Last Words
'Team player' is a term you might not associate with entrepreneurs, who are often seen as single-minded risk-takers, driven by their big idea and not inclined to share potential success.
Nevertheless, it is a fact that new ventures are more likely to be successful if they are based around teams rather than individuals. In a recent SEEDA-sponsored study, John Cavill concluded that ventures run by entrepreneurial teams are more attractive to investors and more likely to succeed than those managed by lone entrepreneurs (John’s paper, “Growth Entrepreneurship: do we really understand the drivers of new venture success?” ) The idea of many heads being better than one isn’t new: Cavill quotes a 20-year-old article by CW Hofer and WR Sandberg, "Successful entrepreneurs seek the best people to support them ... and create a climate that encourages people to do their best."
Investors back teams
Investors know this, and they tend to back teams rather than individuals - they will also be give greater weight to the strength of the team rather than to the innovation itself. A great innovation will fail without an entrepreneurial team to bring it to market, while an effective entrepreneurial team can take a “me too” business, inject an innovative twist and turn it into success.
All businesses (except the smallest) rely on teams, so what makes an entrepreneurial team different from a management team?
The answer is predictably complex: the shared commitment that arises from joint ownership and accountability plays a part, as does a common well-articulated and passionately-held vision. As with any team, to be successful entrepreneurial teams need a mix of skills, experience and personality types. Probably the minimum, at the start of a venture, is three people – to cover product development, sales, business planning and operations. As the company grows it’s sensible to plan to expand the team to five, with each leading on one of the following: business planning; product development; sales; operations; and financial management.
Planning for growth
A young business won’t be able to afford to have this size of team on the payroll from day one, so think carefully about how to bring people on board and when. From the start, entrepreneurs should be thinking about the need to share ownership, power and responsibility and they have to be prepared to relinquish personal priorities in order to build a team and a successful business. This isn’t always easy for some entrepreneurial types, but the ability to do it often separates success from failure. Having different personality types is important in a team. But while it makes for more creativity and the ability to react to turbulent business environments, it can lead to conflict. The most effective entrepreneurial teams are the ones where the team member who becomes the CEO develops the leadership skills to manage the inevitable clashes, and turn them to the advantage of the business.
Contact: Ally Charles
Email:
Published: 12th April 2008
