The View from HR

Entrepreneurs face challenges in hiring and choosing how to lead

May 20, 2012 

I like and respect entrepreneurs! They are special people.

You have to respect people who quit a job and pool every dollar they can find (or borrow) to create a better mousetrap! They risk their sanity, family time and long-term economic well-being. Entrepreneurs may experience a string of painful failures, and still they try again.

The same admirable traits that make a person an entrepreneur can also be his or her downfall.

I meet entrepreneurs who are so focused on their idea they cannot see a tree that has fallen across their business plan. Others are so accustomed to doing something with nothing, they cannot transition a small business into a growing, profitable enterprise.

In my view, the two common challenges facing successful entrepreneurs are whom they choose to hire and how they choose to lead.

Whom you hire

Entrepreneurs can be so optimistic by nature that for them hiring is more like speed dating than a business decision. Hiring people who “act and talk like me,” or “like my jokes,” or “went to my school,” or “have never done this but I can teach them,” will often lead to disappointment. Hiring is better viewed as a disciplined process to discover what the applicant has actually done and who they are.

A disciplined hiring process is not fun for most entrepreneurs (or anybody, really), and overconfidence in the ability to read people is dangerous. To make matters worse, an entrepreneur may take too long to correct a hiring mistake and worsen their financial burn rate.

Disciplined hiring requires a specific definition of the role and what must get done. It means understanding good sources of great candidates, both public and networked. It demands adhering to the purpose of this role (or wisely adjusting it) when a merely interesting person comes along. It requires a dogged “show me” mentality to be sure candidates have been-there-done-that. It may mean understanding who the candidates are through assessment tools of behavioral traits and preferences. Bottom line: Be choosy and hire slowly.

How you lead

Most people hired by entrepreneurs do not want to be entrepreneurs. A successful employee and a successful entrepreneur will score very differently on behavioral assessments. Employees need a different type and level of communication, goal-setting, reinforcement, correction and reward systems.

The factors that energize an entrepreneur – such as risk, future rewards, grueling work schedules, reinvestment, wearing too many hats and the crisis-of-the-day – may be the very factors that drive employees nuts. Entrepreneurs do not need much structure. Most employees need to know expectations, priorities, who is in charge and whether they are progressing as expected.

Get help

Successful entrepreneurs seek help from others who have thrived in the transition from garage to storefront. Learn from peer mistakes! Make one of your first hires (or business partners) someone who does not think like you and can bring a reasonable discipline to the unfamiliar world of finding and managing people.

Now, get out there and create opportunities for the rest of us!

Bruce Clarke, J.D., is president and CEO of CAI Inc., a human resource management firm, with locations in Raleigh and Greensboro, that helps organizations maximize employee engagement while minimizing employer liability. For more information, visit www.capital.org.

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