NC Aerial Imaging Services would split the equity 9 ways among staff and advisors. This is a “chief” level position, vice president, or advisor. The CEO/Founder remains majority owner with a 51% split. Advisors would receive 12%, and VP’s would receive 4% each. The split is among the 5,000,000 initial shares at $1.00 each. There are 10,000,000 total shares. The additional 5,000,000 will be additional diluted shares used to attract new talent and board members. At least two board members would be financial investors and the third would be an industry expert.
The vice president staff can earn up to and no more than 2% equity by remaining in their position and becoming vested through 3 consecutive years of employment.
References:
The ABC’s of VC Funding and Building Your Board, David Roth, Entrepreneurs, 8/22/12
Why an Army of Clones Can’t Win, David Roth, Entrepreneurs, 5/17/12
Equity:Dividing the Pie, Mike Volker
5 Huge Mistakes Startups Make When Choosing Board Members, E. Laniado, February 10,2013
What Does A Board of Directors Do? Ask Jay (Youtube) October 4,2011
Today I am going to discuss my personnel and management plan for my hypothetical business, NC Aerial Imaging. Before we go into the management plan, I would like to talk a little about our service. The drone market is anticipated to grow from a $14.1 Billion industry in 2018 to $43 Billion in 2024. There is undoubtedly multiple uses for unmanned aerial systems (UAS) and the list keeps growing. For this business we are focusing on two primary markets, agriculture and real estate. Drone surveys for agriculture offer a relatively inexpensive method of collecting crop data to create better efficiency for a farmer. Our drones can be used for real estate marketing as well. Many homes can be better appreciated by a prospective buyer by having the pictures of the home with the surrounding neighborhood in view. In addition to these two markets, drones are widely used for construction surveys, search and rescue, surveying disaster areas, as well the insurance industry. The drone industry is still in its infancy and we want to get in on the exponential market growth that it will experience in the next 10 years and beyond.
NC Aerial Images Service will have an Advisory Board. It will be made of members that have industry expertise and investors interested in equity of the company. The three board members will meet quarterly with the founder/CEO to discuss company performance in the previous quarter as well as future growth strategies.
Below is a brief description of the executive staff and why they are important to the organization.
The company will also have 3 Chief level positions, Chief Executive Officer, Chief Financial Officer, and Chief Technology Officer. The CEO will be responsible for overall growth strategy. I, as the founder, will serve as the CEO. I will be aware of market trends and changes. As well, I will as also make myself knowledgeable on markets outside of our normal service area for additional opportunities. I will work in tandem with the Chief Financial Officer and Chief Technology Officer. The company will be structured in a way that I will have three direct reports, the Vice President of Marketing, Vice President of Human Resources, and Vice President of Sales. Meetings will be conducted monthly discuss sales and marketing efforts and as well human resource issues and recruitment.
The Chief Technology Officer will be responsible for quality assurance of the software and equipment. As drone technology rapidly advances, he will be required to stay ahead of the advances and understand how new technology could better serve our existing and prospective customers. Two repair technicians will report to the CFO. At least 5 years previous financial experience is required. It is preferable that the experience be in a startup organization. CPA certificate is preferred.
The Chief Financial Officer will be in charge of budgetary concerns. This person will be create a budget based on revenue and work with the sales, marketing, and human resource departments work within the budget. Financial revenue goals will be created with the collaboration of the CEO/Founder. Budgetary needs change as the business grows so a high level of communication will need to be made with other managers. At least 5 years previous financial experience is required. It is preferable that the experience be in a startup organization. CPA certificate is preferred. The CFO will have two accountants reporting to them.
NC Aerial Imaging Services will be comprised of three executive level positions that will all report to the CEO. They are detailed below.
The Vice President of Sales will be responsible for overall sales strategies with the input of the CEO/Founder. He will have 3 sales managers that will directly report to him. Sales targets will decided in collaboration with the CEO and CFO.
The Vice President of Human Resources will be responsible for ensuring the company is in complete compliance with state and federal employment law. They will have one recruiter reporting directly to them. The VP of HR will work closely with the recruiter to ensure that we are hiring quality individuals.
