opentto - diligent phase 6 – people management & recruitment

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OpenTTO.org - DILIGENT Phase 6 – People Management &

Recruitment

PMR Objective5 Myths About Entrepreneurship

Culture, Personality & CommunicationsRecruiting

BoardRoles Change Over Time


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PMRObjective

To identify people and team issues critical to success:

• Is the right team available - entrepreneurs?• Can they grow and recruit?• What are the cultural challenges• How will the composition change over time?

The team has to have initial skills and ambition and be capable of accepting and implementing changes to their own roles, team structure and responsibilities over time.


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People Management & Recruiting

5.0 FCS

6.1 Describe Entrepreneurs

6.2 Understand Cultural Issues

6.3 Styles,Personality & Communica-tion

6.4 Workshop Recruitment Strategy & Plan

6.5 Overview Board, & Transition Plan

Business Lead

HR Advisors

Investors

Technical Advisors

Partner/Cluster Firms

Business Case

Financial Analysis

People & Entrepreneur Sources

Product & Partner information

6.1 Describe the characteristics of an entrepreneur

and how they fit the current opportunity

6.2 Workshop cultural issues relevant to team

performance and entrepreneurs

6.3 Review and evaluate personality types and

communication styles to optimise team performance

6.4 Workshop the recruitment plan, the sources of

potential candidates and the core & functional team

6.5 Develop the plan to recruit the Board, and to

put in place transition plans for people over time

6.6 Complete and review Confidence Index for PMR

Recruitment Plan

Lifecycle HR Plan

Sources of People

Team Building Plan

Business Case & Plan

Executive Lead

HR Advisors

Business Lead

Review the entrepreneurial characteristics required, the personality types and communication styles that are important, and the recruitment

process. Pay attention to changing roles over time and build the transition plan.

ProcessSupplier

Input

Output

Customer

Overview

6.0 PMR 7.0 SPB 8.0 TRP


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PMRSuppliers and Inputs

Typical questions for suppliers and inputs:

• Are the key players and champions in place now?• Do they have the passion and the knowledge?• Have they the ability to adapt to the market?• Will they accept the need for changing roles?• Is there a path back into research?• What reward/retention structures are options?• What retention and what incentives are the norm?• What sources can be drawn upon for HR &

recruiting?

Templates

P CS OI

Transform


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PMRProcess and Transformation

Typical questions around entrepreneurs:

• What are the characteristics of an entrepreneur?• How do we find and attract them?• Are there latent entrepreneurs in our midst?• What are some of the common myths?• What is different between early-stage and late-

stage?• What if the goals change during the journey?• Can they grow and recruit the rest of the team?

Templates

P CS OI

Transform


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PMRFive Myths About Entrepreneurship

Expertise, Experience and the Early-Stage Entrepreneur#:

• 40% had no industry experience; 33% no jobe.g. Jann Wenner; Steve Wozniack; John Katzman

Instead: • intelligence• Desire – passion!• adaptability• sales skills• willingness to provide specialized products.#US National Commission on Entrepreneurship, Patrick Von Bargen Executive Director. June 24, 2001.


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Well-researched ideas and Proven Business Plans?:• Research = 4%; business plan = 33%• A vision then jumping from rock to rock vs. plans for the Golden

Gate Bridge• Adaptiveness, open-mindedness, deciding quickly, face-to-face

selling

Financing and the Early-Stage Entrepreneur:• 66% = less than $50,000; average = $25k; not $1, or $3, or

$13m• Rolling Stone, Waste Management, Hotmail, Microsoft, Dell• Personal savings, friends & family, credit cards … and then

angels?


