chapter 6 venture team building and organizational plan

8/12/2019 Chapter 6 Venture Team Building and Organizational Plan

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Chapter 6

Venture Team Building and Organizational

Plan

1Prof. Dev B. Koli @ SIBM; Mumbai, 2014


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Learning Objectives

To understand the importance of venture team in the success

of a venture.

To understand the meaning and implication of effective teammanagement.

To know about the precautions that need to be taken for team

building for venture and how to take care of those factors.

To learn about the factors that result in lack of understanding

amongst the co-founders of a venture.

Contd2Prof. Dev B. Koli @ SIBM; Mumbai, 2014


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Learning Objectives

To learn about common attributes of an effective venture

team.

To understand the process of developing a venture team.

To learn about importance of managing people to build

effective teams.

To learn about different types of organizational structures and

their relevance to different types of ventures during different

stages of growth. To learn about importance of organizational

structure, and systems and procedures for managing a venture.3Prof. Dev B. Koli @ SIBM; Mumbai, 2014


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Importance of Effective Team for Venture

Success

More than an idea what matters, is the effective, harmonioustrustworthy, competent team that leads to success in anentrepreneurial venture.

Entrepreneurial team with an entrepreneurial leader andquality of the team is a key ingredient in the higher potentialventure.

Founding members of a venture need to have a clear goal andworthwhile idea.

Although each team member has a unique role andcontribution but it needs to be synergized with the role of theothers.

Contd



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Importance of Effective Team for Venture

Success

Building a professionally backed-up winning team goes a long way inachieving dynamism and success.

Building high potential ventures without the backing of a strong and

cohesive team is not possible.

Team building process starts with objective and honest assessment ofthe strengths and weaknesses of team members to identify the gapsto be filled in by inducting new people in the team as employees or

co-founders.

Core team should consist of complementary competencies andknowledge.



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Effective Management TeamKey to

Venture Success

Board of

Directors

Chief Executive

Officer

Effective

Management Team

High Growth

Successful

Ventures

Banks, Seed Funders, Venture Capitalists, Financial

Institutions



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Business Plan Success Depend Upon

Committed Team

Genuinely Committed

Team Members

Having Diversified

Competencies, Skillsand Other Resources Business Plan Success

It is important to realize that business of business is business and therefore

any money, time and effort put into it has to be viewed on business lines

rather than charity.



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Reasons for Business Failures

Lack of Understanding Amongst Co-founders arises on Account of Lack orNo Documentation

Goals/ Objectives Participation

Role andResponsib-

ilities

Sharing Loss/ GainProcess to Deal

with Differences



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Common Attributes of Effective Teams

Attributes ofEffective Teams

Clear Expectationand Context

Commitment toPurpose and Values

Competence

Communication,Coordination and

Collaboration

CreativeInnovation

ConsequencesSharing

Control

Cultural Change

Teams outperform individuals, especially when performance requires

multiple skills, judgments, and experiences.

Jon R Katzenbach



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Venture Team Development

Need for Partners

Where to find partners?

How to choose the best one(s)?

How to convince them to become a part of the core team?

Issues to be Resolved for Inducting Partners



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People ManagementKey to Venture

Success

Principles of

Managing

People

Employees are fulcrum of business

Hire people with adaptability and attitude

Inspire, motivate and enable them to deliver

excellence

Be transparent and open with your employees

Respect and treat employees as equals

Encourage employees to take initiative

Remove employees, as and when becomes

necessary



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Tips for Employees Management

Guru Guide to Entrepreneurship by Boyett and Boyett based on

the advice from leading entrepreneurs has proposed three

ways to treat employees as equals:

Get rid of executive limos and executive parking spaces.

Eliminate executive dining rooms, executive bathrooms, and

exclusive executive offices.

Dont employ receptionists, executive secretaries, personal

assistants, or other support staff.



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Organizational Structure

People

Systems and

ProcessesStructure

Business Environment

Growth Plans of the Company



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Nature of Organizational Structure

Organization

Small

Business

Large

Companies

Simple, Lean, Flexible


Formal, Large and Complex




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Flat OrganizationsAdvantages

Open communication between employees

Close relationships with each other

Less bureaucratic

Quick decision making

Better to build teams

Less cost on account of higher productivity up to a particular point

of production

Highly innovative



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Designing Organizational Structure

ReportingRelationships

OperationalRelationships

Arrangements of

Jobs or Group ofJobs

FunctionalRelationships

Achievement of Organizational Goals in Most Effective

and Efficient Manner



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Requirements of Effective Organizational

Structure

Identifying specific vital tasks/functions.

Identifying right people to perform those functions.

Explaining it to each and every employee, what his role will be.

Organization should develop objective criteria to measure the

performance of its employees without being biased or unfair to

any employee.

No concentration of power in the hands of a few executives, as

this may lead to grouping and reduced quality output.

To have optimum number of employees in each department.



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Factors to be Considered by Small Business Owners

for Organizational Structure

Relative strengths and weaknesses of various organizationalforms.

Legal advantages and disadvantages of organizational structure

options.

Advantages and drawbacks of departmentalization options.

Likely growth patterns of the company.

Reporting relationships that are currently in place.

Contd18Prof. Dev B. Koli @ SIBM; Mumbai, 2014


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Factors to be Considered by Small Business Owners

for Organizational Structure

Reporting and authority relationships that you hope will beimplemented in the future.

Optimum ratios of supervisors/managers to subordinates.

Suitable level of autonomy/empowerment to be granted to

employees at various levels of the organization (while still

recognizing individual capacities for independent work).

Structures that will produce greatest worker satisfaction.

Structures that will produce optimum operational efficiency.19Prof. Dev B. Koli @ SIBM; Mumbai, 2014


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Types of Organizational Structure

Informal structurehas lot of flexibility and openness, and is most suitable

for startup ventures having few people who are highly committed and selfdirected to the organization.

Functional organizational structure is suitable when the organization is

small in terms of number of employees as well as operations, geographically

centralized, and provides few goods and services.

Divisional structure helps in overcoming problems associated with relativelylarge size of employees and operations, geographically dispersed activity,

and company starts delivering wide range of goods/services to the

customers.

Matrix structure helps in grouping employees by both function and product.

It attempts to derive the advantage of both separate structures.



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Advantages of Systems and Procedures

Systems and ProceduresAdvantages

Undertakes VariousTasks with

Consistency

Optimum ResourceUtilization

Compliance toAccounting, Legal

and OtherStipulations

Backed-up by Appropriate Manuals and Forms


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