human capital: building high performance teams for your start-up's success
Post on 15-Nov-2014
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DESCRIPTIONEvery start-up encounters speed bumps on the highway of growth. It's the people on your team who will enable your company to power through them. Skills and capabilities must evolve as you grow. You'll need to navigate advisory and other boards, recruit well and have effective team communication and a CEO who sets the stage for the company culture – all just to set you up for that early-stage VC funding. Lance Laking, an experienced successful entrepreneur, talks about how to successfully drive this off-road path. Part of the CIBC Presents Entrepreneurship 101 lecture series. For more information including video, please visit: http://www.marsdd.com/Events/Event-Calendar/Ent101/2009/building-teams-04012009.html
- 1. Human Capital: the importance ofhigh performance teams to start-up success.
2. Outline Context Team diversity & dynamics On hiring Culture Communication style Compensation / incentive programs Challenges Closing comments 3. Definitions Human capital refers to the stock of skills andknowledge embodied in the ability to performlabour so as to produce economic value. High Performance Teams: Teams that arehighly focused on their goals. 4. Context: my background U of Waterloo, Chartered Accountant, Queens U& UWO Executive Development 20+ years in tech companies Co-founded DCI Grew team of ~60, RTO on TSE Country manager HUBER+SUHNER Swiss multi-national, blue chip Team of 125 inside 2,300 globally CEO BTI Systems Raised ~$60M VC over 4 rounds From 12 to 225 employees Revenue from $0 to $40M Currently freelancing: Singletrack Teams of 8 to 88, from IT to Cleantech 5. Contextmy typical playing field: A (very) technical product A technical sales process A long, complex, B2B sales cycle High growth market dynamics Very much a David & Goliath landscape 6. Multi-functional teamsSoftware engineers Product ManagementHardware engineers Marketing HR Sales Quality OperationsManufacturingFinance Administration Investors Customer ServiceManagement Directors 7. Venus & MarsSoftware + Sales & Marketing Engineers+ Research= ??? 8. Motivation & drive:different strokes for different folks Peer recognition coin operated Papers published, patentapplications show me the money Speaking at industry forums Technical challenge 9. But wait a minute:were not that different 1. Everyone needs recognition - the feeling that you are important, thatyou are contributing to the success of the business, and that your effortsare respected and appreciated by fellow employees On budget / On time Cracking a new customer Selling on value Customer testimonials helping solve real problems2. Technical teams want to work on a successful products. Sales teams wantto sell winning products.The common metric is real customers /market share 10. Fostering teamwork Trade notes Technical teams are starved for customer feedback Sales teams are starved to technical innovation / uniqueness Push decisions to where the expertise resides The key linkage between Development, Operations and Sales isProduct marketing / product line management On occasiontake a software geek to a customer, and bring asales puke into the lab 11. Great (Management) teams have:1. Diversity to accommodate wide range of variables2. High AQ (Adversity Quotient = measure of human resiliency)3. Psychological safety (to call out decisions)4. Prior interaction (know each members SWOT)5. Clarity of purpose and direction6. A Plan B 12. On hiring Hire the best talent available dont compromise Attitude over Academic credentials Be careful with big company experience (no job too small attitude) Use Director and investor referrals are great but You can compete with high paying companies For tech plays: hire product management early 13. Shifting Investment in Human Capital Make Sufficient & Well-Timed Investments inSales and MarketingSource: 2009 OCETA SDTC Cleantech Growth & Go-to-Market Report 14. Culture Every company has a culture, every company has politics Perception is reality Work with itMy observations: 1. Culture changes with company lifecycle: The $1M, 5M, 10M, 25M, 50M barriers2. In Canada, were trs multinational: use it to your advantage3. As the leader: be candid Candid = Integrity A culture of candour is a source of sustainable competitive advantage 4. Celebrate wins, De-brief Setbacks, encourage mistakes (but notrepeat mistakes) 15. Communication style Not your `typical` Tech CEO Be OPEN, honest, straightforward Have the tough conversation Stop management happy talk Soft on the people, HARD on the problem Be inclusive: tie in the remote teams Set 3, clear over-arching objectives, & repeat Share the numbers, the good, the bad & the ugly Regular informal updates Semi-annual formal update Have fun!! 16. Compensation & Incentives Fair, transparent and equitable People talk, especially engineers Salaries (the start-up factor) You have to be competitive but not the highest You have to pay a premium for A players but its worth it Challenge, responsibility, recognition and reward trump pure $$$ - that ishow you compete with the big companies 17. Compensation & Incentives Company-wide incentive plan 10% at plan , 20% stretch Metrics must be aggressive, but realistic Combination of financial / market / product milestones Always drive home the capital efficiency message (Cash Flow Positive) Stock Options (ESOP) Still in vogue, but not Holy Grail Fun and other rewards work Create a friendly competition / bragging rights Does not require big bags of $$$ Examples: IP, a goofy award, employee referral bonus 18. Challenges1. The Investor / VC influence The same vested interest or ?? An exit and minimum 20% IRR is natural2. As the company grows up Start-up excuses go away Employment / HR expectations expand Balancing formal (e.g. employee handbook) with informal (just do it) gets harder Act BIG, be small gets harder 19. Closing comments:leveraging human capital for success 1. A high AQ team will handle the inevitable speed bumps2. Set a tone that is open, based on mutual respect, and interactive3. Bring in Organizational Development / HR expertise as early as you can4. Communicate frequently informally and formally5. Tie in customer and market touch wherever and whenever you can6. Structure rewards and incentives to reinforce the behaviour and culture that you are looking for 20. Lance Laking Entrepreneur-in-Residence, Advisory Services, Venture GroupMaRS Discovery District T (613)797-9033 E email@example.com W www.marsdd.com pg 21