How teams evolve
We chose to profile these companies given the different backgrounds of each entrepreneur and growth paths of the companies.
Ching started iMoney 7 years ago, after returning home to Malaysia and discovered that it was difficult to select the best credit cards, insurance and banking options. iMoney began with three employees for the first six months. In January 2013, Ching expanded the management team to 4-5 people, which lasted for 18 months. The crucial roles then were Head of Tech, Head of Product (doubled as Operations), and Head of Marketing.
Chen Chow (and co-founder Joel Neoh) started Fave (KFit at the start) with a strong following of team members that they have worked within their previous roles. 30 people resigned from Groupon and joined CC & Joel to start Fave, along with 4 key leaders - their CTO, Head of People/Product, Head of Operations and Head of Business Development.
Wee Jonn was hired by Photobook founder, Mark in 2013 and was tasked to bring the company to the next level given Mark’s ambitions. Photobook had 60 people when he joined and had 3-4 VPs, and today Photobook stands at over 250 people, 11 VPs and 3 country managers in the organization.
Scaling was different for each company. For iMoney, key management changes occurred when their companies hit fundraising milestones. In each funding round, Ching expanded his management team in terms of size and capabilities. In Fave’s situation, the acquisition of Groupon in Singapore & Indonesia meant that they needed new capabilities and CC hired a Head of Product from Zomato. Post Series B, Fave has focused on building higher levels of management, their recent hires being a CFO (from OVO) and Head of BI. For Photobook, hiring of senior leaders has been organic, driven by the needs of the organization and renewed ambition as Wee John took over as CEO.
It is important to plan - companies should work backwards from their targets to plan the talent gaps in their teams in order to hire in advance. As a founder, you’ll always have to weigh out the cost of hiring an individual vs the opportunity costs. Some questions you will need to ask yourself to know whether you need to hire:
Are you finding problems occurring constantly/consistently?
Between you and your current management team - is there a clear skills gap?
As CEO, are you really doing the 10X items - things that can grow the business by 10X or are you pre-occupied with other things?
Are you moving into a new territory / launching new revenue streams that you need someone to lead?
Finding | Assessing | Growing | Letting go
Ching, CC & Wee Jonn shared their tips on leadership management based on four pillars
how to search for top talent
how to assess candidates
how to grow and manage leaders and finally
how to let unsuitable ones go
On search: There were two schools of thought on headhunters.
Use them for positions where it is difficult for you to assess (i.e. tech roles if you’re not a technical expert). Bear in mind that most top managers are not actively looking for jobs, therefore employing headhunters might ease the process.
Otherwise, other founders search via LinkedIn, referrals from VCs/other entrepreneurs and via their personal network. Not employing headhunters also allows you to pay your hires marginally more than initially intended.
If hiring internally, run internal manifesto for roles if you want to promote internally. Ask your candidates to create a 30-day, 90-day, 3-year plan, transition plan, and recommendations for the role.
On assessing: The more senior the hire, the more time is required assessing them. Time spent assessing will help reduce lost time in productivity and opportunity cost with the wrong hire.
Use multiple touchpoints - in Fave, senior hires require unanimous approval from everyone that was involved in the screening process - any doubts have to be surfaced during committee discussions.
There are tools available to help understand an individual before meeting them (CrystalKnows).
Even though your role is to sell the company’s vision to the new hire, you also need to paint a realistic picture of the challenges and as part of the assessment, challenge them to give you solutions on how they would solve it given a realistic budget allocation.
References are key - don’t limit yourself to the ones given by the candidate. Evaluate the person’s superiors, juniors and peers.
Assess the leadership abilities of your new hires - are they scalable? Can they scale from managing 1-3 people to 8-10 people?
To onboard, align and grow: In general, feedback and communication is key - the more senior and the larger the management team, the more frequent you’ll need to communicate.
Post-offer (and even before the official join date), consider bringing the new senior hires for team off-sites, give them projects. This will help you assess them in real-life situations and their fit with the rest of the team.
Be numbers-driven in terms of goals and be clear on expectations with your senior hires from the get-go.
Ching’s methodology incorporates the 3Ps: Progress, Problems & Plans. Each manager has to present their 3Ps during their weekly check-ins and go in-depth into those areas once a month. Corporate management planning is done every quarter.
In growing them, you need to realize it’s different being a leader of leaders. You need to individualize your approach.
KPIs/OKRs need to be set at the company level and broken down by heads/divisions to ensure that each person understands their contribution to the overall goal.
Consider giving an allocation of budget for personal/self-development, and incorporate the use of that funds into their KPIs.
Transparency on progress across the different heads is key in driving performance.
Letting go: Often ignored, founders need to be equipped with the know-how on letting people go due to underperformance or mismatch of fit.
It is important to align expectations and define the terms and method of separation even during the interview process. Ask them how they left their previous roles - that will give a good indication of how you will need to manage them.
As leaders, you will know whether the person is a good fit within the first 1-3 months. Do not ignore the signs and red flags - reasons could also be due to a mismatch in terms of chemistry, style and speed of execution. If you feel that the person is not a good fit, it is very likely the person feels the same way.
The key with this form of crucial conversations is that you should initiate the conversation but get their thoughts and frustrations out first. Once it’s shared, you can choose to reassign the individual or talk about separation.
Driving overall performance
Keep communications and reporting lines very clear.
Ask challenging questions to your team and challenge them with the most difficult tasks. When you’re small, everyone does everything. At the 100 employee mark, you need to leverage relationships to get things done, and any number above that you need to make sure that you empower others.
As you scale you need to always learn, unlearn, relearn.
Constantly ask yourselves, if you were not around, who is an ideal replacement to take over the company?
Watch how a leader’s second-in-line performs when the leader goes on leave. And how does the leader perform when the second-in-line leaves. You need to assess whether the team can plan and execute equally well.
Consider running pair leadership - pair two leaders who can match each other’s strengths/weaknesses.
Growing yourself as leaders
When you’re unfamiliar with something, be obsessed about learning it and try to build expertise around it. By doing that, you can turn that threat into an opportunity.
Decouple yourself as a founder and the role that you are holding. There are two hats that you wear as a founder - as owner and as CEO. As an owner can you assess yourself as a CEO? Take away the ego, talk about it with your co-founder or trusted individuals in the management team. Ask yourselves, if everyone can take a vote today on whether they want to keep us as leaders or not - would they keep us?
Focus on strengths and not the weaknesses of individuals.
Make sure you build credibility. Does the team trust you and your judgments?
If you want your business to grow, it will reach a stage where getting the right mix of people to complement and reinforce your business is essential. Having an effective management team, which is vital to the teams' performance, helps you to create a more efficient and capable business. Hope you enjoyed this session, see you at our next Scaleup Scoop event!
The content of the article is summarised from the ScaleUp Scoop event, a series of learning events aimed to bring insights from lessons learned during our closed-door mentoring sessions to the larger entrepreneurial community. Find out more about our upcoming events on our social media platforms or subscribe to our newsletter here.