When you’re deciding whether or not to invest in a company, you go through a meticulous due diligence process. You look at data such as financial statements, projected cash flows, credit reports, contracts, trademarks, and potential exposures from litigations. and credit reports. You may review the team by going through performance reports, psychometric tests, references and review the past experience of the team members. However, we all know that a truly great team is more than a group of great individuals. So why is it that you assess the team largely by assessing each person separately? If you don’t rely on these individual markers, are you relying on your intuition instead of gathering more data? In this article, we’ll show you not only why you should look at the overall team data but also an easy way to get it.
What is a great team?
Let’s take a step back first and consider what makes a great startup team. The nuances of this may vary, but HBR did a pretty good job summarizing the main points in their article “What Makes a Successful Startup Team” last year. According to the article, the traditional answer is:
- Prior startup experience
- Product knowledge
- Industry skills
A fresh review of studies found that this is not enough, and HBR added to the list:
- A shared strategic vision
- Entrepreneurial passion
HBR’s summary serves as an excellent basis for a great team but is still missing a crucial element. Shared strategic vision and entrepreneurial passion only work if the working practices are in line with the vision. In other words, the Organisational Culture needs to support the strategy.
For example, let’s say that you have a growing startup that has made their success thanks to their diversity and innovation. The vision of this startup could be to grow in a controlled way via increasing structure, and clarity of roles. This doesn’t happen through the shared vision alone. In fact, the shared vision could still rely more on the diversity and innovation, and the much needed structure could be seen more as an afterthought. Therefore, it’s absolutely crucial that there are concrete working practices supporting the growth strategy, making sure that vision meets with practice.
The past experience of the team members, the shared strategic vision and the team culture are all essential elements when looking at a great team.
How can I tell if the team is great?
You’re no doubt already taking some of the steps needed to ensure the quality of the team. Would you invest in a team without having a look at the CVs of its members? Probably not.
Do you want to know their vision and their strategy for the future? Most likely. Do you use an objective method to collect unbiased data about how the team members relate to their team, how their way of working supports the overall strategy, and if the team and its practices are ready for taking the next step forward? This is where you may start cutting corners. It might seem easier to rely on your gut feeling, instead of going through the seemingly time-consuming process of collecting actual data or familiarizing yourself with that data well enough to make meaningful decisions.
In our workshop we’ll show you how that is not at all the case. With our due diligence package, the process is automated, and you’ll simply receive the information you need to support you in your decision making. What you’ll get is critical insights into the team culture, working practices, and emotional trigger points, as well as potential warning signs for the future. The only thing left is to understand how to use this information, and we will walk you through this during the workshop.
For those who are interested, we already provide a wealth of information regarding Organisational Culture on our webpage. However, this workshop is designed specifically for investors, and will jump-start your process no matter what your prior experience is.