This essay on management was originally published on my website www.terrygold.com
Management
It would be a good idea to plan your management team from the day you start your company, but if you’re like a lot of entrepreneurs you wait until you are overwhelmed and going crazy to start dividing responsibilities. If you are on your own you might be able to manage six to ten people yourself. If you have a partner you can a go little longer but not twice as long because you will find you start contradicting each other and confusing the people working with you if you don’t lay out clearly how responsibility is divided.
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Management
The best place to find managers are within your company. They understand the culture you are building and they understand the history of the company. Some positions just can’t be filled from within though so you have to hire from the outside. Hiring a manager from the outside is difficult because it is hard to get a sense of a candidate’s values and ethics in a few interviews. Don’t even think about bringing in a manager who might not live up to your company values. No amount of technical or management experience will overcome a poor fit in the values department.
If you are the CEO, President, founder or whatever, you probably believe that you set the tone and the example for everyone below you. (You do.) Your culture is for the most part going to mirror your values, work ethic and sense of fun. As your company grows there is going to be more distance between you and new people in the organization, so the cultural tone will still be influenced by you but new people will look more towards their managers for their cues. As I look back on all of my managers, I could have made my decisions easier if I had asked "would I want ten more people acting like this manager?" I believe that you will get people somewhat like your managers because the manager can’t help but hire people like them and the people will view the manager as an example of how to get ahead. I realize now that when I promote someone I might as well put a sign on their back that says "Management thinks this person is doing really good and wants to reward them and put them in a position to do even more good things." If you wouldn’t feel comfortable signing that sign, you’ve got the wrong person in the position.
I had a conversation with a manager once that went something like "you know, its not that what you are doing is bugging me so much but I’m concerned that other people are going to pick up on this and cross the line because you are setting an example of how people should behave here. Because you are a manager I have to hold you to an even higher standard."
Herb Morreale, the founder of XOR made these comments about hiring managers. Herb is also a fan of Built to Last (Update – Herb has joined me at Gold Systems!)
"Hire from within. That means everyone needs to be looked at as the next CEO. GE/Jack Welch did a great job with this. If she isn’t your next CEO you need to get her ready to be one, or move someone else into her position. Obviously, it’s not practical to build an ebusiness from the bottom (not enough time), but it’s something to keep in mind. Winning cultures have groomed the leaders, not inserted them. Ask yourself everyday who’s the next CEO."