The process of hiring is a complex and potentially dangerous step that all businesses must partake in. Like all decisions in the early stages of the business cycle, short term gains might eventually be offset by long term consequences. In the case of employees entering a firm, a verdict must be reached as to whether an employer can accurately determine the job requirements and future responsibilities that the job will entail.
According to Wasserman there are two types of employees that a potential venture seeks to employ. These employees are broken down into two categories based on experience and potential initial value to the firm. A specialist in a given field is an employee that can step into specific roles and excel immediately without training or oversight. These employees operate with independence and bring with them skills they have gained throughout their career or educational training. The other option when considering employees is the generalist or jack of all trades. This employee has high potential but lacks the specialization that may be required in certain positions. There are numerous benefits and drawbacks to each of these types of employees that can both expedite and hinder the firm’s resources and growth potential.
It is important to note that specialists have worked at other firms in the past and therefore may have baggage coming along with them when entering the firm. One example of this is their proclivity towards expectations that the firm must reach. This can clash with a company culture and cause interpersonal conflicts among the founding team and specialist hire. Another thing to consider is the uncertainty and risk associated with the early stages of a startup. Specialists that have worked for years in a given role may be unable to adapt to a changing environment and fit new expectations set upon them by the startup. Generalists on the other hand may take too much time initially to get “up to speed” with the industry standards. This time wasted can be a crucial misstep on the part of the firm in its early financing or launching stages. Being new in the workforce comes with potential benefits as well. With no previous experience these new employees won’t have any preconceived inclinations on business culture and processes and therefore will see the culture of the firm as a learning opportunity. These people will also be more willing to grow into roles that might differ from the initial inquiry. The final thing to consider between these two types of employees is the pay differential. With experience comes the expectation of higher pay. It is also important to note that established individuals in any industry will have a much higher opportunity cost when leaving a career for another job.
When considering specialists and generalists it is important to deliberate what skills a firm can foster in employees. Limitations on the teaching of these skills can be financial, cognitive or even time restraints but not recognizing these limitations can cost the firm in the long run. Among the most important of traits that cannot be taught is proactiveness and loyalty. If a firm doesn’t have go getters that are willing to work hard for the chance of advancing both their careers and the firm’s success than they won’t be able to learn the firm’s responsibilities quick enough to play their part.
The final thing to consider is like last week’s blog post. In teams that are comprised of similar skills and experiences, a founder may find that as the venture grows the variety of jobs they initially prospected may shrink into a few roles that share responsibilities. During early stages of the business, role dilemmas may become a dire situation as shared attributes may cause employees to compete where coercion is necessary. If these employees have already been working for the firm for a given period, they may be difficult to lay off or fire. This additional high cost on the firm will cause a drain on resources that must be used effectively in this critical stage of the business cycle.
In conclusion I would suggest that a firm hire a specialist to run a team of generalists to maximize the potential of the startup. This would minimize the risk of role dilemmas by having the group managed and observed by a professional that can evaluate their skills and abilities and foster their growth into positions that best match the firms needs. This approach would also offer an incentive for high caliber A-player employees to enter the firm at a lower pay in exchange for the chance to work on a team where they can hone their skills. Finally, these specialist team leaders will free the founder and C- list employees up to manage the behind the scenes matters of the firm.
Tom Green Entrepreneurial Blog 