India is no stranger to the entrepreneurial urge. The leading business groups of our country are either family-run businesses or started off as entrepreneurial ventures, and successful business leaders have consistently demonstrated strong passion for new initiatives in business.
Furthermore, entrepreneurship in India is not restricted to large organizations alone. There are innumerable success stories of young graduates and individuals, including a large number of women, in every big city, town or village, who rely on sheer entrepreneurial ability that includes training, experience, customer service skills, networking, hard work and innovation.
However, there is one challenge that all these businesses are grappling with—the war for talent. This issue was further complicated in the last few years when salary expectations soared, creating a huge gap in what is “desired” and what is “deserved”. And it has been especially hard for start-ups, since not all of them were able to provide the “value proposition” individuals were looking for.
Illustration: Jayachandran / Mint
For entrepreneurial set-ups, finding the “right” fit is only one part of the story. Equally important is the reason for expanding the team beyond the founding members. A person from outside should be introduced only when the business is ready to be scaled up and there are certain skill sets that are missing.
The challenge is finding talent that is willing to take the risk of embarking on a journey that is not completely structured. The positive fact, however, is that there is now a segment of the working population that has created financial security for itself, with the result that these individuals are now looking for new challenges and feel that a high-growth entrepreneurial environment holds the answer to that.
The key to success here is hiring the best person who can possibly be engaged with because this individual will strengthen the foundation of the business and contribute actively to building culture. Since it’s such individuals who will define the future of the business, the founders will have to invest the necessary time and effort to engage with them. Furthermore, once the person is on board, the founder will need to undertake the difficult task of letting go in order to let things grow.
Points to remember
In today’s environment, it would serve companies well to keep in mind the following:
• Screen carefully for people who have not shown longevity in their jobs. Insist on understanding the reasons for frequent job changes and make sure you are comfortable with them.
• Realize that the skill set required for a growing economy is different from a slower growth economy.
• Outside talent may not be the only solution. Use this time to build a bench, grow an internal solution. Once you have identified “potential” leaders, give them individual attention, seek outside help, if required, to develop skill sets. There are a number of independent human resource, or HR, consultants who can customize programmes for start-ups based on their unique needs.
• Undertake very careful and detailed screening and referencing to understand the candidate’s achievements and the context in which they were achieved. We cannot emphasize enough the importance of thorough referencing. There are many situations where this has helped prevent costly errors or indeed, find hidden gems.
• Remember that value creation for the individual is important. Therefore, have the discussion on career and compensation growth upfront. Define clearly the road ahead, despite all its uncertainties. In the case of stock options, make sure you have detailed the current and future capital structure of the firm before making commitments on profit sharing and equity participation.
• Take time to define and communicate your company culture for yourself and your team. Importantly, invest the time to put it on paper so there is a clear and shared understanding of the values and culture of the company. Entrepreneurs usually have a good idea about what they want but those thoughts need to be articulated.
• Once the new person is on board, define a specific period every day or every week (1-2 hours) when you will catch up with each new person individually.
For the entrepreneurial team, getting in the first wave of outside people requires a lot of preparation. And after they join, it will take two-three months to carve out responsibility areas, integrate them within the company and bond with them. A good idea is to make team interaction a part of the screening process in order to encourage buy-in from the rest of the team.
Since there will be sensitivity about confidentiality as well as interviewing with a future subordinate, set up the process as an interactive dialogue rather than a series of interviews, and limit this to critical team members.
Letting candidates spend time with the team as well as other stakeholders upfront will help them identify with the culture of the company and provide them with the opportunity to actually experience the ambiguity and controlled chaos that is part of most entrepreneurial set-ups. It will also give the existing team the opportunity to gauge whether the right fit is being achieved.
During this time, defining “control” is a critical factor that can make or break the new relationship that is being nurtured in the company. Achieving and maintaining a good comfort level and trust is important, as is providing an environment that supports autonomy and empowerment.
Sometimes, it is good to confront and handle conflict immediately, without letting issues fester. Introspection is required, but not in isolation. For the entrepreneur, this could also mean sublimating one’s ego if it is for the greater good of the company.
Growing with the team
While the first phase of team expansion is critical, what is equally important is dealing effectively with the differences in attitude and approach of people as the team grows.
Sometimes, the company may have good people who were right for the initial start-up days, but they may not be the right people for the scale-up phase. For this, it will be important to think through where their skill sets can be applied and communicate this to them effectively. On the other hand, for high-growth individuals, the company may become a limiting factor.
In this situation, there can only be two answers—either they will leave to become entrepreneurs themselves or find a role that drives them further, maybe in a smaller but high-growth company. And if you have the right people, show them that you care. Treat the employee as you would a customer and retention will seldom be a challenge.
At this stage, it would also serve the founding team to create an advisory board, a group of not more than three people who can provide various inputs to company strategy—be it regarding connectivity, access to funding commitments, customers, HR issues, among others.
The motive for creating the board should be clear, and once that is done, identify the right senior people for it, since the constitution of the board is critical. Always choose people you are comfortable with but who also push and challenge you.
And last but not least, make sure you have a value proposition for your board members and directly communicate it to them.
A last word
Entrepreneurial set-ups need aggressive, hungry and talented people to succeed and grow to the next level. The answer does not always lie in a pedigreed profile from a big-name company with large, impressive results.
Invest the time and effort to find the right individuals, give them a growth path and then sit back and watch them work their magic, staying ready to support them through the rough patches.
Anjali Bansal heads the India practice of Spencer Stuart, an executive search consulting firm, and is based in the firm’s Mumbai office.
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