Startup Teams, part I: Disaster Teams

Teams are extremely vital to any startup. Nothing happens without the people, and nothing much happens without the right people working at a good performance level towards a clear common goal.

For years investors have had a simple formula that includes teams as a central component, many throw around the old slogan that the value of the company is equal to = the magnitude of the pain * the potency of the remedy * the team delivering the remedy for the pain.

So even if you have a big huge acute problem (like the current financial sector turmoil, or Peak Oil) and a brilliant solution to that, it still amounts to nothing without a good team being capable of high quality execution.

We should all know this; that teams are important and that people count, right? Knowing this doesn't help us from occasionally wandering astray and finding ourselves and our startups stuck with a "Disaster Team".

How to identify Disaster Teams? What to do if you end up having one?

In short, Disaster Teams are teams that are certain to remove value instead of add value. Now that's not nearly as simple as it sounds: since it's mostly about potential. Every startup, when properly run, has the potential to produce great results. There's a lot of potential. Yet still what many people (and teams) fail to grasp is that it is equally bad to the owners to loose opportunity to the competition than to directly throw away the owner's money: to the owner it is in essence the same thing. Yet somehow we still always feel worse about throwing money away (or losing money) directly than losing opportunity: and we should not. Think about a situation like this: you invest all of your fortune to a big company X in the retail sector for example. Then company X never goes after any opportunities and you see their competition grabbing their market share left and right, beating them in every turn, outgrowing your company X. To you it is equally worse as would be company X directly pouring money down the drain - and this is more true to startups since they are all about opportunity - and don't even have that much money to really worry about wasting it.

So, Disaster Teams remove value mainly because they are incapable of going after the opportunities, or competently landing them in the startup's favor. Most often the deadliest Disaster Team is your management team or your board of directors. Can even be the group of founders.

Here's how to identify if you have one, and implied ideas on how to fix it:

1) the Team is full of "brothers of faith", having similar opinions, assumptions and views on almost everything. The Team agrees so much it makes you nervous and there's a "cult spirit" influencing decision making, perhaps kept very much alive by a powerful personality in the Team. The really serious part is: the lack of any critique, opposing views and objective thinking. A company that doesn't heed to objective reality (as in facts and proven intuition) and doesn't exercise critical thinking is soon a company that ends up doing hideous mistakes.

2) the Team doesn't organize by themselves. They wait for "the great leader" to appear like Chairman Mao and be directive on what to do with the most important stuff. The lack of the capability to self-organize can only mean a couple of things, and they are all negative: A) the lack of empowerment in the company, B) lack of motivation to take responsibility and make things happen for the benefit of the business, C) unclear and vague goals, vision and perhaps misunderstood objectives, D) political play and a culture of avoiding mistakes. All of those things are extremely destructive for a startup and a Team that has those is seriously gunning for a disaster waiting to happen.

3) Disaster Teams also often act illogically and chaotically. People drive their own agenda to separate directions and there's no shared values, attitudes or goals that would drive the behaviour "in the background". Disaster Teams frequently do counterproductive things that might for example optimize the part, not the whole. Startups should almost never use corporate tools like the Balanced ScoreCard, unless you are being super smart in implementing it. With the BSC it is easier than commonly perceived to create a Disaster Team that only looks at the card as a guidance on what to do = this is deadly. If you have them implemented now, consider putting them through the shredder quick, while you still can.

4) Disaster Teams don't stick and adhere to rules (even their own) and they may play inner politics more than seizing actual opportunity out there in the market. Almost any political game with startups is a huge-vast negative and will end up hindering or hurting you. The classic example of a Disaster Team not sticking to rules is the classic act of escaping responsibility and changing decisions (often without telling) when the times comes to implement them. Also a repeated non-delivery on an agreed and clearly important task is a classic.

5) Disaster Teams meet infrequently and sometimes even rarely (less than twice a week is "rarely" in startups). How often should a management team meet? = every single day, all of you, face to face.

6) Disaster Teams only communicate when they have to. Sometimes a person in a Disaster Team only communicates when he needs to get his own job done. Otherwise he just shuts up and avoids sharing information or openly discussing anything. Any gaps like this in your team communication can mean prelude to disaster. Communication goes both ways: all team members will have to be willing to share and discuss anything and everything about their "domain" and stuff.

7) The Team wastes each others time and does not focus. Everybody has a laptop in team meetings, everybody has their cell phone turned on. Half of the Team is out on customer calls or in other meetings, etc. Those are rather obvious signs, but this is even worse: having a Disaster Team that repeatedly wastes everyones time by for example acting out a stupid procedure of reporting everything area-by-area jointly in a meeting. Meetings are NOT for sharing information or even for discussing. They are primarily for making decisions and coordinating the execution you are about to act out, and Disaster Teams will not get that.

8) One very obvious "tell-sign" of a Disaster Team is the inability to deal with its own problems. Sometimes this comes full with a culture of actively building Tabu's and skeletons in the closet. There should not be anything you cannot discuss with your management team. Funding? talk about it. Cash balance? talk about it. Problems with your latest customer delivery? talk about it. Its topics, items and issues arguing - it's not people arguing (I hope, or then its an instant disaster right there), so no topic is Tabu and you as the startup leader will need to be able to discuss even your own shortcomings, mistakes and actions to take to improve your own performance.

Part II will be on Success Teams then.