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Risk and the Early-Stage Entrepreneur: • Yes, personal, family, reputation risk, but• Not much money, and even then …• Not much experience in the industry …• Persuading others to take on risk: employees, suppliers,

customers

Expertise, Experience and the Later-Stage Entrepreneur: • Growth requires “upgrading resources”• Skilled, experienced, specialized training• Steve Ballmer at Microsoft; Starbucks• (And remember the “get big, get niche, or get out” industries)


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Growth demands changes in the Entrepreneur:• Well researched business plans• Growth demands strategic planning, strategic decisions• Growth demands coordinated management• Growth demands investment which demands accountability

Financing and the Later-Stage Entrepreneur:• Growth requires investment, and that requires money• Remember the “get big, get niche, or get out” industries• Venture capital participation may be critical to successful

transitions to later stages


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Risk and the Later-Stage Entrepreneur:

• Value created that might be lost …• To grow, the tasks are more difficult (management, strategy,

sound investment)• If the entrepreneur fails, he may lose his company, or lose

control, or lose his share

Most probably will require a “change of the guard”


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PMRThe Sixth Myth About

Entrepreneurship

The problem is that when you look at businesses that are

successful, the entity that is successful isfundamentally different to what it

started out as

The product, customer or application may have changed which means you can't get it right the first time.

Raja Sohail BashirAccessCAPITAL.com


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PMRGrow and Recruit

The first team has to be able to attract the second:

• Inspirational and visionary• Able to recognise and select good talent• Track record in managing the development team• Lead by values and example• Flexible and in contact with customers

• Manage cultural differences – Who is compatible with whom?


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PMRA Team for the Hard Times

The team has to be resilient:

• Building a business takes a toll on people• It takes enormous energy and passion• There will be ‘black’ and ‘dark’ periods• The team needs to capable of evolving and

growing

Ongoing development is a critical success factor.


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How do individuals work (over time):

• Which task does each do best?• Which do (or are likely to) do worst?• Which would they enjoy the most?• Which would they enjoy the least?• How tenacious are they?• How passionate – will they get through to the end?• What are the change-over points in talents over

time?• How will people react to having to change roles?• How will the inventor cope with changing roles and

influence?

Templates

P CS OI

Transform


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PMRCultural Challenges

There are significant cultural challenges:

• Between the researchers, inventors and entrepreneurs

• Between all of the above and investors and owners

And these relationships change over time

• Early attention is important


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PMRCultural Challenges

Personality type indicators e.g. Myer-Briggs:

• Jungian focus on conscious, cognitive part of the psyche• Psychologically validated instrument to indicate preferred

styles– How you are energised (Extrovert vs Introvert)– What you pay attention to (Sensing vs Intuition)– How you make decisions (Thinking vs Feeling)– How you live and work (Judgement vs Perception)

Consultant Robert Blumenthal found that the majority of businesses are started by six personality types: NTJ, NTP, STJ, (E and I). High-tech businesses are more often founded by four of these, NTJ and NTP (E and I). Other findings were: NTP established businesses

survive more frequently; SFPs seldom start businesses of any kind (actually none in the sample of 312 males); and STP founded high-

tech businesses often fail.

Consultant Robert Blumenthal found that the majority of businesses are started by six personality types: NTJ, NTP, STJ, (E and I). High-tech businesses are more often founded by four of these, NTJ and NTP (E and I). Other findings were: NTP established businesses

survive more frequently; SFPs seldom start businesses of any kind (actually none in the sample of 312 males); and STP founded high-

tech businesses often fail.


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PMRPersonality and Entrepreneurism

• The NT (J or P) combination consistently appears in entrepreneurs. Charles Ginn and Donald Sexton studied 159 founders of rapidly growing privately held U.S. firms. Significantly, INTPs, no more than 4% of the general population, started almost 15% of these businesses. Overall, STJs founded one-quarter of the businesses, NTs (50% J, 50% P) slightly over half. These figures seem to indicate that the overall link of J and P to entrepreneurism is far from clear.

• However, James Reynierse, ENTP, is definite in this regard. "I see the P preference as fundamental to entrepreneurism. I see P as associated with change and chaos and J with stability and equilibrium." Additionally he concludes that extraverts tend to be more entrepreneurial than introverts and that the N provides the entrepreneurial vision. Finally, because entrepreneurs are "very, very tough minded," they are more often Ts. According to Reynierse, "If you have three out of the four (ENTP), you have a good foundation to be an entrepreneur."


