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Commentary

How Employee Turnover Can Be Good for Business

Jun 16, 2016

The Entrepreneur Insiders network is an online community where the most thoughtful and influential people in America’s startup scene contribute answers to timely questions about entrepreneurship and careers. Today’s answer to the question “How do you build a strong team?” is written by Dale Chang, vice president of portfolio operations at Scale Venture Partners.

One of the most important parts of scaling a company is building the right team. This can be a big hurdle for an entrepreneur who is used to doing everything—engineering, marketing and sales, finance and operations—by his or herself. While letting go is hard, giving control to somebody else can actually be key to setting up your organization to scale and grow faster in the long run.

As your company gets bigger, you need to be comfortable with the fact that your job will get smaller and more focused. Eventually, you become a manager of people, and then a manager of managers. The team that you've built becomes the single-biggest factor in the success of your company.

Here are some of the factors that I think about when building teams:

Ambition
When starting to scale a company, you need to find team members who have the hunger to make it happen. Experience is important, but without the burning desire to make things happen, the rate of innovation can really suffer. Find people who share the same amount of passion about your mission and harness that energy to lead.

Experience
By building out a team, you are naturally driving a higher level of specialization and thus need to find people with experience and expertise within a particular domain. There is something to be said for hiring a team that has done it before. That being said, though, you don't necessarily want to hire people who are so far beyond doing it themselves. In the early stages of a company, the grittiness and get-it-done attitude is really what will get you to your milestones.

See also: The Quality Every Leader Should Look for in Employees

Work style
In addition to adding people with different skills, look for people with varied work styles and diverse backgrounds that complement you and the rest of your team. You'll need to be very thoughtful about how you manage that, but diversity in thought and experience on your team tends to bring the best thinking and fastest pace of innovation.

Building a team isn't only about assembling the people around you, however. It's also about how you—the CEO, founder, and/or entrepreneur—work with the team to define the culture of the company. Each company will have its own culture, but for me, it comes down to three things:

Communication
Be consistent and clear in your communications. Consistency prevents you from being perceived as leading with a flavor-of-the-week mentality. Clear communication helps your team understand what's expected and how it's measured.

Trust
Be honest about the successes that the team has experienced, but even more importantly, be honest about the mistakes that you and the company have made. Honesty builds trust, which is exactly what you need in a period of change.

Alignment
Make sure that the goals of the company cascade down to the team and are aligned with what they have control over. When the company succeeds, make sure that the team feels like they have succeeded. You'll get much more out of your team if everyone feels like they are having a meaningful impact on the results of the business.

Be ready for turnover in your teams—it's natural and healthy. Just as your company will change as it grows, so should the skills and talents that you need on your team to support that change. Some members of your team will be able to continually grow with the company and augment their existing skills with new ones that the company needs. Others won't be able to make the shift and will move on to help others navigate the same challenges you’ve already weathered. Take these moments as opportunities to assess what new skills, experiences, and cultural aspects you need to drive the next phase of growth.

Dale Chang is the vice president of portfolio operations at Scale Venture Partners. In his role, Dale is a resource for guidance on evolving go-to-market strategies as well as providing best practices and benchmarks across the VC firm’s portfolio.

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