I spent the latter half of my career as an entrepreneur, building two venture capital backed technology corporations.  These are proper, bricks-and-mortar, hardware-based companies, engaged in the development of real-world, cutting edge products, requiring R&D and significant up-front investment in materials, equipment and people.  Not software-based businesses like BitPerfect.  Both those companies are still operating today, which is not so bad, I guess.

Building companies such as these is largely about building teams.  Sure, the technological smarts that underlie what you do are the fundamental elements, but the success of the enterprise rests firmly on the shoulders of the team you put in place.  They are the ones who do all the real work.  Building an effective team, with limited available time, and having that team execute a complex and challenging mission, can be a source of great personal pride, not only for those who build it, but for the team members who accomplish those goals.

One gentleman, an investor in, and director of, one of my companies, had a lot to say about building effective teams.  He liked to address the employees and tell them how his greatest pleasure in life was working with people and building teams.  He was a great motivational speaker in that sense.  I and my co-founder arranged to spend some quality time with him so as to benefit from his knowledge and insights, so we had a nice, long dinner together one evening.  Over dinner he expanded on his thoughts about effective teams and team building.  In every team, he said, 10% of the team are over-achievers and another 10% are under-achievers.  Team building, in his view, is about identifying and continuously replacing the under-achievers.  Sounds sensible, in a Johnny Appleseed kind of way.

But what happens after you remove the under-achieving 10%, assuming that you have the wherewithal to be able to identify and attract suitable higher-achievers to replace them with?  You will have, on balance, an over-achieving team, no?  Not in his view.  It turns out that you still have an under-achieving 10%.  In his view, he defines the bottom 10% as inherently under-achievers, who need to be replaced.  By continuously following this strategy, your team gets continuously better, no matter that the same performance which categorizes an employee as an over-achiever one year, may see her categorized as an under-achiever soon afterward, and shown the door.  This, apparently, was what he enjoyed when it came to working with people and building teams.  Not surprisingly, he was a big college football fan.

This “giving 150%” type-A personality is something you hear being touted a lot these days as the prototype and paragon of a successful business person and team leader.  Particularly, if I might put it this way, in American corporations.  It is a philosophy that allows arrogant, in-your-face, all-action, breakfast-meeting types to move up rapidly in an organization that doesn’t have an intelligent hand on the wheel.  The core theme of this philosophy is that the problems of the team all boil down to the inadequacies of its weakest members, and that as team leader you will best do your job by continuously and ruthlessly rooting it out.  It is a very useful philosophy, because nothing’s ever your fault.  Let’s schedule a breakfast meeting and we can discuss it further.

The fact of the matter is that sometimes people you hire don’t turn out to be who you thought they were.  A good leader will seek to ferret those people out within their first six months, and will be justifiably ruthless in letting them go if they look like they are not going to work out.  Just bear in mind that unless the person has lied on their resume, the hiring was your bad, not theirs.  Hey, not all of us are perfect, and we are all bound to make some bad hires from time to time.  Hire enough bad people, though, and you need to start looking at your own recruitment methods and skills.  But once a new hire has passed his probationary period, your expectation will be for him to make the mandated contribution to your project.

At this point it is a mistake to imagine that your job then becomes one of making sure your team members continue to get their work done.  That is the difference between a manager and a leader.  A leader is not satisfied merely by achieving objectives A, B, and C, on time and on budget.  A leader will at the same time seek to continuously develop his employees into better and more useful resources.  Instead of continuously measuring up your staff for the purpose of weeding out the bottom 10%, find out what is going wrong and fix it.  Teach them how to be top-10% contributors.  If they grow their skills sufficiently you will have the pleasant task of promoting them, or, if there isn’t an opening, the satisfaction of seeing them advance their careers in an excellent position elsewhere.  Don’t be afraid of losing employees that have outgrown your ability to satisfy ambitions that you have nurtured.  Pay it forward.

A wise man once told me that the most valuable thing you can do as a manager is to groom a steady stream of subordinates fully capable of replacing you.  Effective managers don’t grow on trees.  Rather than making yourself vulnerable to being replaced by one of them, managers who are able to make managers are a particularly valuable commodity.