Building an Effective Tech Company Management Team

The process for successfully following this article’s headline may seem pretty obvious: hire great people! At a very simplistic level, of course, that is the answer. But as you look closer at this important activity, the situation appears complex and nuanced. First, there is a limited number of “great people.  And every software or hardware company wants them for their management team. Suffice it to say, I believe that there aren’t enough “Five-Star Athletes” to go around. So it becomes very important to understand not only who you can attract, but what are the MOST IMPORTANT qualities for your particular situation. Additionally, how well individual candidates will fit with your company’s culture and other senior staff is critical.

How do you approach this critical task to ensure an optimal outcome? In my opinion, it’s important to start with at least a skeleton planning process, rather than jumping right in and hiring people, which is how it often works. The principals involved in this decision should sit down as early as possible and systematically approach this task. Much as you would to solve any other important business problem. Start by making some lists:

Management team hiring checklists

1. What are the roles that need to be filled
2. Key skills that are absolutely required for each role
3. Skills/experience that are would be “nice-to-haves.”
4. What personality traits fit best with the company culture (whether planned or existing)
5. Personality traits that need to be avoided in each role
6. Compensation range available for each position
7. A list of potential candidates from within the management team’s existing network
8. Which roles will need to be recruited more widely (advertisements or headhunters)

This process may be streamlined, depending on the stage of development of your software or hardware tech company. Maybe you’re a mature company, and need to focus on filling 1 or 2 key positions. That will shorten the process considerably. But what if you’re a ground-floor startup or involved in a situation where there needs to be significant changes in the senior staff? In this case,  it is important to set aside enough time to do this process justice. Of course, like in any planning process, some of the data compiled is obsolete once you move to the implementation phase and reality comes into play. But if you can follow a process similar to that outlined above, it will provide a framework that should serve you well. This will help you maximize the ultimate effectiveness of your assembled management team.

In addition to utilizing a strong process, I believe that optimizing your management team will depend heavily on evaluating your unique circumstances. And on being realistic about them as you move forward. What do you REALLY need and who can you REALLY GET? Let’s take a look at some of the specifics of facing reality:

Your company’s ability to attract talented people

Take a serious look at what type of executives you can realistically attract and who you can’t. If you’re a software startup, you’re going to be more attractive to entrepreneurial risk-takers. Not so much to blue-chip, name-brand managers. Is your culture based on casual dress, bottom-up decision-making, foosball tables, and open office layouts? Or is your culture buttoned-down, very structured, with most decisions made at the top? These two extremes will obviously appeal to very different mentalities and personality types.

Are you able to match the salary and stability of any potential competitors for the target talent? Or is your main attraction a chunk of equity and a company story that could lead to cashing that equity for extreme wealth, if things go well? The main message here is to understand “what pond(s) you’re fishing in” and stick to those. You’ll waste time trying to hire folks who don’t fit with your specific company profile. And even if you can hire them, it often doesn’t work out well. These are generalizations, and there are exceptions. But at least taking a look at who you can attract up front can shorten hiring cycles. As well as minimizing major mistakes.

Balancing talent and familiarity

One of the big mistakes I see CEOs and other senior tech company managers make over and over again is “hiring their buddies”. Familiarity can be an important attribute in reducing the risk of failure. It can raise confidence that the candidate has the right skills for the job and is a good fit for the company culture. But the mistake I often see is that the personal comfort level between the parties tends to “blind” the hiring manager to “fit” issues. This comfort can deceive them into believing this known candidate is perfect for the new role.

Just because someone was a good fit in a previous company doesn’t mean they’ll do well in this new role and company. While familiarity can be helpful, change can be good. Also, if a pool of candidates is limited to people that you already know well, by definition, the talent pool will be very shallow. You run the risk of not hiring the best available person from a skills perspective. And also maybe not even the best fit from a cultural perspective. If you don’t take some risks and hire unfamiliar people, your network will stagnate. And your management team will likely be a sub-optimal group, relative to a more open approach to hiring.

Management team experience and the company phase

Some technology company executives are great at startups. Others thrive on the growth phase. A third group is best at managing the complexities of more mature, bureaucratic organizations. Realizing this, it’s important to consider the stage of development an executive is comfortable in and has successfully experienced when considering candidates. Of course, again, these are generalizations. Some great executives can thrive in more than one, or even any, stage of a software or hardware company’s life. But it is one factor to consider when evaluating the “total package” of individual candidates. Preference deserves to be given to those executives who profess to thrive — and can demonstrate that they have previously done so — in the development stage of your particular technology company.

Candidate Fit vs. Resume

This “test” is similar to the talent vs. familiarity discussion above, but with minor differences in important ways. At the extreme, you might find one candidate whose skills and resume fit perfectly with the needs of the role. But one who is a questionable cultural fit. Another candidate might have a much weaker resume and skill set. But you’re certain he will fit in and work well in your company environment. Who do you hire?

In reality, it’s unlikely that you’ll have to choose between two candidates at such extremes. Reality more often presents various “shades of grey”. But this illustrates that for each individual senior role that you are hiring, it is important to understand the relative importance of skills/resume vs. cultural fit. Some roles may allow someone with a strong background but a weaker cultural fit. That’s if the role will operate relatively independently and be a major asset to the company. But that same type of person in a role where intra-company interaction or consensus-building is a critical component may be doomed to failure.

Overall management team personality mix

Lastly, I want to present one aggregate criterion, which is probably the least obvious in the list. That is diversity of approach and personality in your overall management team. I think that in an effort to find folks who “fit the culture,” companies risk hiring “cookie-cutter” senior managers. This can lead to “blind spots” in decision-making if everyone approaches issues similarly and generally “thinks alike”. I’m really speaking about diversity of thought and personality here. But I believe that diversity of race, gender, background, etc., can be very helpful in reducing a potentially uniform approach to business. Having a mix of people, some who are very agreeable, some who are challengers, leaders, and followers, can actually result in a more creative and functional management team.

A dysfunctional management team example

An example I’ll provide is a company I worked at early in my career. The top management team was filled almost uniformly with very smart, “A” personality types. They were hard-charging, relatively undiplomatic, and all determined to set the agenda. What resulted from this look-alike pool of management talent was a dysfunctional team with constant clashes, continuous in-fighting, politicking, and poor communication. This was the result of a CEO hiring in his own image. People he viewed as having the qualities of a “winner”. The moral of this story is that it takes more than one type of executive to win. The parts must fit together in a coherent team where everyone gets along and understands their specific role.

There’s my view on the most critical items to get right, if you want to assemble a software or hardware company management team that “fires on all cylinders”. What does your list look like? This is obviously a very subjective topic. I would love to hear your view. Post a comment with your approach to assembling a top-notch tech management team!

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