Now that we have an understanding of the roles within upper management, I will go into the discussion of the equity split within management. There are
total of 10,000,000 shares available at $1 each. 5,000,000 will be split among the 3 advisors and 6 upper level managers. The CEO/Founder will initially have the majority control of the company with 52% of the shares (2,6000,000) shares. Each advisor will maintain 12% (6000,000) at initial offering. Executive staff would receive 4% (200,000) after 3 years of continual employment. There will be 5,000,000 remaining shares of equity available for offering to additional board members available.
Now we can move into the discussion of employee pay. I worked with national averages for each category of employment.
Recruiting and hiring qualified candidates will be a priority for the company. Although it is the main responsibility of the Human Resources department, it will be a culture to be constantly looking for qualified individuals to either brought on board or have available for when a position becomes available.
Sourcing
Potential sales candidates will be found on college campuses, recruited from sales related positions, and online advertising. This position will be attractive to college students because it will provide them will valuable sales experience and allowing them to work during the summer months when there is the highest demand for the service.
Onboarding
Onboarding will include completing the Part 7 training and certification online. It will also include basic customer service and sales training that will lead to success in the role. Onboarding material will be created by the Vice President of Human Resources.
Sales
Job Requirements
The most important position is the sales position. In my pay scale analysis this would ideally be a full time position, however it does work well as a part time position or summer job for students. The position would require flexibility around the client’s schedule. Leads will be provided through the customer service representatives, but the candidate should be proficient at cold calling. A driver’s license would be required to travel to and from client’s locations. Mileage would be reimbursed at $.55 per mile. In addition a FAA UAS (Part 107) license would required to be completed with our assistance. The individual would need to be a self starter. He or she would be required to follow up with clients that requested service. The sales representative would make a presentation based on options and packages available to the client as well as pricing. When the package is agreed upon, the sales representative also performs the photographic service. Bonus is available after goals are achieved. Base salary is between $43,000 and $46,000 annually depending on experience
Non Sales/Management Positions
Regional Sales Manager
Job Requirements
Experience supervising multiple sales employees is required. The position will require ongoing feedback and training of sales representatives. Previous territory sales experience is required. Previous supervision of at least 3 sales personnel is required. The ideal candidate will be organized, self directed, and being able to think “out of the box.” The regional sales managers will be required develop sales strategies with their team. Sales managers may be asked to take on the responsibilities of the outside rep team as needed. Pay is between $65,000 and $70,000 annually depending on experience.
Recruiter
This position will require a person that is well connected in the industry. It is preferable that they will be involved in trade organizations. Previous hiring experience is also required. The ideal candidate will be organized and have a good understanding of all roles within the company. The recruiter’s role will be properly source qualified candidates for the Vice President of Human Resources to interview and subsequently make a job offer or decline the interviewee. The recruiter will have an excellent understanding of the the company mission and values so as to screen candidates properly. Careful attention needs to be made to the recruitment budget by the recruiter. Salary is between $42,000 and $47,000 annually depending on experience.
Repair Technician
Requires mechanical ability and self direction. The ideal candidate will have a good understanding of the most up to date software available and how to use it. Our repair technicians will stay up to date on new technologies and keep other staff members aware of new developments during staff meetings. Salary is between $35 and $39,000 annually depending on experience.
Accounting
The accounting department will have two employees. One employee will be in charge of payroll. Previously payroll experience will be required. The second employee will be in charge of accounts receivable and payables. Previous bookkeeping experience is required. Salary for each position is between $39,000 and $44,000 annually depending on experience.
Customer Service
This position requires a good understanding of all packages available. Calls from current and potential clients will be taken from our customer service representatives. Excellent communication ability is required including on the phone, in person, and written communication. Ability to trouble shoot and think on your feet is necessary. Previous experience in a customer service role is required. Examples of experience that I am looking for is waiter/waitress, hotel front desk clerk, etc. Salary is between $35,000 and $39,000 annually depending on experience.
