The young founder-CEO of a young but profitable Rs 30-crore company believed that it should capitalise on what it saw as immense market opportunity. He believed his company should and could grow by 10 times to Rs 300 crore over the next 5 years. He wanted his company to be recognised as the number one player in its area by far on various parameters.
Finance was not a constraint as the company was generating sufficient cash flows with external funding being a viable option as well. The issue lay in getting management talent into a largely unknown company and in motivating them to help generate and manage the incredible growth envisaged by the CEO. The company was now run by young but very bright and talented people.
What kind of a person should the CEO hire and what should be offered to such a person? Should an external recruiter be hired to find the talent or should personal connections and networks be leveraged to the maximum extent?
A lot of young and start-up companies face these and sundry other challenges relating to recruitment as they have to deal with growth. While there is no general formula that fits all, it is useful to keep the following in mind: no one can communicate the vision and goal of the company better than the founders. It is their passion, desire, goals and commitment to the business, and its culture and value systems that need communication.
Outsourcing this crucial activity to an external agency is a poor substitute. The top hires in all young companies that have gone on to become great companies have been personally recruited by the founders.
People who have spent ?too much? time in a large corporation are generally ?spoilt? from the standpoint of a start-up. Functions are clearly defined, roles are unambiguous, budgets are clearly allocated, and processes are defined. The system is designed to ensure high predictability. On the other hand, a start-up has none of these.
Usually, the founders have built the business largely through common-sense management, entrepreneurial zeal and seat-of-the-pants decision-making. But the kind of senior executive who will shine in a start-up is one who can straddle both the worlds of entrepreneurial chaos and organisational structure?one who?s comfortable with ambiguity and impromptu decision-making but who?s also a catalyst for the needed change towards structure and planning; someone who will make things happen without being told; who will forge a road ahead where there is no clear path; who will not be dependent on support staff. In fact, someone who believes in the potential of the company and more importantly in his own ability to create value. The person has to be confident enough to deal with any downside risk that?s inherent in any young company?not a bureaucrat but someone with an entrepreneurial mindset?executives who have entrepreneurial mindsets are motivated by the challenge to create their own legacy; to be compensated by a mix of short-term and long term pay-offs by way of say, stock-price appreciation through the creation of a valuable business; they are not excited by brandishing their company provided credit cards at the local club while sitting on company provided furniture while vacationing on company?s expense.
They are people who wish to earn the right to enjoy all this through the sheer thrill of being part of a team. How does the young founder manage older and more experienced executives? Herein lies the mettle of the founder. The ability to let go of certain decisions, of being professional, of not micro-managing, of giving freedom to the executive, of being aware that the organisation will change, of managing aspirations of other employees, of using the opportunity to learn while being clear about the non-negotiables such as ethics and customer service. Clear communication and expectations from both parties are critical.
What do you think?
?Sanjay Anandaram is an advocate of entrepreneurship development. He?s involved with Nasscom, TiE, IIM-Bangalore, and Insead business school, in driving entrepreneurship. He can be reached at sanjay@jumpstartup.net. The views expressed here are his own