The Dark Side of Teams

A wise entrepreneur once told me, “The whole art of starting and maintaining a business lies in the management of people. You can have a good idea, but a bad team can screw it up. If you have not so good an idea, but have a good team, you can make wonders.” It’s often said that collective decisions of teams are generally more successful than one person making the decision without consulting the rest. Yet, sometimes, a team can make a bad collective decision. From entrepreneurship to venture capital, we now explore the dark side of teams.

We often hear about how successful teams can overcome obstacles in their startup. Here is a reason why you should believe in teams. You might not agree with me, but hear me out. There are four essentials features of an enterprise: team, business model, idea and cash. To most businessmen, cash is king. However, not many of us have the luxury of cash that can allow us to pursue our business. Then we look at the idea and business model. No matter how good they are, they need a good team to execute them. Hence it remains that team should be the most important feature of every startup. Of course, the other problem which is faced by most Singaporean entrepreneurs is that no one wants to work for startups, because of the lack of or diminished pay and employment benefits. The other reason is that when a Singaporean works for a startup, the bosses make their lives harder by squeezing them off. There is no win-win situation for them. Of course, as the wise people always say, “The pasture is often greener on the other side.”

Even though we speak of the advantages for having a strong team, we should look at the whole thing from the other angle. This allows us to have a good perspective when a good team might slowly corrupt and slip into a bad one. There are no rights and wrongs when it comes to teams, but it is important to have checks and balances. So, we roll out the dark side of the teams:

1. A good team plans well, but they must execute just as well: This is what I call the paper teams. A lot of people like planning because it empowers them to set the strategic directions and give themselves ownership of the enterprise. However, there is the tendency of the members of a good team who end up all as planners rather than people who execute the plan. In a startup, there is no luxury for the team to just plan. It is important that they remember to get their hands dirty. I have seen good planning done by entrepreneurs with their startups, but the moment when they are asked to execute, they start to make mistakes. Most of the time, they erred because they made too many assumptions in their business plan. They forget that assumption is the mother of all screw-ups. Somehow their roles and responsibilities to execute the operation are independent of the original business plan. In such cases, they are not really that good a team after all. A good team can adapt to two good roles: both the planning and executing phases of their enterprise.
2. A good team may make an unanimous decision, but someone has to play the devil’s advocate: If everyone in the team keeps saying yes for every decision, eventually they will end up in making a bad unanimous decision. Why is it so? There is a concept known as creative tension, where a team is split into two to counter-argue each other until they both come to a consensus to decide on the optimal course of action. Notice that I use “optimal” instead of “correct”. When we negotiate a partnership with another organization, it is important to do some due diligence on the other organization. Do not jump to conclusions so early because your organization may not need the partnership. When we raise money from a venture capitalist, we must look at the terms and conditions in the contract carefully. Do not end up signing a contract when your whole team end up becoming employees for the venture capitalist. They may offer you more money, but you must really scrutinize their motives behind those goodies. If the team is strong, they must be able to tolerate the person who’s playing the devil’s advocate and not a destructive influence to the team’s cause.
3. A good team may make mistakes, but they must make a comeback: Some good teams collapse upon failure. The members blame each other and not thinking what the next steps are to ensure a comeback. It is human nature to assign blame to others for the failure of a project. A good team has higher tendency of assigning blame because they have a higher expectation of themselves to succeed. However, failure is part and parcel of life and the real failure of most teams failing to bounce back is the inability of re-organizing their efforts to get back into the game.
4. A good team can resist anything but temptation (cash, egos and power): All it takes is money, ego and power to split a good team. We often hear stories of power struggles in companies when there is a clash between two or a few personalities. The clash of egos are often destructive influences to most teams. If you want an example of a good team, look at the early team of Microsoft (Bill Gates, Paul Allen and Steve Balmer) versus the early team of Apple (Jobs, Wozniak, Markkula). The early team of Microsoft has managed to transit to a much stronger team, in comparison to the early Apple team, that led to Jobs being ousted and the company went into limbo for ten years. This is where loyalty and a win-win attitude needs to be bred among the founders to ensure the maximum winning chances of the team making big leaps for the future. Otherwise, they will succumb to the dark side and fall apart.

So, good teams are not really that invulnerable because they are composed of human beings like you and me. So, be cautious and be prepared for the worst and do your best not to let a good team fall apart.