Executive Team
The executive team will be developed throughout the life of the business based on new investors and meeting people that meet the functional needs of the business. Executive are the following positions: Chief Executive Officer, Chief Technology Officer, Vice Presidents.
Chief Technology Officer
Salary is between $100,000-$125,000 annually. Equity package will be offered.
Chief Financial Officer
Salary is between $1000,000 – $125,000 annually depending on experience. Equity package will be offered.
Vice President of Marketing
The VP of Marketing will be required to have a high level of customer service and marketing experience. At least 5 years in a previous marketing role is required. It is preferable that the candidate have previously created web based marketing campaigns including social media. Salary will be between $80,000 and $100,000 depending on experience. Equity package will be offered.
Vice President of Sales
The VP of Sales will be required to have at 5 years of sales management experience supervising multiple sales personnel over a specific geographic area. Previous experience developing sales strategy plans will be required. Salary will be between $80,000 and $1000,000 depending on experience. Equity package will be offered.
Vice President of Human Resources
At least 5 years of previous human resource management experience will be required. The candidate must familiar with employment law in the state of North Carolina. The VP of Human Resources will develop a strategy to recruit and hire top employees. This will include participating in recruiting events at local college campuses and developing methods of recruitment online and through social media. Salary will be between $80,000 and $1000,000 depending on experience.
Thank you for your attention. NC Aerial Imaging Services has a value to provide to its clients. We need your help in getting there. Please let
The following positions are required in NC Aerial Imaging Services. This is a hypothetical startup and the purpose is to understand the potential of the company in order to gain social and human capital.
Advisory Board (3)
Chief Executive Officer (1)
Chief Financial Officer (1)
Chief Technology Officer (1)
Vice President of Marketing (1)
Vice President of Sales (1)
Vice President of Human Resources (1)
Recruiter (1)
Repair Technician (2)
Customer Service Representative (2)
Regional Sales Manager (3)
Sales Representative (12)
Accounting (2)
Advisory Board Member
The advisory board member is a part owner position that serves in an advisory capacity. No less than two advisors are financial investors in the organization. At least one expert in the drone industry is required to oversee operations. Advisory board members do not oversee the day to day operations, but have input in the long term strategy. Selection is based on interest in investors and additional equity is available to those that stay the specified length of time.
Chief Executive Officer
The C.E.O. is the founder of the company unless agreed upon by advisory board members and “Chief” level positions. In the case that the original founder be removed from the position or there is a negotiated exit due to the sale of the firm, the following requirements will be made.
Previous startup experience required
FAA UAS Certified (Part 107)
Required to purchase agreed upon equity shares
Sourcing
Potential sales candidates will be found on college campuses, recruited from sales related positions, and online advertising. This position will be attractive to college students because it will provide them will valuable sales experience and allowing them to work during the summer months when there is the highest demand for the service.
Onboarding
Onboarding will include completing the Part 7 training and certification online. It will also include basic customer service and sales training that will lead to success in the role. Onboarding material will be created by the Vice President of Human Resources.
Sales
Job Requirements
The most important position is the sales position. In my pay scale analysis this would ideally be a full time position, however it does work well as a part time position or summer job for students. The position would require flexibility around the client’s schedule. Leads will be provided through the customer service representatives, but the candidate should be proficient at cold calling. A driver’s license would be required to travel to and from client’s locations. Mileage would be reimbursed at $.55 per mile. In addition a FAA UAS (Part 107) license would required to be completed with our assistance. The individual would need to be a self starter. He or she would be required to follow up with clients that requested service. The sales representative would make a presentation based on options and packages available to the client as well as pricing. When the package is agreed upon, the sales representative also performs the photographic service. Bonus is available after goals are achieved. Base salary is between $43,000 and $46,000 annually depending on experience.
