As co-founder, CEO, and President of her latest venture, NOW Corporation, Lara O’Connor Hodgson has developed unique insights on team building. She was forced to close her first startup, Nourish, because delayed payments from corporate buyers created a cash flow shortage. Hodgson turned that problem into a new business idea. Her new company’s core product, NOWaccount®, is an innovative revenue accelerator system that helps startups survive cash flow shortages that often accompany rapid growth. In four years, Hodgson doubled the company’s growth twice. As she prepares to expand her team again, she and Shikhar Ghosh discuss her experience building strong teams. If you’re hiring new staff, she discovered, growth mindsets may help your startup scale more effectively. Learn why growth mindsets matter more than skills as you scale your startup and build your team.
Hiring for Skill Sets vs. Growth Mindsets
When Hodgson started her first company, Nourish, she was “very intentional about the skill sets of the people that we brought together.” She equates her early approach to team-building with what she learned in business school. When putting together a study group, she remembers, “The first thing you say is do I have the marketing person? Do I have the finance person? Do I have somebody who knows accounting? Do I have an operations person?”
Following that model, when she built her initial team at Nourish, she was methodological in hiring. Functionally, she admits, “it was a dream team. We had people that were great at every function. No area was left untouched.” But what I realized is that mindsets matter more than skill sets.”
You can have the dream team of skillsets but if your definition of success is different or if your personal goals are different, then then the best skillsets don’t matter.Lara O’Connor Hodgson
How Hiring for Growth Mindsets Can Help You Scale
For Hodgson, prioritizing your team’s mindset means evaluating people based on critical thinking skills and soft skills they bring to the table, not just expertise. Learning how to identify mindsets, she admits, takes time and “you have to interview completely differently. You have to look at resumes completely differently.” But the extra time and effort have proved worthwhile at NOW Corp, she explains because skills can be taught. “I can probably teach you to do almost anything I need you to do,” she notes, “But I can’t teach you how to think. And I can’t teach you how to approach a failure or a challenge.” The ability to self-motivate, think creatively, and adapt to adversity all encompass what Hodgson describes as mindset.
Unless I’m doing brain surgery, I can probably teach you to do almost anything I need you to do. But I can’t teach you how to think. And I can’t teach you how to approach a failure or a challenge in a way that moves the company forward.Lara O’Connor Hodgson
Maintaining Diversity & Critical Thinking
Intellectually, we know that a diverse team is more valuable and more productive. And “so we hire people that think differently, that look differently, that speak differently. And then without knowing it, we train the diversity right out.” Hodgson points out the irony in finding a diverse group of people to bring together as a team then proceeding to instruct them, “‘You have to do it all this way.’ You just got rid of the very diversity that you wanted.”
The only diversity that matters is the diversity of thought.Lara O’Connor Hodgson
Trusting Your Team & Letting Go
When your startup reaches a certain stage, in order to continue growing, others will have to assume some leadership. As others begin taking over, Ghosh notes, “It takes a certain kind of person to say, ‘that’s great’ as opposed to ‘I would have done it differently.’
She recalls, “I struggled with that.” Even a year ago, she cringes, “there were times when new people came in and they wanted to do something one way and I said, ‘oh no, no, no. That’s not the way we do it.’ And now a year later, I’m realizing that that was a mistake on my part. If I have to still do it my way then I didn’t hire the right people.”
Now that I’ve hired the right people, I know that I can take their input, give them a suggestion, give them my input and then let them go.Lara O’Connor Hodgson
She concedes that as the business scales, her role as CEO must adapt. At first, she explains, “they needed you to make every decision, to be in every meeting” but having hired her team based on mindset, she shares, “I feel like my team can sit in a room and they have my voice in their head, so they know a little bit about what I’m probably going to say.” They can then develop their own perspective and later, share that with Hodgson. “In fifteen minutes I can give them sort of direction, that before would have taken two hours of my time” because she would have been involved in the entire decision-making process. As the company grows, her role—like any founder-CEO—changes. But hiring a team whose mindsets enable them to independently and understand what’s in the best interest of the company, “Allows them to grow. It allows me to grow. And if I don’t do that, the company won’t grow.”
Shaping Your Team: Superstar vs. B Player?
Many startups are built around legendary founders or product superstars which leads some to conclude that the greatest teams have superstars leading each function. Others challenge that creating a well-rounded team without relying on one ego leads to steady success. Hodgson advocates a hybrid approach.
Initially, she recalls, “I tried to do a whole team of kind of superstars.” But she quickly learned that “you don’t need to have a superstar in every function at the same time.” As the company evolves through its life cycle, different parts of the company may require a rockstar leader at different times.
Not everybody needs to sprint at exactly the same time. It’s more of a coordinated effort.Lara O’Connor Hodgson
“I used to do a lot of sports,” Hodgson elaborates, “There was this exercise that we hated” in which the team would line up single-file and “the person at the back had to race to the front. For that split second, they have to sprint” while the rest of the team maintained a steady pace.
“If the team really wanted to work together, they could all just slow down and walk and make it really easy for the person in the back to get to the front. But they don’t. They have to keep pushing. But not everybody needs to sprint at exactly the same time. I think it’s more of a coordinated effort.”
With that analogy in mind, Hodgson follows a hybrid approach now that combines outliers with “B-players” timing the company’s needs to which type is needed.
Attracting the Right People at the Right Time
In 2017, when NOW Corp did its first bond securitization, finance became extremely important to the company’s well-being. Hodgson prioritized finding and hiring “a real superstar finance person.” She reflects, ” I don’t think we needed him before that and I don’t know that we could have attracted him before that because the problem before him wouldn’t have been that interesting.”
And had we attracted him too early, he would have gotten bored. So part of it is bringing in not only the superstar, but timing when to do so and in which function. But more importantly, she points out, is to not lose sight of fact that the B players—the staff who distinguish themselves not with records but with consistency—are the ones on whom most companies really rely. “The most valuable people in the company are often the B players. If you ask them to step up for a short burst they can, but they’re not really going to take you into orbit. We overlook those folks a lot.”
The most valuable people in the company are often the B players. The ones that are so consistent, they’re going to keep charging ahead. We overlook those folks a lot.Lara O’Connor Hodgson
Hodgson focuses more on recognizing the importance of those B players without whom no company could succeed. She recommends that during “certain evolutions in the company, you can find that kind of superstar role player that you need to take you to the next level.”
- Success comes from having an optimal team.
- Skills are not the most important indicator of future success. Mindsets matter more than skillsets.