates them. This goal could range from moving up in the organization’s hierarchy to gaining increased work-life flexibility. Long-term employment goals present managers with a terrific opportunity to not only increase output and morale, but also serves as a platform to reinforce the employees’ direct impact towards the company vision, challenging them to independently think how their aspirations can align with the company’s. Daniel Pink covers this topic well in his TED Talk on “The Puzzle of Motivation”.
Tip #5: Beware of the Peter Principle. The Peter Principle states that “people in a hierarchy tend to rise to their level of incompetence: an employee is promoted based on their success in previous jobs until they reach a level at which they are no longer competent, as skills in one job do not necessarily translate to another.” For employees eager to move up within the company, I highly encourage giving them the space to learn and develop the skills required to be promoted well before a promotion is given. If time is of the essence and a promotion needs to occur before an employee is well equipped to take on the new responsibilities, look for mentors and coaches to help the employee be successful. Make sure time is being set aside for professional development and it’s not just getting lip service. Don’t leave it to chance that employees will be self-actualized enough to know if they’re successful in their new position (refer to Tip #2).
Tip #6: Speaking of professional development, don’t stop developing yourself. When I was 28, I went from managing and leading one business professional to a team of 55. While I made plenty of mistakes in this “trial by fire”, the most valuable thing I did was find leaders I admired and asked them to mentor me. Start there – find mentors! It’s never too early or too late. Be candid with them about the problems you’re facing and challenge them for advice. Expect homework. Read books on leadership and ask them their opinions on points that resonate with you. In essence, build a relationship. A mentoring relationship allows you to gain insights from those who have experience, which can be a powerful and long-lasting way to further develop your skills.
Best of luck in your journey as an entrepreneur and leader! Elevate Ventures is in your corner and here to help!