March 21, 2008

The "Am I Good Enough?" Question - By Sanjay Anandaram

Recently, I was a panel member at a mentorship event. One of the presenters was the founder of a company whose business card simply read “Chief Architect”. On being asked who the CEO of this company was, he surprised all by saying, “I’m looking out for a CEO. I realise that I don’t have the ability to be the CEO and that I’m the bottleneck in the company.” Needless to say, this remarkable self-realisation and public articulation astounded all the panel members.

It is a tired cliche that the most important thing in a startup is the team. But, it has yet to be internalized by many founding teams (and in several cases by VCs!). So, what is the problem? Is it that the people don't "get it" or is it that they believe that they are indeed the best team? The team lives in a self-delusionary world, in a state of denial. This is very dangerous.

There's also a third angle to this. Many times the founding team realises that the existing team has gaping holes and there's a crying need to bring quality external talent on board. But this realisation does not lead to action. There's a intention-implementation gap, or a knowing-doing gap. While the abstract description and jargonization of the situation helps in putting a framework for analysis, the bitter truth is that in a startup, there is no time for such analysis. Where the CEO and the senior management fail to deliver the goals for the business, they need to step back and ask the reasons for their failure. They need to ask: "Am I good enough?" "Does the business need additional, different skills?"

Clearly, it is very hard for the founding team to accept and acknowledge that they are "just not good enough". In fact, it would be hard for any of us to do so. But to be confronted with a situation where the founding team's competence is questioned can be quite a draining experience; especially given there's so much emotion and passion involved. It is this emotion and passion that sometimes acts to the detriment of the company. The emotion and passion creates a kind of security blanket that masks the competence of the team members. Hard work, loyalty, and excitement start becoming substitutes for competence, analytical insights, and action.

So what does one do in a situation where one of the founders isn't performing and has to be let go?

It was a matter of friendship, of common aspirations at least once upon a time. The true test of the CEO and the leader is the ability to differentiate between self and company. And the CEO/leader has to ask: Is what I'm doing good for me or for the company? Will my company be better served by other more talented people? So, the ability to make that clear distinction between self and company is a critical first step.

After all, if the startup is the founding team's baby, the "parents" have to do what is good for the baby not what is good for the "parent". The baby has to be trained by qualified teachers in various disciplines, be punished and rewarded by the teachers. The parent feels proud when the baby grows up to be a high achiever and a top performer. The parent has a role to play not all the roles. There are other people who have significant influence and impact on the baby as well - teachers for example.

There are situations where the CEO is totally insecure and insists on hiring people who are of lesser mettle. The CEO is concerned that he/she will lose the position of authority. This kind of CEO soon becomes the bottleneck in the company and very quickly drives the startup to the ground; or ensures its survival only as a corner-grocery-store equivalent. The VC has no business funding such a CEO. This kind of a CEO cannot attract talent; will be obstinate; will insist on things being done his way. In short, this kind of a CEO is better off by himself. This kind of a CEO is not a team player. And that can mean death in the business!

You may be a superstar but only if the team supports you. You cannot shoot goals or score runs if the team does not support you. You have to play in the larger interests of the team. Think football, cricket, hockey, basketball. On the other hand, if you believe that it’s better to be an individual star, then don't play team sports - golf, tennis, chess are games for you.

Unfortunately startups are like team sports. So, what kind of player are you?

What do you think?

Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings close to two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at sanjay@jumpstartup.net. The views expressed here are his own.