“The strength of the team is each individual member. The strength of each member is the team.” – Phil Jackson
In the dynamic world of startups, every team member is a jack-of-all-trades. Unlike larger corporations that thrive on specialization, startups demand versatile individuals who can wear multiple hats. Specialization might work for established giants, but for startups, it could mean inflated costs, communication barriers, and increased risks.
“Efficiency is doing things right. Effectiveness is doing the right things.” – Peter Drucker
Diminishing returns is a well-acknowledged principle. This holds particularly true when more layers of employees are introduced to a project. This phenomenon is even more prominent in knowledge-intensive fields like software engineering, where additional workforce doesn’t necessarily translate to higher productivity. (Read “The Mythical Man-Month”). In small and early-stage companies, each employee shoulders a broader spectrum of responsibilities, often encompassing what several roles would cover in a larger setup.
“Innovation distinguishes between a leader and a follower.” – Steve Jobs
Hence, selecting employees for startups assumes even greater significance. With limited personnel, every individual’s skills, adaptability, and outlook become paramount. It’s imperative that these individuals constantly enhance their competencies, pushing their own boundaries. Intelligence and flexibility trump rote skills, as startups lack the luxury of bringing in specialists when challenges arise.
“The only thing that is constant is change.” – Heraclitus
Comparatively, large corporations are less demanding because tasks are often repetitive. Redundancy exists in staff roles. However, startups encounter new challenges constantly, demanding employees who embrace the unfamiliar. While larger firms might consider these new problems outside their purview, startups must confront and resolve these unforeseen obstacles promptly to survive.
“Efforts and courage are not enough without purpose and direction.” – John F. Kennedy
The chart below illustrates this concept graphically. While larger organizations follow multiple job function levels (horizontal rows) and disciplines (vertical columns), smaller companies adopt a more streamlined approach. This reduced hierarchy and fewer roles mean each individual must shoulder several times the responsibilities compared to their counterparts in larger firms, demanding a broader skill set.
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“Unity is strength… when there is teamwork and collaboration, wonderful things can be achieved.” – Mattie Stepanek
With a management level person overseeing six direct reports (scope of six = 66), a six-level management structure can support around 46,000 employees. However, more hierarchical layers often lead to inefficiency and reduced competitiveness. Contemporary businesses, striving for agility and productivity, are curtailing excessive levels, emphasizing better management systems.
“The best teamwork comes from men who are working independently toward one goal in unison.” – James Cash Penney
The expanded scope doesn’t imply an engineer handling all aspects like operations and marketing. It means that a single employee in a startup may tackle responsibilities typically distributed among multiple people or even different departments in larger firms. For instance, the role of a “Product Manager” could be fulfilled virtually by several individuals with distinct skills. Engineers might directly interact with customers, participate in sales and marketing activities, and grasp customer workflows. This necessitates not just technical expertise but also communication and problem-solving abilities, intensifying the hiring challenge.
“Don’t be afraid to give up the good to go for the great.” – John D. Rockefeller
When recruiting for startups, patience is key. Avoid filling positions hastily with minimum qualifiers. Exceptional individuals are essential in every role, as mediocrity is a luxury startups can’t afford. Opting for quality over quantity prevents costly replacements and ensures long-term success.
Bob Norton is a long-time Serial Entrepreneur, CEO and investor who founded six companies with four exits that returned over $1 billion to investors for a 25X ROI. Two others are still in development. He has trained, consulted and advised thousands of Entrepreneurs, CEOs and boards since 2002. Mr. Norton works with companies to 2X to 10X growth rates and valuation using AirTight Management™, the world’s most comprehensive Leadership Operating System. He also helps companies raise capital to fund growth. He is also the Founder of The CEO Boot Camp™ and Entrepreneurship University™ for early-stage companies that have not reached product-market fit and $1M ARR.
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