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PMRCommunication Styles

Patterns of communications and understanding#:1. The Speed Trap. Timing: rapid / gradual2. Stretching The Point. Emphasis: exaggerate / understate3. The Logic Loop. Thinking: lateral / linear4. Focus Hocus-Pocus. Focus: detail / concept5. The Blaming Game. Evaluation: self / other6. Simon Says. Relationship: initiator / responder7. Seeing Is Believing. Perception: visual / auditory / experiential

People that can match others’ patterns are more effective:

• Creates empathy and ultimately a more trusting connection

A key consideration when selecting and building teams

#Graham Andrewartha, Be Understood or Be Overlooked. Allen & Unwin 2002


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Recruiting, Boards and changing roles:

• A 2-stage recruiting strategy• Plan a Board of Directors• Plan now for changing roles over time

Templates

P CS OI

Transform


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PMRRecruiting

Recruiting as a 2-stage process:

• Firstly the core team – the team that “sells”– A credible presence for investors & partners– Skilled individuals for major functions– Use networks but not serial recruiting – not “buddies”– Interim staffing to afford high quality– Capabilities will change over lifecycle

• Secondly the day-to-day functional team– Very important but not so visible– Team members working for the core leaders– Serial recruiting – find their friends “buddies” OK


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PMRRecruiting – A Measure of Quality!

General process:• Map out recruiting timeline• Separate key functional profiles from core team• Develop job descriptions, reporting and responsibilities • List top five key skills and also personal attitudes for key

positions • Show core team over time and changing competencies• Prepare draft transition plans – change management• Identify sourcing and recruiting options

These documents will add to the venture’s credibility and valuation

It is the entrepreneur's responsibility to convince the venture investor that they can build a team that can

execute on the plan.


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PMRBoards

Plan a board of directors: • Create a board that complements existing management • Chart your management needs• Use a headhunter• Use your network of colleagues and friends• Keep board size manageable• Make sure the CEO contacts board prospects• Look for people who know how to raise capital

Consider an Advisory Board particularly if a high-tech venture

If really good people commit to joining a startup once it's funded, that's a good sign. If really good people join a

startup before it's funded, that's a great sign.


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PMRRoles Change Over Time

Prepare ahead for the difficult human adjustments:• Where do they go?

– Back to academia?– New life?– New entrepreneur?

D – rebuild and reinvent new entrepreneur

C – entrepreneur retire and need “farmer”

B – entrepreneur has to become “gatherer”

A – entrepreneur builds as “hunter”

Think ahead to avoid pain later!

D

C

B

A


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PMROutputs and Customers

People and recruitment conclusions:• Is the HR plan fit for purpose? • How do people map onto the lifecycle?• Are the key people and the champions confirmed available?• Have the risks been appropriately identified?• What opportunities are there in partners and alliances?• Where are the future people likely to be found?• Can clusters help leverage the team skills and output?• How will the team be helped wrt personality &

communications?

Templates

P CS OI

Transform

NPV versus Risk compared to Commercialisation Objectives.


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PMRTemplates

The PMR Phase Summary Report:• Part of the evolving Business Case• Contains sections describing:

– Recruitment Plan• Core Team competencies and attitudes• Functional Team competencies and attitudes• Current available people and compatibility• Gaps to be filled and timetable• Likely sources

– Lifecycle HR Plan • Role requirements over time• Transition plan over time• Attitude and personality coaching plan - teambuilding

• This phase, combined with previous phases, helps turn the Business Case into a draft Business Plan

Templates

P CS OI

Transform


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PMR Confidence Index

How confident are you that:

1. The role of entrepreneurs has been understood?2. The need for change over time has been planned?3. The people transition plan is practical and reasonable?4. Available people are not being miscast into roles?5. Available people are not being denied opportunities to

grow?6. The need for coaching in communication styles is

understood?7. The potential team is well balanced and diverse?8. The recruitment plan is achievable in quality and timing?9. The sources of people have been well identified?10. A suitable Board can be found and signed-up now?

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