Company Leadership: Make Sure the Shoe Fits

Once upon a time there was a self-funded startup. The startup became the leader in the Windows and OS/2 code generation market space with a nice big contract with IBM and many happy software development customers. One day the CEO decided that he wanted to take the company to the next level. So he started looking around for “experienced” executives that could help him. He got a President from Dun and Bradstreet, a VP of Engineering from IBM, and a new CFO (he is a mystery character because I don’t remember where he came from). The new big company gurus came in and started making changes. “Be gone telesales! We are now using deep carpet sales.” So the sales cycle went from minutes to months. Gone was the predictable revenue stream. Individual sales, the bread and butter sales, were beneath the startup and were no longer pursued. The executives from the larger companies shifted the sales force into Enterprise Sales, which is what they understood. The VP of Engineering, fresh from IBM, declared that company’s products would not support pointers. (We generated C and latter C++ code.) In about a year the little startup went from a couple million in the bank to a couple million in debt, several rounds of layoffs, and finally bankruptcy where the remaining assets were sold.

The moral of my story is that if you are going to hire someone for a top level position who does not have experience in startups, you are taking a huge risk. Either mentor him until he gets up to speed or let him learn at someone else’s expense. Time and time again I’ve seen folks hired into small companies from large companies and their approach to business is out of step with the needs of the small company. Unless they have an experienced executive above them who can mentor them through the mental changes, they are going to have a hard time, possibly fail, and most definitely cost money. So what are some of the differences between a large company and a small company?

Large company	Small company
Lots of money and resources.	Little money and limited resources.
Time for planning	Limited time if any.
Rigid organizational structure.	Fluid organizational structure.
Clearly defined processes.	Processes?
Well established relationships with vendors.	Nope.
Long-term clients.	Nope.
Branding	Nope.

* These are generalizations

Small companies and startups NEED leaders who understand how to use limited resources, to prioritize tasks, to pursue goals; ultimately to be creative problem solvers who WILL find a way. If you are interviewing for executives remember to look for people with the right experience not just big name experience. Make sure that you find folks who are not afraid to learn and who are willing to provide flexible contributions. Someone who can say, “That’s not my job” ... will not be there when you need him.