Non Sales/Management Positions
Regional Sales Manager
Job Requirements
Experience supervising multiple sales employees is required. The position will require ongoing feedback and training of sales representatives. Previous territory sales experience is required. Previous supervision of at least 3 sales personnel is required. The ideal candidate will be organized, self directed, and being able to think “out of the box.” The regional sales managers will be required develop sales strategies with their team. Sales managers may be asked to take on the responsibilities of the outside rep team as needed. Pay is between $65,000 and $70,000 annually depending on experience.
Recruiter
This position will require a person that is well connected in the industry. It is preferable that they will be involved in trade organizations. Previous hiring experience is also required. The ideal candidate will be organized and have a good understanding of all roles within the company. The recruiter’s role will be properly source qualified candidates for the Vice President of Human Resources to interview and subsequently make a job offer or decline the interviewee. The recruiter will have an excellent understanding of the the company mission and values so as to screen candidates properly. Careful attention needs to be made to the recruitment budget by the recruiter. Salary is between $42,000 and $47,000 annually depending on experience.
Repair Technician
Requires mechanical ability and self direction. The ideal candidate will have a good understanding of the most up to date software available and how to use it. Our repair technicians will stay up to date on new technologies and keep other staff members aware of new developments during staff meetings. Salary is between $35 and $39,000 annually depending on experience.
Accounting
The accounting department will have two employees. One employee will be in charge of payroll. Previously payroll experience will be required. The second employee will be in charge of accounts receivable and payables. Previous bookkeeping experience is required. Salary for each position is between $39,000 and $44,000 annually depending on experience.
Customer Service
This position requires a good understanding of all packages available. Calls from current and potential clients will be taken from our customer service representatives. Excellent communication ability is required including on the phone, in person, and written communication. Ability to trouble shoot and think on your feet is necessary. Previous experience in a customer service role is required. Examples of experience that I am looking for is waiter/waitress, hotel front desk clerk, etc. Salary is between $35,000 and $39,000 annually depending on experience.
Executive Team
The executive team will be developed throughout the life of the business based on new investors and meeting people that meet the functional needs of the business. Executive are the following positions: Chief Executive Officer, Chief Technology Officer, Vice Presidents.
Chief Technology Officer
The CTO will be required to develop a strategy that leverages leverages technology to grow the business. The successful CTO will have an understanding of the current technology and software being used. They also will be required to research and understand new technology. The drone industry is constantly changing. The person in this role will be required to have a detailed understand of the newest innovations and how they relate to our customers. Close collaboration will occur with the marketing and sales departments in order to properly use new technology to increase the level of service to our existing customers as well as gain new customers. The CTO will be required to have a good working knowledge of all markets served. The CTO will have two repair technicians report to them. Salary is between $100,000-$125,000 annually. Equity package will be offered.
Chief Financial Officer
The CFO will be required to create a budget and work with technology, marketing, sales, and human resource leaders in order to achieve the budget. Budgetary needs change as the business grows so a high level of communication will need to be made with other managers. At least 5 years previous financial experience is required. It is preferable that the experience be in a startup organization. CPA certificate is preferred. The CFO will have two accountants reporting to them. Salary is between $1000,000 – $125,000 annually depending on experience. Equity package will be offered.
Vice President of Marketing
The VP of Marketing will be required to have a high level of customer service and marketing experience. At least 5 years in a previous marketing role is required. It is preferable that the candidate have previously created web based marketing campaigns including social media. Salary will be between $80,000 and $100,000 depending on experience. Equity package will be offered.
Vice President of Sales
The VP of Sales will be required to have at 5 years of sales management experience supervising multiple sales personnel over a specific geographic area. Previous experience developing sales strategy plans will be required. Salary will be between $80,000 and $1000,000 depending on experience. Equity package will be offered.
Vice President of Human Resources
At least 5 years of previous human resource management experience will be required. The candidate must familiar with employment law in the state of North Carolina. The VP of Human Resources will develop a strategy to recruit and hire top employees. This will include participating in recruiting events at local college campuses and developing methods of recruitment online and through social media. Salary will be between $80,000 and $1000,000 depending on experience.
Summary:
Positions will be filled as a qualified “A Player” candidate is recruited. These are the positions that the company will require at maturity.
