Very interesting post! I agree with your points.
Another aspect that I think is important when it comes to effectively managing the relationship between the Board/ Investors and Entrepreneurs is the clear division of boundaries and authority. Founders should seek to define their roles and the extent of their authority immediately, and concurrently those of the Board/ Investors to limit the potential for conflict.
Naturally, taking the time to invest in a relationship with your Board/ Investors will pay dividends too.
Thank you for your very interesting post and advice.
According to the US Bureau of Labor Statistics, startups fire c. 25% of their employees during the first year compared to c. 7% of employees per year for at an established company (defined as been active for >18 years). This is no surprise considering the newfound startup mantra: “hire slow, fire fast”.
A WSJ article suggests this shift is due to the fact that:
1. A startup’s needs change rapidly
2. Few founders have team-building experience and don’t know what they should be looking for
3. Employees shifting from the corporate world are unable to adjust rapidly
4. Getting fired is no longer such a big deal
It will be interesting to see, with time, what the implications of “hire slow, fire fast” will be for founders/ leaders and employees.
Great post! I found your take on “Avoiding bad Apples” particularly interesting. I agree that companies should hire very cautiously, particularly when you consider the financial and non-financial implication of hiring mistakes. A candidate’s cultural fit should be evaluated carefully!
In addition to hiring conscientiously, companies and founders should be less reluctant to let employees who undermine the corporate culture go. Hiring mistakes happen, however, it is important that they are addressed in a timely manner.
I recently watched an interview by Tony Hsieh, founder of Zappos, that you may find interesting. Hsieh talks about the cost of hiring mistakes and the importance of protecting Zappos’ culture: