Avoid Hiring Pitfalls When Staffing a New Venture

By Ernst Gemassmer

Hiring the right people into the right positions of a new company is critical to getting funded, and the right people are as critical to success as the funding. Yet the hiring process in most small companies is usually haphazard, and low priority compared to all the other work that needs to get done.

The solution is to make this function one of your highest priority tasks, and formalize the process to avoid the following common hiring mistakes:

• Desperation hiring without a plan. Too often, you need a person “yesterday,” so you hire the nearest warm body, without proper consideration of strategic skills required, or how this hire fits into your overall staffing requirements. My recommendation is to hire the core executive team first, and charge them will building their own team.

• Poor position definition. The responsibilities of every position need to be clearly defined, realistic, and appealing. Make sure you are not looking for a set of skills and competencies that can’t usually be found in a single person. If the expectations or the salary range are unreasonable, you won’t get good results or a happy employee.

• Inadequate candidate sourcing. Going to Craig’s list may be adequate for some roles, but your rolodex and networking are the best source for C-level executives. Save the executive search firm for later, but make sure your search process can yield a robust list of candidates with the qualifications you need. Saving costs at hiring time can cost you a fortune through years of poor and unhappy performance.

• Hiring process that starts and stops. Without the proper priority and a formal timetable, your hiring process loses momentum and the results are unpredictable. Good candidates quickly recognize and avoid potential employers who never respond, cancel interviews, and can’t make a decision. Poor prospects have fewer choices so they wait.

• Skip the background and reference checks. It’s easy to be so impressed by a mirror-image candidate, or so pushed for time, that you skip the reference checks. Unfortunately, your gut-feeling may be a setup for pain later, when you find out the candidate talks a great story, but never delivers, or is highly skilled but unable to work with customers.

• Slow to correct staffing mistakes. In the heat of battle, to complete your initial staffing, every executive makes some staffing mistakes. For example, you may have overlooked a person’s professional shortcomings because of a close friendship. When you realize that you have made a mistake, address the issue in a polite, confidential but firm manner, and then encourage everyone to move on.

• Hire without consideration of team culture. You should focus on developing a ‘team spirit’ around the fundamental beliefs and objectives of your emerging company. If your team spirit and culture are developed through Friday afternoon beer bashes and open work hours, people from other work cultures will have a hard time fitting in and performing. A good practice for startups is to have every senior manager interview all significant new hires to ensure that they fit the culture of the new company.

As a startup, your future is all about the people you have on your team, and the people you hire. You need the very best to maintain that competitive edge. It’s normal to make some mistakes, but you need to minimize these by at least avoiding the common pitfalls, and realizing the importance of the staffing process. Then proceed with cautious urgency and make quick changes when warranted.

Today’s article is presented by one of the founders of our Startup Professionals team, Ernst H. Gemassmer. He resides on the West Coast, and has long helped entrepreneurs there, as well as providing turn-around assistance as interim CEO, and International coaching. You can contact him directly at ernst@startupprofessionals.com.