There are a million pieces of advice for startups when it comes to hiring the right kind of people.
Yet, none of it matters if you aren’t hiring for the right positions to begin with. Before you start bringing employees on board, you may want to ask what roles your new venture needs to fill first.
According to the experts, an entrepreneur’s answer to that question may depend heavily on that entrepreneur’s skill set.
“A founder needs to be self-reflective in terms of where they can buffer out their own strengths,” said James Bort, an assistant professor at the University of Missouri-Columbia’s Trulaske College of Business.
Given the nature of a new enterprise, role ambiguity comes with the territory but Bort believes that a leader should seek out those who have the abilities the boss lacks.
“If you are a software engineer launching an app and you hate accounting, probably an accountant is the first person you should look to hire,” he said.
Jill Hathaway, a senior business development consultant at the Missouri Small Business Development Center at UMKC agrees. She says the right hire is the one who can handle things the CEO can’t.
“A lot of clients I see end up hiring in desperation,” she said. “They hire bodies to fill roles and they are only looking at a resume. The resume may show experience, but it doesn’t show the personality needed for the job they are wanting to hire for.”
She said that a lot of her clients do assessments to understand their own strengths and vulnerabilities as an entrepreneur to get a sense of who they are and what they are passionate about.
Hathaway uses an approach that views skill sets in the context of compass points. North represents those who are action-oriented. South corresponds with empathy. East contemplates visionary ideals while west is analogous to analytics and operations.
She thinks it is good to have a balance on your management team so that conversations can take all views into account.
But, she still stresses one point.
“Every organization has to have a west in place,” she said. “You need an analytical detailed organizational personality.”
Hathaway said it is also common to see one position often percolate to the forefront for new business folks.
“Financials are always the biggest,” she said. “Having that bookkeeper or accountant is normally the initial ask.”
After that, a salesperson might be a main priority. A third choice is often an office manager or an individual to handle administrative tasks.
Joe Roberts, director of the center for innovation at Webster University in St. Louis, identifies three common first hires for technologically focused startups. There is a chief technology officer (CTO) to bring processes and innovation together and a chief financial officer (CFO) to handle everything from investments and margin calculations to product pricing and cost controls. Finally, there is a chief marketing officer (CMO) to look at distribution channels, logistics and customer acquisition.
New CEOs might hire a salesperson as well, but those duties may also end up blended into the CMO’s responsibilities.
Still, those roles could vary widely based on the type of business in question.
“There is no one single recipe that we can say, ‘This is what you have to follow’,” Roberts said. “It really depends on a case-by-case basis.”
Roberts said one of the most common mistakes is hiring too many people too soon. He urges entrepreneurs to think of things in terms of a staged process where a company takes on overhead as it can sustain it. A business plan which outlines the overall blueprint is key.
Roberts also advises CEOs to look at alternatives to hiring. Independent contractors can be used for accounting, legal or other services without committing to the burden of salaries and hefty benefit packages. You may even be able to barter your services for someone else’s.
The important thing to remember is that using someone’s skills doesn’t mean they have to be an employee.
“To be a successful company or entrepreneur, you need access to resources,” Roberts said. “You don’t need to control those resources.”
AbdulRasak Yahaya, co-founder of Open Minds Child Development Center in the Kansas City area, said the center which he and his wife Alicia run now employs over 50 people, but it still relies on independent contractors for some things like marketing, social media work and tax accounting.
Still, he said that one early job was especially important to fill.
“Bringing on an administrative team was vital,” Yahaya said. “In the beginning, my wife was running the center and doing all of the operational things as well so one of our first hires to free us up was a program director to run the center which has allowed my wife to be more of the executive director.”
Open Minds, which the Yahayas created five years ago, started with a staff of just nine teachers. Now, it has three locations and serves more than 250 children.
Yahaya recommends bringing people onboard who see the same vision you do from the start.
“Especially when you are starting out, things and processes are not going to be clear,” he said. “You may not have them all polished but if you have a team that is built on the vision, you can be able to succeed.”
Back in Columbia, Bort agrees. He notes that “intrinsically motivated” people make for the best startup employees due to the uncertainty and the potentially long wait for a profitable outcome.
“Most startups end up failing,” he said, noting that formal roles often subdivide and harden over time. “The ones that end up scaling and growing go through these really dramatic changes in terms of the company’s culture and in terms of the way the management is structured.”
It may also involve painful choices. If you do bring on the wrong person or hire for the wrong position at the wrong time, don’t be afraid to pull off the band-aid and reverse course. Sometimes, you might have to let someone go.
“It is the right decision for the business and probably the right decision for the employee as well,” Bort said.
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