People. The hardest part of building a business.
You can figure out how to build a product, open a location or get the first customer.
When it’s time to grow the team, things start getting tricky. This guide will help you go from doing everything yourself to leading a team and being a good manager.
If you’re a founder or CEO responsible for building the structure of your organization, use this guide as a template and customize it for your business.
If you’re a new manager of a department, use this guide to better understand how company management should work and where your team fits in. Pay attention to the Objectives, and Process sections as they will help you effectively lead your own team.
If you’re an achiever, you may find yourself rewarded with a team of people to lead. It could be because you started a business or got promoted.
Here is what the typical journey looks like:
Have no fear, you got this! Whether you are building software, opening a restaurant or selling real estate, this journey is similar.
To help visualize the journey, we will use a handy diagram called the. It contains 5 ingredients that you need to be a great manager and leader.
In the Formula, we’ll start at the top and work our way down. Each ingredient is key to making the others work effectively. In the next section, we’ll dig into the first ingredient in the Formula, Culture.
Imagine you have an imaginary example business called Crazy Cookies, and you offer a cookie delivery subscription service. Your customers can pay a monthly fee and have fresh, delicious cookies delivered to their offices. I know… it’s genius!
Suppose you’re ready to hire your first employee to make deliveries. You’ve narrowed it down to two potential people:
How do you decide who to hire? Both Beth and Tom have a mixture of good and bad qualities, so you need to determine which are most important to Crazy Cookies.
The qualities that are most important to your business are your values. Values are a key component of, the first ingredient in the Manager Formula.
Culture is the behaviors and skills that are valued on your team. It includes 5 parts:
In order to make your team successful, you need to be intentional about culture.That means defining each of the 5 parts, writing them down and sharing them with everyone. Once your culture is on paper, it’s easier to choose who to hire because you can simply check “Does this person share our values? Do they appreciate our story?”
You may be tempted to think “culture and values are too fluffy… let’s get serious!”While these concepts may seem soft right now, getting them right early will help you determine the right people to recruit, reward and retain for your team.
When you build something new, you likely have a few reasons “why” in your head. It might be to solve a problem you’ve experienced or make a hard thing easier for your customers. You likely daydream about how your business could grow and succeed by solving this problem.
You are daydreaming about your. The Vision is a statement that explains the purpose for why your team exists. Once that purpose is understood, it can guide your team to make effective decisions and hire the right people. For Crazy Cookies, your vision might be:
“To bring joy to office workers through fresh baked treats”
Having a defined vision will help you later to set the right goals and understand if you’re making progress towards success.
Every company has a unique set of. These are the traits and behaviors that people in the company live by. They are the beating heart of the company’s culture.
In the early days, values come from the leaders. Consider the qualities and personality traits you respect most. For Crazy Cookies, you might use these:
These 4 words each have a clear definition that explains what the value means to you. Some of these are broad, while others can be very specific. Here’s another example:
By creating values, you can use them to help with the 3 R’s: recruit, reward and release.
Defining your values gives you clarity. It’s easy to understand who belongs on the team, who should be promoted and who shouldn’t be there because you have a guiding light from your values.
Your values come to life in your customs. These are the specific ways people in your company behave to align with your values. For example, if one of your values is “Dedication: waking up early to bake fresh cookies daily,” you might be frustrated with a baker who can’t drag himself out of bed until 10am. If the custom is that everyone at the bakery comes in early, then that is the behavior new people need to adopt.
Customs happen whether you intentionally define them or not. Consider what customs you value and write them down. Some examples could include:
Entire companies and small teams all have unique customs. It often causes tension when someone doesn’t follow the team’s customs, which is why it’s so important to intentionally define them.
Every organization has a unique story and history. When it’s just you, the story is simple because you are the main character. The early history may motivate you to continue to grow the company, and remind you of how it all started. The story often influences future behavior because of past experiences.
When you hire new people, they don’t know the story. You need to share context of what’s happened in the past so new team members can benefit from lessons learned. In order to do that, you need to document your story so it can be passed down to new people. Here are the steps to document your story:
Where the business is located and where people work has a big impact on culture. Early on, you need to make some important decisions:
For some businesses, like a retail store that needs staff present to serve customers, the options will be more limited. If there is flexibility, different people will prefer unique variations of these options. Some can only work well in a quiet environment like a home office, while others thrive in a loud open bullpen of desks.
As you define your culture, decide which type of space aligns most with your values. Here’s a unique example from an equipment company in Colorado:
Let’s start with what skills you currently have on the team.
Some people might be incredible salesmen, while others can bake cookies or build a computer with their eyes closed (that would be super impressive!) To determine what roles to hire for, first consider what skills you currently have on the team, and then outline what skills are needed to grow. To start, answer these questions:
The answers to these questions can identify what skills you have in-house, and who you need to fill in the gaps. For Crazy Cookies, if the founding team members are all great at baking, you likely don’t need to hire more bakers. However, if you don’t know the first thing about how to get cookies from the bakery into customer’s offices, hiring someone with sales and marketing experience would be a great step.
In the very early days, it’s often just a few people doing everything. When you reach the point of needing a team, you’ll split the responsibilities into functions and assign them to each of your team members. There are 4 universal functions in every organization:
These functions might have different names in your organization, or if you’re running a functional team (e.g. Marketing team), you might have different sub-functions, like design and content writing. Regardless, the core concept is universal.
You need one person responsible for each function. In the early days, you may have generalists that are versatile enough to handle multiple functions. As you grow, you’ll ultimately need someone that has deep experience in each function to be the leader.
As the company grows, each function may have multiple roles, such as a separate leader for sales and marketing within the Acquisition function. In the case of Tom and Beth, the potential employees for Crazy Cookies we discussed earlier, we’d be hiring them for the Delivery function since they are getting the product to customers.
The functions outlined above may feel broad. If you hire Tom or Beth for the Delivery function, you need to define specific responsibilities that they are accountable for. If you have multiple Delivery employees, how do you ensure that they don’t step on each other’s toes? Let’s introduce a few tools for you to use:
Theis a diagram that shows each functional area of the organization and who is responsible for it. The chart includes important details like who each person reports to and what their core responsibilities are. This differs from a traditional org chart because the focus is on the functional areas rather than individual job titles. This ensures that there is a person clearly responsible for each core area of the business. Here is an example for Crazy Cookies:
Creating this chart eliminates the stress of an early employee wondering “who is my boss?” or “what am I supposed to do here?” Make sure your chart is available for everyone on the team to see.
Anis a document that outlines each person’s responsibilities, strengths, weaknesses, and the metrics used to measure success. A typical Individual Roadmap will have the following sections:
Creating this simple document ensures that there is no ambiguity about someone’s role. By reading it, that person understands exactly what she is responsible for and how she can grow.
People are not stagnant; instead, they are constantly learning and evolving. The role and responsibilities that made sense for someone last year may no longer be a fit this year. To be the best manager, pay close attention to each team member’s personal growth. This can be done in a few ways:
Every team member grows differently. For example, some engineers want to become managers, while others may prefer to become expert individual contributors. By regularly communicating to understand their goals and progress, you can personalize a plan for each team member.