References:
How to Hire A-Players, Eric Herrenkohl, 2010
The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup, Noam Wasserman, 2012
Build Your Management Team, Entrepreneur, Steve Robbins
What is a CTO, Business News Daily, Matt D’Angelo, November 1, 2018
“The Risks and Rewards of Adding Investors to Your Startup and Scaling Issues”
Many startups begin their operation by the founder self funding the company. This will work well if you have unlimited resources and are an expert in every business function including marketing, sales, human resources, and finance. A founder should be honest with themselves in order allow the company they created flourish into the most profitable company that it can be. Although many founders may believe they can do it all, most cannot. They had a great idea, but now they are at the point that they need others to make the idea marketable and profitable.
Bringing on investors to the business adds complications that need to be carefully considered by the founder. Usually it requires the founder to give up some control of the company. Venture capitalists and many angel investors have experience with the startup companies and have seen what works to make a startup successful. They may bring social and human capital to the company. Adding additional roles to the startup can help grow the company beyond what the founder ever imagined. VC’s typically will bring in board members that take control of some of the decision making. This can cause tension between the founder and investors.
One risk that a founder incurs when relinquishing control is the possibility of being fired. The founder of Men’s Wearhouse, George Zimmer, was fired by his board after founding the company in 1973 and leading the company to be a market leading in mens clothing after 40 years. There were tensions and disagreements within the company that lead to Zimmer being fired. Being fired after 40 years is rare. It is more likely to occur within the first few months or years of the existence of an enterprise. George Zimmer has proven himself as a great leader in the industry. This is not necessarily true of all C.E.O.s. “Getting the right C.E.O. into the business just as it has figured out its niche and is ready to scale ignites the thrusters on the rocket ship.” (How to Find the Right CEO to Scale Your Company, Inc., Bruce Eckfeldt, Jan. 25,2019) The founder might be the right person to run the company at inception of the idea, but they may produce mediocre results unless they understand how to take the company to the next level.
C.E.O. Bruce Linton was fired as co-C.E.O. of Canopy Growth which is a cannabis company in Canada. Linton took the company from nothing to $20 Billion dollar corporation during a time when the industry was brand new to legal enterprises. At one point during his control, he gave equity to Constellation Brands in exchange for $5 Billion. Constellation Brands brought on new board members who eventually fired Linton after the company experienced poor financial performance. In this example, Linton was the right person for the job of C.E.O. when the market was in its infancy. However, once the company reached a mature level, and additional competitors entered the market, he could not manage. When Linton was offered a huge amount of money in exchange for equity, he did not consider the long term ramifications of losing control.
A C.E.O. that is ready to scale a company needs to have excellent leadership skills. They must be able to analyze and understand the markets they serve. Opportunities and threats need to be identified within those markets. The appropriate personnel and management structure has to be put into place. Not all founders have the skills necessary to initiate a strategy that accelerates growth exponentially.
When changes are made to the new startup such as including investors, variables are added to dynamic of the company which should be carefully considered by those involved.
References:
Founder of Men’s Wearhouse Fired by Company’s Board, David Schaper, NPR News, 6/20/2013
How to Find the Right CEO to Scale Your Company, Inc., Bruce Eckfeldt, Jan. 25,2019
Bruce Linton out as co-CEO of Canopy Growth cannabis company, Andrew Chang, CBC Television, 7/3/2019
The Founder’s Dilemmas: Anticipating and Avoiding Pitfalls That Can Sink a Startup, Noam Wasserman, 2012
“Keeping Top Performers and other Hiring Dilemmas”
Employee turnover is expensive in any business. According to Christina Merher from PeopleKeep, it can be anywhere from several thousand to 1.5x or 2x the annual salary. It all depends on how you measure cost and what factors go into the study. Some studies might include the revenue loss from vacancy if it was a profit center or the time the new employee takes to reach the revenue targets of a previous employee. Either way it is a lot of money. Needless to say, an emphasis should be made on keeping your top producing employees.
