In the first part of Modwenna Rees-Mogg’s excellent guide to hiring senior managers, the AngelNews founder looks at the value they can offer and outlines the roles you’ll need to fill
For every entrepreneur running a fast growing business, juggling becomes second nature. Along with everything that needs to be done today, there’s the team to manage, customer relationships to smooth, suppliers to chase and barter with, and a strategic vision to ensure you remain acute to how things must evolve to ensure profitable survival. Entrepreneurialism is defined by the ability not to let the balls drop.
But no man is an island, and great entrepreneurs have an uncanny knack of gathering around them, from the earliest possible moment, top talent to help them in their mission to grow their business. In the early days of AngelNews I benefitted massively from an informal advisory board of the top talent I could find; they were paid in beer and chips! And that is still the stepping stone I recommend to other young businesses trying to get off the ground without the time, money or, let’s be honest, the size of business to merit actually appointing anyone to a C-level role.
Nevertheless, in my view, the top priority for an entrepreneur should be dealing with “the management issue”, which is why we created our Pitching for Management
event series. It has become trite to say that a successful business is all about three things, “people, people and people,” but nonetheless it is a rule that holds. And it’s a rule that angels, VCs and increasingly banks nearly always rely on. Every time you think you can struggle on alone, remember that for every Sir Alan there are Margaret Mountfords and Nick Hewers sitting alongside them. Take note and try to do something about it as soon as you possibly can.
It’s the mix in the team that matters of course. As technology increasingly enables machines to undertake more and more mundane tasks, it has not meant that fewer people are needed. It means that even smarter people are required. And entrepreneurs need to embrace the challenge of finding the right blend of human resources which will give their businesses that critical competitive edge. At the end of the day it is the right allocation of human resources that makes the difference between reaching and staying at No.1, or handing over the crown to the competition.
How an executive team drives growth
I was speaking to PJ Darling, the founder of Spark Energy, the other day. He has grown a utilities business from scratch to £20m turnover in three years. It is clear that the senior team he has built around him has made, and continues to make, this growth rate possible. From the wise chairman – who leads the business, especially in managing shareholders relations, which in turn brings in the funding the company needs – to the senior operational personnel – many of whom were persuaded to join an exciting start-up in the utilities sector from some of the world’s largest and most stable businesses – the team around PJ is what is making the business what it is. Getting that team right has been the reason Spark can manage the issues arising out of the incredible growth rate it is delivering. PJ told me that he is delighted that his first two hires are still with him, which says something, but more about that later.
Wise entrepreneurs know their limitations. One of the best pieces of advice I have received was from an entrepreneur who once lectured at London Business School. I cannot remember his name, or even the event at which he spoke, but I do remember that he said, to succeed as an entrepreneur, you need to “get rid of the tasks at which you are worst, first, and then keep on going until you only need to do the things which no-one else can do better than you”.
I also remember another entrepreneur telling me that you should always hire people who are better than you, especially at the tasks for which you are giving them responsibility.
Creating the right management team
Creating the right team is all about having the optimum mix of skills for the stage the business is at. Less can be better than more in the early stage of a company’s life, and therefore it makes the challenge of finding the best people even more important. You also need the right type of people – in short, those who you can learn from as well as make use of. Most importantly, if you are a resource-stretched, fast growing business, you don’t want to have to teach them their job. And there is no point in having a brand name NED if they are never around when you need them.
Of course it takes courage to devolve responsibility and, perhaps more importantly, the accompanying authority to make decisions. And deciding in whom you can trust to help you “bring up your baby” is a big issue. What roles you want filled and what type of person should fill them are two issues that have challenged business owners for generations and has spawned the entire headhunting industry, so don’t imagine that you will find it easy to buck the trend.
Then there is the issue of how you reward your nascent band of senior managers, especially if you are a cash-strapped business trying to juggle employment costs with production, sales, marketing and more.
Before giving you a few tips on how to build the right senior management team, here are some key reasons for why you need to fill the following roles sooner rather than later.
The Chairman
The right individual will be so much more than just a “big name” figurehead. He or she should have been a chairman before (after all it’s not your job to train the chairman in the role they are to fulfil, and you are unlikely to have the capacity to permit them to experiment on your business).
Chairmen act as one of the key external facing representatives of your company – especially in the context of investor relations. A good chairman will help you find and then keep your investors up to speed and happy. He can be pulled out to give you gravitas at key meetings with customers, and suppliers too.
But crucially, he can act as the glue that binds the team together – managing different interest groups and working to achieve outcomes which are to the overall benefit of everyone.