When you started your venture, what were the initial stumbling blocks that you encountered? Do you remember? Were they market-related, such as a value proposition that’s not compelling enough or the market wasn’t ready for your product, and your timing too early or the market was not large enough? Or was there a glitch in your business model, such as the cost of acquiring a customer outraging the lifetime value of your customer or a lack of scalable ways to acquire customers? Or were you in danger of running out of cash? Or your products did not quite meet market needs because of a strategic market-product gap or poor execution? Often times, it is a weak management team that causes start-ups to fail and that does not adequately manage the aforementioned stumbling blocks.
For almost a year now, I have had the honor and pleasure of working with a small start-up company in the financial services industry. The Frankfurt-based MANUFIN GmbH consider themselves to be an independent value-oriented financial manufactory, focusing on financial analyses for private clients and special insurance products for small- and medium-sized businesses. Check out what they offer here (in German): http://manufin.de.
Matthias Behrendt and Hartmut Herzog had been good acquaintances for a while when they actually joined forces and decided to build a business together. Both of them were equally inspired and energized by their business idea and the sense of freedom that both felt they would need after decades of ‘corporate slavery’ as they expressed it. First and foremost, they got all the formal learning and necessary licenses as well as their IT infrastructure set-up. They refined and played with their initial idea and formulated a strong value proposition. When they entered the German market, they came to realize what clientele they attracted and who worked best for them. MANUFIN’s two managing partners, Matthias and Hartmut, established and continuously enhanced their marketing approach and solid client-centric processes.
Despite their shared passion and vision, and a strong business model, they could at first not value another asset their company held: Their strong, yet diverse, personalities. Working as a team takes time. Trust, openness, relationships and synergetic high-performance are not created overnight. Matthias and Hartmut went through all the team development phases as outlined by Bruce Tuckman in 1965: Forming – Storming – Norming – Performing.
- Forming – At the start of a new or reorganized team, people are unsure about what they are doing, they’re finding their way with each other in terms of relationships and working preferences. Trust is low, anxiety is high and there are little or no measurable accomplishments at this stage.
- Storming – The team may be struggling, it needs to review how it can become more effective. There’s a willingness to exchange information and to try to reach agreement on what needs to be done to make this happen. More risky issues are opened up, which may result in conflict and argument. Trust is shaky but building, and anxiety is reducing. There is minimal performance improvement.
- Norming – As confidence and comfort increase, the team will become more systematic and methodical in its way of working. Trust is high, and conflicts reduce, with higher levels of openness and honesty. Robust debate replaces arguments and people are feeling good about working in the team. Average to good performance is the result.
- Performing – Flexibility is the essence of stage four. Different procedures are adopted to meet different needs and people are less concerned with defending their positions. Team members feel comfortable with each other and believe in the strengths of the team and its individuals. The team is producing good results and is admired. This is your team, a successful team that you have brought to this stage.
In the learning process, we worked with the LIFO® (life orientations) methodology to not only identify and match the MANUFIN team’s communication style but to also hone their approach with clients and prospects. LIFO® is a practical model about what drives people’s actions, and helps understand how teams collaborate or how the business operates on a daily basis. Using the LIFO® method works like a lever in change among individuals, teams and organizations and directly contributes to a better climate for teamwork, effective decision-making and problem-solving. In addition, the method supports conflict management, sales and leadership, something that presented a turning point for Matthias and Hartmut. They would have gone into turf battles without the insight the LIFO® method gave them, as they stated.
As they have been growing their company and customer base from the get go, MANUFIN’s next challenge will be the high cost of labor and to hire the right people (aka “A players”). As the saying goes: “A players hire A players, and B players only get to hire C players (because B players don’t want to work for or with other B players).”
If you are planning to start your business venture or have progressed into the start-up phase, consider working with a coach on the softer (or socio-emotional) side of the undertaking. Contact me.
Wishing all start-ups the courage, persistence and wisdom required to be successful in the long-run, Annette.