According to Eric Herrenkohl in “How to Hire A-Players,” it is important to not take your “A-players” for granted. This is includes recognizing their valuable contribution to the business. Having a conversation with the employee is the first step. This lets the employee know that they are being thought about and appreciated. Let them know you are interested in their future plans. This conversation can provide valuable information on their thoughts about their future. A manager would want to find out whether or not they plan to stay with the company. It also helps for future planning. Although it may look static on a piece of paper, an organizational chart is more like a chess board. Changes will be made and the owner or manager needs to be ready. By having employees in the organization on the “bench,” this could help backfill vacancies. Valuable employees appreciate knowing that their career has direction. According to Valerie Bolden-Barrett from HR Drive, lack of career development was the top reason for employees leaving their company in one study.
In today’s economy, jobs are plentiful. I know business owners that have problems with employee turnover. Another hiring manager will offer a small raise in pay and they will leave their current job. If the employee is indeed an “A Player,” then you will want them to know their value to the organization and how their career will reap long term benefits by remaining loyal.
I heard many people say that they have left their job because they did not like their boss. Open and honest communication should be made between manager and employee. Concerns about the job can be addressed immediately this way.
“Each time a startup hires a new employee, it faces a choice between hiring a specialist, who can usually be counted on to do a specific task well, or a flexible generalist or jack-of-all-trades, who cannot do any particular task as a specialist could but can move across multiple tasks more effectively than a specialist would.” (Herrenkohl, How to Hire A-Players,2012)
In the beginning of a startup, usually generalists are hired. There are multiple tasks to be handled, but the cash flow has not begun yet. As the company grows it is important to make sure those early hires are moved into a specialist role. Identifying their natural talents and moving them into such a role will increase employee satisfaction. In addition, one can usually perform one skill very well as opposed to multiple tasks mediocre. As the startup matures, there is likely to be specialist positions that are established. This changes the recruiting dynamic completely. Now the hiring manager needs to look for a candidate that is proficient in that functional area.
As the specialist becomes more proficient in their area, they expect more compensation which is another reason why there tends to be more specialists in a mature startup.
I have created a plan for NC Aerial Images in this entrepreneurial planning course. This plan looks great for a mature company that has been in business for many years. However for a hypothetical startup, it seems unrealistic. That is because timeliness is important. An owner needs to be ready to bring others into the business if the situation is correct. If there is not enough cash flow, then an employee may not be feasible, but perhaps the meeting the right person can be involved other ways such as an investor, advisor, or even partner. A Founder needs to remain flexible and think long term, but at the same time understand budgetary concerns of the business.
References:
Employee Retention Now a Big Issue: Why the Tide Has Turned, Josh Bernsin on LinkedIn, August 16, 2013
Employee Retention – The Real Cost of Losing an Employee, Christina Merhar, PeopleKeep, February 4, 2016
How to Hire A Players, Eric Herrenkohl, 2010
HR Drive, Study:Turnover Costs Employers $15,000 per worker, Valerie Boden-Barrett,
Deciding which partner takes on which roles can be an ordeal in any startup. Although a title might not mean much amongst close friends, it can cause chaos soon into the start of the operation. Friends that are starting a company usually take a more “egalitarian” as opposed to a “hierarchical” decision making approach. It is important to define roles for functional areas that one is going to handle. Once the title is decided, it is more important to decide on the responsibilities that go along with the title. Knowing that when situations arise they can be properly handled by the appropriate person is key to a well oiled machine. In the event the partner or employee leaves the operation, there is an established position with clear responsibilities in place. This will allow for a more seamless transition to the new employee.
In the example of a startup that has multiple partners that are close friends, it may be difficult to decide on who will have a “Chief” title. Noam Wasserman answers that question in “The Founders Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup.” First the level of commitment needs to be determined. If one of the partners holds on to a “day” job, they may not be the best person for the title of Chief Executive Officer. Noam Wasserman also suggests that it should make a difference who the “idea person” is to determine position. It only makes sense that the person the came up with the idea will be the most passionate about the business. Wasserman also mentions in his book that consideration of human, social, and financial capital should also be considered. The more a cofounder brings to the table, the more his collateral will be worth to the startup.
