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This article was published on June 8, 2013

7 ways to build and retain a strong team as your company grows

7 ways to build and retain a strong team as your company grows
Gary Swart
Story by

Gary Swart

Gary Swart is the CEO of oDesk, the world’s largest online workplace—on which more than 35 million hours were worked in 2012 alone. Gary is Gary Swart is the CEO of oDesk, the world’s largest online workplace—on which more than 35 million hours were worked in 2012 alone. Gary is a thought leader in the future of work, entrepreneurship and team management. He is passionate about helping small businesses thrive, especially when it comes to how best to hire and manage teams. His knowledge is fueled by extensive experience working with the startups and small businesses that use oDesk, as well as by mentoring other entrepreneurs. Gary spoke to more than 30 groups of budding entrepreneurs in 2012 (including a talk at Harvard Business School, which teaches a case study on oDesk). His commentary has appeared in a variety of outlets including Forbes, TechCrunch, BBC, CNBC and Bloomberg TV. Previously, he led SMB Sales for the Americas at IBM’s Rational Software Product Group, and also served as VP of Worldwide Sales at Intellibank, where he was responsible for leading the sales organization.

Editor’s note: This is a guest post by Gary Swart, CEO of oDesk, “the world’s largest online workplace.”

Your team is the backbone of your startup. It can propel your business to greatness, or sink it into irrelevance. Building your team wisely is perhaps the most important thing you can do to increase your chances of success, but it can also be one of the hardest.

How do you identify a co-founder, or decide to have one at all? What kind of people should you be looking for? And given that great people are in high demand, how can a startup with limited resources compete for the best talent?

I often get asked these questions from entrepreneurs. Here are seven important pieces of guidance for building, growing and retaining an exceptional startup team.

Establishing your initial team

1. Choose your partner wisely.

First of all, do you even need a co-founder? I believe the answer is a firm ‘yes.’ As Stratis Karamanlakis, one of the two co-founders of my company explains it, “Going it alone is very, very hard. There’s so much doubt, insecurity, stress, exhaustion… and you can deal with that much better when you have someone to share it with. There’s also someone to spar with and get things off your chest when things get tough.”

When identifying a co-founder, look for three things:

  • A strong personal relationship. A startup is a lot like a marriage, so the most successful co-founders are friends (or have at least worked together before).
  • Complementary skills. Not only will this allow you to cover more areas of expertise, but it makes decision-making easier if there are clear lines of responsibility.
  • Shared passion. Sure, you may sell your company next year for $100M. But there’s a better chance you’ll be in this for the next 5 years together and you’re going to face a lot of resistance, so you should both be relentlessly passionate and optimistic about the problem you’re trying to solve.

2. Recruit utility players, but have a vision for the future.

In the early days, you must hire people who can — and want to — wear many different hats. You can’t afford the luxury of hiring specialists who don’t want to work outside their comfort zone in an all-hands-on-deck environment

At the same time, that will not be the case forever, so consider what you want the organization to look like as it grows. Build a functional org chart — functions only, no names — as a game plan for the company’s growth. It’s not until you understand the work that needs to be done that you can start thinking about who best to do that work.

3. Build an “A-team” by leveraging benefits that only startups can provide.

The best talent attracts the best talent, and having a team with high talent density accelerates your growth. But how do you attract star candidates who may have offers from companies with cafeterias, yoga rooms and masseuses? You should focus on three benefits only startups can provide:

  • Impact. At a startup, every team member makes a visible, significant contribution to the company’s operations, which can be incredibly empowering.
  • Exposure. Wearing many hats is one of the best ways to gain a broad range of experience. Don’t know anything about finance, sales, or operations? You will shortly.
  • Opportunity. The risk may be higher, but so is the reward. The potential to play a part in breakneck growth is compelling and entirely unique to startups.

4. Don’t hire anyone without talking to back-channel references.

Interviews are a poor predictor of performance and ability, and the references provided by a candidate are not necessarily representative. Thomas Layton, oDesk’s executive chairman, believes you shouldn’t even bring a candidate into the office until you’ve talked to a few “back-channel” references — people you found independent of the candidate’s provided contacts. You can even use the references they give you to find the references they didn’t, by asking, “Who else worked with [name] that I should talk to?”

Optimizing and retaining your team

5. Invest in retaining your top performers.

Once you’ve built your A-team, you need to start investing in keeping it. To do so, you should focus on the four dimensions that people care about:

  • Impact. This continues to be critical. People want to feel like their work is making an impact on the company, and also that the company is making a positive impact on the world.
  • Growth and Development. Great people want to get better; one of the most common reasons that big companies lose great people is they feel like they are stagnating professionally. Help your A-players become A+-players by giving them tough challenges.
  • Balance. Give people time to pursue what’s important to them outside the office, and also make sure the office is a place where people feel comfortable and interact regularly. Give careful thought to a common area like a lounge or kitchen that people will really use together.
  • Financial Rewards. The above three things are important, but they don’t pay the bills. Remember that even if you have limited resources, compensation can come in many forms—including equity, vacation time, perks, and flexibility.

6. Have high standards and make them known.

Every person in the company should have clearly defined objectives. This not only makes it clear who is performing and who is not, but it supports professional development and reinforces each person’s impact. And don’t be afraid to protect your high talent density by taking action when these objectives are not met — as our CFO Greg Stanger says, you don’t fire people who are inadequate, you fire people who are not exceptional.

7. Talk to as many people as you can.

Joy’s Law, inspired by a quote from Sun Microsystems co-founder Bill Joy, says that “no matter who you are, most of the smartest people work for someone else.” Use that to your advantage by making your ‘team’ broader than just your direct employees; leverage your board members, advisors, friends and families, consultants, freelancers, etc. Don’t let the fear of someone stealing your idea stop you from talking to others, because it’s really execution that makes the difference between success and failure.

These strategies will help you build the strongest team possible, but remember to stay flexible— your team will always be evolving, as your company’s growth transitions from the jungle to the dirt road and eventually (hopefully) to the mainstream highway. Just hang on and enjoy the ride.

Image credit: AFP/Getty Images

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