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What I Learned: Cut Misfits Loose

Plus, the conversation you must have with yourself before embarking on a life of an entrepreneur

What I Learned: Cut Misfits Loose

Paul Chipperton, a lecturer in strategic innovation, entrepreneurship, and marketing at Smith School of Business, has been a serial entrepreneur in the life sciences and IT for more than 25 years. In conversation with Smith Business Insight, he offers advice to wannabe entrepreneurs on how to build a start-up team and how to fearlessly trade a corporate career for an entrepreneurial enterprise.

The Fit, the Unfit, and the Misfit

Fifteen years ago, one of my MBA profs at McGill said there are three broadly different types of people that you work with in a company. Especially within the context of an SME (small and medium-sized enterprise), it’s up to you as a leader or manager to sort them out successfully to ensure a productive and happy organization.

There are the Fit: those are the people who fit culturally and intellectually, and they're going to kill it. There are the Unfit: those may fit intellectually but are unfit culturally or vice versa. If they’re going to ruin your team’s productivity, culture, or morale, you must act in everyone’s best interest and let them go. Both types are easily identified in the first months after hiring.  

You must, however, be most careful about the Misfits. Misfits look and talk like they have the intellectual capacity to do the job but you slowly find out they really don’t. Or they intimate they have the cultural fit but it becomes evident that it’s not the case. Misfits accidentally become a management time sink; you spend increasing amounts of time with them and their managers and peers trying to work out how they can better mesh within the organization. You ask them to do X and they kind of do Y, and then say it's a miscommunication but they'll do better next time.

You spend an enormous amount of time trying to work out how to transform Misfits into Fits. Well, you shouldn't. You should get rid of them.

Misfits can kill a company, especially resource-strapped entrepreneurial SMEs

Some will think this is an obvious statement. Surely management is fundamentally about the expert management of human resources to deliver a smooth-running business. It may also sound brutal, but Misfits can kill a company, especially resource-strapped entrepreneurial SMEs.

In an entrepreneurial company, someone who’s a good fit will say, ‘I'd love to do that, but I want to do more.’ And I'll say, ‘This company’s growing so fast, if you kill it doing this initial thing for the next six months, I guarantee there will be seven roles you could step into, and continue to grow and enhance your career and competencies super fast.’ A Misfit will say, ‘That sounds great.’ You'll hire them, and when they're working in your company, they'll say, ‘That's not in my job description, I'm not going to do that.’

Misfits are disasters for company culture, and in an entrepreneurial entity the right shared culture is crucial for eventual success. All it takes is one person to blow it up, and they can negatively and permanently impact productivity and a tightly-knit team’s psychological and physical health. It really can be that stark an impact.

Savour the Fear of the Entrepreneurial Unknown

You have to get your first job, but then you have to critically think about whether you’re enjoying yourself going into a third year of doing Excel spreadsheets or branch customer engagement. Is it really important to you, deep down? Because what you're effectively doing is having the conversation with yourself about how you want to live your life.

What is the opportunity cost of leaving your job after three years? Maybe it’s $45,000 or $95,000. So if you're happy, your intellectual conversation is, ‘I'll do another three years at this bank. I'll get an MBA. I'll earn six figures and do corporate banking or product management the rest of my career. I'll get a pension, profit sharing. I'm going to do this for 30 years and retire.’

Then you have to ask yourself: ‘If I give this up and walk away, what are the implications, not just in terms of dollars but IQ and especially EQ? What is that opportunity cost?’ You have to own the decision, knowing that what you're planning on doing — walking away if that's what you want to do — will be scary. It'll be a step into the unknown. You have no idea what's going to happen next. And you should do it anyway. Because guess what? Living a life without any risk is terribly, terribly boring.

Look fear square in the face and say, I'm going to do it anyway. What's the worst that can happen?

People say, I'll be entrepreneurial later. And then they start paying off debts, marrying, having kids. They build up massive life-long debt obligations. If you're not willing to take the risk at 25, you're definitely won’t be willing to take the same risk at 45. So just do it. Now. Look fear square in the face and say, I'm going to do it anyway. What's the worst that can happen?

If you commit to that fear and take the step, you rarely look back and say it was a bad idea. I don't know anyone who began a startup or SME that's been successful — or eventually blown itself to smithereens — and not thought, ‘I learned so much about myself and business, and I was the master of my own destiny the whole way through. Now I know, next time will be even better.’ And then they go on to do something entrepreneurial again, or return to a slightly safer and more structured multinational, but have a natural advantage over their peers, knowing what real leadership and execution are all about.

Once you've tasted that initial fear and overcome it, it is unbelievably addictive and rewarding to be living your own life, on your own terms, crafting your own future.

Interview by Henry Tian and Michelle Ye