In order for the startup to be successful, it is important that the person that came up with the idea give up some control of key functional areas. In other words, he should not have total control with the CEO title. As discussed in previous posts, allowing oneself to maintain total control can actually lead to less growth in the company. This is because a CEO usually does not have all of the skills and assets to bring the new startup to immediate significant growth.
I have indicated throughout this post that it is key to a startup to have clearly defined roles. However, it is also important to be flexible enough to allow for evolution of an organization. Situations change constantly. The growth of the business might be faster than you expected. In this example, the founders may have to add people to the organization. What would happen if the founders suddenly met someone who had tremendous social capital in their industry? An adjustment would need to be made in the organizational structure.
I am not advocating for either an egalitarian or hierarchical approach to creating roles within a brand new startup, but it is necessary to properly define roles and responsibilities. It also important to remain flexible for changes the startup will inevitably make.
References
A Founder’s Dilemma’s: Anticipating and Avoiding the Pitfalls that Can Sink a Startup, Noam Wasserman, 2012
When faced with hiring decisions, the resume is the first place many hiring managers turn. It provides much of the basic information that a prospective employee requires. Their educational background and relevant work experience are all important to a hiring manager and are available on any resume. But there are qualities that a person could posses that are invaluable to a business that a candidate could posses. Life experiences that create quality character are one example. In “How to Hire A-Players,” Eric Horrenkolhl discusses hiring waitresses that are single mothers. People that have gone through tremendous life challenges could have a work ethic like no other.
In my previous personal experience as the manager of a retail paint store, I can say that it far better to wait to find the right person than hiring the first person that comes through with a half way decent resume. There have been many hiring managers that have made a rash decision at hiring someone just to fill a position. Although there might be pressure to hire as soon as possible because there is work to be done, having the right employee in place saves time in the long run.
Hiring the right person for the job comes down to understanding your company’s core values. Asking the candidate for examples of experiences that relate to the company’s core value will identify skills that you cannot teach. Hiring individuals with the kind of skills that cannot be taught saves your company time and money. It is loosely relatable the statement Eric Herrenkohl states in “How to Hire A-Players.” In Chapter 1, he implores the reader to “Stop trying to turn c-players into a-players.” I don’t believe the other is saying that he does not believe in coaching employees. As well all know, a great coach is paramount to any winning team. I believe the author is saying that is far easier to hire the candidate with the necessary basic skills and values than teach them once they are hired. It is near impossible with the unteachable skills. Caring about the quality of your work and passion certainly are not going to be learned in a conference room.
The pharmaceutical company Merck has several core values. One of the core values is related to diversity and teamwork. “Our ability to excel depends on the integrity, knowledge, imagination, skill, diversity, and teamwork of our employees.” This value is stated on their website. Knowing this information can help a recruiter to decide on interview questions. For example, a hiring manager or recruiter might be interested in hearing about a time the candidate worked on a complicated project in a team environment. Integrity is also a value in Merck. Another example of an interview question might be “tell me an example of an ethical dilemma you encountered and how did you handle it?”
Although it is difficult to identify skills that you cannot teach, it is well worth the extra effort to find that person. Passion, commitment, teamwork, and integrity are all qualities that you cannot teach. These qualities are just a few of many. Finding the right person with the intangible skills can make a difference for your life and your customers. It will allow you, as a manager, to pursue other avenues to grow the business instead of extra supervision and coaching. You will also be able to relax properly when you are not on the job because you will not be worried about the business.
The spreadsheet I created references 5 categories of employees making it easier to determine which area of management will be responsible for the employee. It also allows for the creation of additional functions within each category as the operation grows.
It is important to provide a competitive salary for employees. This will attract the best potential candidates. However, because payroll is a such a major expense for a business, it is also necessary consider the company’s bottom line.
