1. Select people who can both communicate and perform well.
Startups can’t afford two or more people for every task — one to do work, and others to communicate results to all constituents. As the founder, you won’t have a finance chief, a marketing staff or a requirements manager. Everyone must know how to listen, talk and write.
2. Look for existing skills and a demonstrated ability to learn.
People who haven’t changed in a while find it harder and harder to do so. If you don’t hear an enthusiasm for new challenges, you won’t find the flexibility you need to anticipate and create the pivots required for success. People trapped by the Peter Principle won’t be happy fixing chaos.
3. Keep the focus on results. Don’t hire or reward for effort.
A common refrain I hear from team members in over their heads is how many hours they work and how busy they are. If you hear that in the interview process, change the subject to results, and then move on quickly to the next candidate. Set your own metrics and rewards to map to results.
4. Practice an “up or out” growth policy to prevent role stagnation.
Look for team members that see every job as a step to a new opportunity as the company grows. Make it clear through your words and actions that you expect upward growth, and no growth is a failure for both of you. The alternative is to lose your best people to new startups.
5. Look for ability to manage a task, as well as do the task.
Some people are workers, and others just want to be managers. The best have done both, and approach every task from both perspectives. Most big company executives have forgotten how to do the work — they make decisions and expect staff members to implement them. This doesn’t work in a startup.
6. Provide mentoring and self-learning opportunities.
Most startups don’t have the time or resources to send team members to formal training classes, either in-house or off-site. Yet every new team member can be assigned an in-house mentor, provided with online seminar opportunities and given special assignments to facilitate new learning.
The hard part for most entrepreneurs is being able to deal immediately with the Peter Principle in team members, once they see it or recognize that they made a hiring mistake. It’s as hard as every other pivot you will have to make as a startup, with the same penalty that the longer you wait, the higher the cost of recovery.
If you as the leader don’t deal quickly with incompetent people in key team positions, they will paralyze your startup. The best people will drift away, and only the ineffective ones will remain. That makes you the final proof of the Peter Principle.
