You’ve likely heard the sobering statistic. Over 50% of startups fail year one. While some may see this as a warning or unwanted pessimism. Others will look deeper.
Those who do will see that a top reason those startups failed was lack of leadership experience within the organization. Leadership doesn’t just come from you as the founder. It comes from those you place around you as you build your team. It all comes down to hiring decisions.
Let’s explore 5 startup hiring mistakes you can avoid as you’re building that winning team.
1. Hiring Just Because You Have the Money
You would not believe how many founders do this.
They have their startup capital in hand and they just start hiring for positions without putting much thought into it. They haven’t written down what the job roles are. They haven’t established what traits they’re looking for in new hires. They may end up hiring lower level staff first. But there’s no one to lead, guide and develop them.
Hiring quickly and recklessly without a plan can lead to costly mistakes such as:
- Hiring the wrong people
- Hiring people to “sit and do nothing”
- Having to let people go
- Morale challenges
- Extreme waste when you can least afford it
How to Avoid It
Lee Iacocca, a former Ford Motor Co. president, once famously said, “I hire people brighter than me and then I get out of their way.”
Work from the inside out. Who do you need immediately around you to get this startup up off the ground? You need a marketing director and a finance director. You need someone to head up operations or manage wholesaler or vendor contracts.
In the first days of your startup, it’s just you and your core leadership sitting at the table.These individuals, being both leaders and experts in their roles, know what to look for in the teams they will build out after you put the right core team in place.
2. Not Considering the Culture You Want to Foster
Company culture starts with you. Whether your company becomes a place people want to work or a toxic workplace depends on your ability to establish a culture from the beginning and hiring accordingly.
How to Avoid It
Do you want to have a trendy, open, flexible culture? Is it more important that people follow the rules and stay in line? That might be especially true in some high-risk services and manufacturing.
Are creativity and innovation very important to your culture?
Consider what type of culture you need to achieve and hire people who work well with this culture.
3. No Due Diligence
Just because you have a great idea and a business plan doesn’t necessarily mean that you’ve hired or fired someone before. Recruiting, screening applicants and conducting interviews may be completely foreign and as with any newer process, it’s easy to make mistakes. Many startups end up hiring unqualified people who looked good on paper or who talked a good talk, telling you everything you wanted to hear.
Many business owners end up trying to “get it to work”. They don’t want to admit they made a bad hiring decision. There is personal shame involved, which can keep a leader from making the right decision to let a bad hire go.
How to Avoid It
Do your homework. Research, network, and learn recruiting and interviewing best practices. Also, learn how to spot a smooth talker who’s all talk! Consider working with a premier recruiting firm. They do this for a living. They know how to get the right people for the right companies.
4. Ignoring Red Flags
You’re interviewing a person. They start bad-mouthing their former employer. It makes you feel uncomfortable.
You’re holding an impressive resume. This person has so much experience. They graduated from a great school. But they’ve also had 6 employers in the past 10 years.
This candidate is “sweet-talking” you. It feels a little sleazy.
Many founders who are hiring miss red flags. Or they don’t listen to their gut instinct.
How to Avoid
If a candidate is making you feel uncomfortable now, you and your team aren’t going to want to work with the person long-term. It doesn’t matter how great they look on paper if they can’t work well with others.
Do consider whether the feelings are motivated by any kind of personal bias, but always listen to these feeling and consider what they’re telling you.
5. Hiring Only for the Culture
Hiring people with culture in mind is important, but hiring people just because they fit some vision you have in your head doesn’t work either.
How to Avoid It
Take your time. Slow it down. It’s definitely okay to evaluate carefully and be thoughtful and deliberate with your choices. You can have both the experience you need and a person who fits well in your company culture.
You Can Avoid Startup Hiring Mistakes
Build your team from the inside out. Building a great startup starts with hiring the right executive leadership team. To learn more about how to build an effective team and grow your business, contact us today!