The Third Cause of Business Failure: The Wrong Team

The Third Cause of Business Failure: The Wrong Team

The third cause of business failure identified in the CB Insights report, accounting for 23% of startup failures, is the wrong team.

We want to examine the issue of business teams from several angles:

• Is a team necessary at all?
• Do we have a teamwork mindset?
• What characteristics define a working team?

There are many possible answers to these questions, and the subject generally seems obvious. But my experience is that failures occur in the obvious things. Whenever we assume something in a business is obvious and quickly move past it, that is where we will be hurt.

If you have hired people and tell them what to do and exactly how to do it, you generally do not have a team. You have employees, which is different from the concept of a team and teammates.

Teams are formed for a particular purpose and are usually dissolved once that purpose is achieved.

The reason for forming a team

The absence of properly defined duties, responsibilities and authority

Why is the wrong team dangerous?

A good idea can bring people together, but keeping them together is not the idea's job. It takes a shared goal, clear roles, trust, skills and discipline.

Does the wrong team simply mean bad people working together? No. Sometimes everyone is good, yet together they do not make a good team. It is like having several sound parts that were not designed for the same machine.

A team is different from a group of people

Several people working alongside one another are not necessarily a team. A team forms when people work toward a defined goal with complementary roles and clear responsibilities.

In a real team, success and failure do not belong to one individual alone. Each member knows their work affects everyone else's results. If sales makes a promise production cannot fulfill, the team suffers. If the technical team builds something the market does not want, the team suffers. If a manager makes an ambiguous decision, everyone suffers.

Signs of the wrong team

• Roles and responsibilities are unclear.
• Members focus more on proving themselves than solving the problem.
• Disagreements are concealed and then suddenly explode.
• Decisions are either too personal or too ambiguous.
• Nobody owns the outcome, but everyone has an opinion about it.

In such circumstances, the team's output suffers even if its members are intelligent and hardworking, because too much energy goes into coordination, misunderstanding and self-defense.

Skill is not enough

When choosing a team, we often focus only on technical skills: a good programmer, salesperson, designer or accountant. But technical skill is only part of the picture.

Can the person accept feedback? Can they work amid uncertainty? Do they behave professionally under financial and time pressure? Do they accept responsibility for mistakes? Are they committed to the team's goal, or only to their own role?

Startups usually suffer more from poor coordination, distrust and individual-centered decisions than from a lack of skill.

Where should we start?

Rather than simply looking for talented people, we must first clarify the goal and roles. Then determine what combination of skill, personality and experience is needed to achieve that goal.

• Write down the team's goal.
• Clarify each person's role.
• Specify the decision-making method.
• Raise disagreements early and respectfully.
• Establish measurable indicators for the outcome.

Conclusion

The wrong team can bring down the best idea. Ideas need people to be implemented. When those people are not aligned, the energy that should drive growth is spent on internal friction.

If we take the business seriously, we must take the team seriously too. A good team does not emerge by chance; it requires design, discussion, transparency and sometimes difficult decisions.