I researched average salaries for each position. I found that many sources will having varying average salaries. For example, glassdoor.com listed the average salary of a sales manager to be $68,957. U.S. News and World Reports listed the same position to have an average salary of $137,650. There are many variables in researching salaries. The same position within different industries could vary greatly in compensation. Also pay scales are different based on geographic region. In addition, job title makes a difference when researching salaries. In my organizational chart, I listed two accounting positions. I intended for these two employees to cover various bookkeeping tasks. This would included accounts receivable/payables for one position. The other would take care of payroll. There is a large difference in average salary for an accountant and payroll clerk.
For this project, I decided to use Glassdoor average salaries for all positions. They seemed realistic for the model that we have been provided. In addition, to keep employees loyal, many are incentivized by annual increase in salary. By stating at a lower salary, annual increases are more affordable for a startup.
The sales positions are the most difficult to monetize. I used an average salary for the spreadsheet but most employed in sales are motivated by additional incentives. In my research and drawing on my own experience, companies will primarily use monetary rewards as additional incentive. This might include a 5% commission on sales made by an individual representative. Sometimes non monetary incentives are used such as merchandise and other non cash cash gifts, but cash incentives seem to motivate most individuals in this profession.
The salaries listed are only payroll expense. They do not included other benefits the employee may be entitled to receive.
Assembling a team is a difficult task. Many considerations need to be made. This was true of the 1980 USA Olympic hockey team. The head coach, Herb Brooks, had the difficult task of selecting the best amateur hockey players from around the nation. At first the team did not work well together. This was because there were players with different personalities and backgrounds. This is the problem with not having a homogeneous team. The benefit is that each player brings an important element to the team. As history holds true, having players with strengths in different areas, allows for the team to achieve its goals.
A leader needs to understand the value structure needed in a teammate. This means deciding on what Noam Wasserman in “The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls that can Sink a Startup” describes as “non negotiables.” According to Marillyn Hewson, Chairman, President, and CEO of Lockheed Martin, “Lockheed Martin’s core values are non-negotiable: do what’s right, respect others, and perform with excellence.” These are values that all Lockheed Martin employees must possess. Finding employees with these core values begins with the selection process. According to Eric Herrenkohl in “How to Hire A-Players” you should “find a large pool of people who have the basic skills and hire the best. That is a simple formula for consistently hiring A-players.” This means consistently talking to people that you think may be an asset to your company. Basic skills should include core values. The right questions in the screening process will reveal the best candidate that also has the values the company requires.
It may be tempting for a small business owner that is trying to assemble a team to hire people that are from similar backgrounds. Many times family and friends become part of the business. In the short term, this seems like a good idea. Since there is a previous personal relationship, it is less likely that there will be personality conflicts. Most people feel very comfortable with family and friends. This comfort level may make them more likely to make an assumption of how a person might feel about a situation. Family might be more likely to act on their own without consulting others. In addition, formal agreements are not likely to exist in a friendship. This leads to misunderstandings.
Cultural differences can also effect team cohesiveness. In ”The effects of Team Composition on Multicultural Group Reference” the authors researched how one communicated compared to participation in the group. They compared a group with similar backgrounds with a variance in cultural background. As to be expected, when one was within their cultural group, there was a higher level of participation.
Wasserman suggests finding “people that have diverse backgrounds, but share certain core values such as risk tolerance, commitment level, value system, and personality” is the best model. Having teammates that are similar in social circles and back grounds will not allow the team to gain valuable social capital. In addition, knowledge and skills might be duplicated in teams that are extremely homogenous. Finding the right balance of diverse backgrounds and core values is the best way to mitigate the risks taken seeking members of your team.
References
Trust Builds Value in Business Ethics Programs, National Defense, Marillyn Hewson,
May 1,2015
How to Hire A-Players, Eric Herrenkohl, 2010
The Founders Dilemmas: Anticipating and Avoiding the Pitfalls that Can Sink a Startup, Noam Wasserman, 2012
The Effects of Team Composition on Multicultural Group Reference, Jolanta Aritz, University of Southern California, Robyn Walker, University of Southern California, September 1, 2007
Master of Entrepreneurship Website for Mike Weimar 