Startup companies need to be efficient and mistake free in its early stage selection of its team. Otherwise, the company will stumble, maybe fall behind against better managed competitors. Then there is the need to hire the best in class for this elite team. It is hard to select team members that will fit the company’s philosophy and human enterprise while not facing financial dystopia. From my work experience, discovered two anchors that slow down the greyhound speed for a startup.
My description of someone putatively knowing that he/she is doing is a “Chauncey.” While working at a major merchant bank, I would participate in IT departmental meetings that included a “Chauncey”. I was in charge in the development of a major transactional application and database to handle billions of dollars of monthly loan participations – fractional units of syndicated loans resold to smaller banks. The application had to track the interest rate of the original loan, the portion of the interest rate being retained, and the percentage of the principal loan being sold, as well as other associated information such as the salesperson, institution, etc. During these status meetings, this individual would rarely speak, looked attentive but at the same time never demonstrated that he understood what was going on. Actually, I believed that he kept shut during these lengthy meetings, since he was totally lost. That’s why did I nicknamed him Chauncey.
The origin for this nickname came about from a book and movie, “Being There”, authored by Jerzy Kosinski. The lead character was a simpleton gardener, who was mistakenly named Chauncey Gardiner, although he had introduced himself as Chance, the gardener. The point of the movie was that people misinterpreted whatever he discussed regarding horticulture and concluded that his remarks were gems in economic policy. He was, in short, a “visionary.” And at the end of the movie, he apparently walks on water. Still, he was an addlepated gardener.
That same IT person took over the management for a major trading division of the bank, soon after my departure. Something seem awry with the computer trading monitors, which he wrongly assumed was a hardware defect. He replaced all at the cost of hundreds of thousands of dollars. It was only a computer virus. He was released soon thereafter.
The antithesis of a Chauncey would be someone who interacts and asks rational, interesting questions. When I had set up Friday meeting pizzas and presentations, I had the ulterior motive to screen out the laggards. And, in this one startup, one software engineer was released through this process. I find that this proactive approach results in positive returns to investors, as the small startup team generates the most effective work.
My another Chauncey is Melissa Mayer (Yahoo), as she smiles, goes through the motions in running a company, and nothing really happens. She exercises poor hiring decisions – a marketing executive who only lasted over a year, but his severance cost over $100 million to the company. Is responsible for over $20 billion in M&A investment losses. And there is some question in mind about her contributions and management skills at her former employer at Google. How she has lasted over 4 years there is a wonderment.
My other favorite employee character is the “White Rabbit” from Alice in Wonderland. In Alice, the Rabbit kept looking busy by checking his watch constantly; yet he seemed so catastrophic and disorganized. Nothing got done. Still, he was too flummoxed by the many activities. I did meet an in-house lawyer just like that.
Now T., the in-house lawyer, had a knack of finding ways of not delivering work on time. Everything he did seems to stretch out something that would take less than 2 weeks in my former law firm into something lasting for months. He even organized his work in such a way that he took 15-20 minutes a folder. Behind his desk, he kept 40-50 open, brown envelopes stacked vertically – except with one major problem – none had labels to identify the contents. So, before the meeting actually began, I would sit quietly as he searched the relevant folder, and I would glance at my colleague trying to figure what was going on. Everything was too complex. He was absolutely disorganized. Much like the White Rabbit. And, whenever we would address issues related to a contract that need to be vetted, he would raise irrelevant legal issues to the team to explain why the contract edits had not been finished. He originally worked in the Federal government space, where non-elected employees survive by extending their tenure and through politics. I guess he never abandoned his federal government habits. Private sector jobs, especially in startups, rely on increasing value through quick returns, not by procrastinating the projects.
So, in conclusion, I always want to avoid the Chaunceys and White Rabbits, if I need to round together a startup team. I prefer to avoid these bad apples for a team, which needs to operate efficiently and quickly. That would not be the most efficient way to run a company. Recently, a NY Times article described the overall company environment at Yahoo to be despondent. So one must identify these profiles early before falling into an unrecoverable deep hole. I pointed out recently to a senior manager that he has no choice to dethrone the CEO and the son before it is too late. Now, with only 4 months of burn rate remaining, the company’s back is against the ropes. That is why is key to find team members who can work in an entrepreneurial environment and thrive in that milieu.