Entrepreneurial Alignment: Finding Founder-Fit

EAC

I recently presented my initial work on this idea to the International Enterprise Educators Conference (IEEC) in Oxford and this blog is intended as a written summary and supplement for that session.

It is very much a work in progress, so feedback is gratefully received. It’s based largely on my own experience and the experiences of the many entrepreneurs, would-be-entrepreneurs, and supporters of entrepreneurship that I’ve spoken to over the years. I’d like to particularly thank Andy Littledale, Greville Commins, Jack Farmer, Keir Williams, Mark Neild, Rich Littledale, Robin Brattel, and Sam Crawley for their helpful inputs.

Origins

The story starts when I met entrepreneur Tom Savage in late 2018, he talked about how as founder, he’d pivoted a business multiple times before finding a viable market and raised funding. However, in the process of those pivots he’d lost much of his own passion along the way, he felt he was no longer the best-fit for the company he’d founded. Numerous entrepreneurs have said similar things to me down the years, that they or the company has changed over time and that they no longer fitted. This makes perfect sense, why would the initial founders automatically be the best people to run a company at scale, let alone if it went through multiple pivots of vision, mission, and process on the route?

When I work with students on the process of discovering and validating a new venture I often use the ‘holy trinity’ of Desirability, Feasibility, and Viability as the standards by which the idea can be judged; does anyone want it, does it work, and is there a sustainable business model? However, that’s not the whole story; just because it satisfies those criteria it doesn’t mean that anyone can do it… do you have the skills, values, resources, or interest to do it? And if you do today, will you still be the right person tomorrow?

In the Centre for Innovation and Entrepreneurship at the University of Bristol where I work, we’ve started referring to that extra dimension as Authenticity; are you the right person to act on this idea?

Enter Founder-Fit

The first draft of this alignment tool was based on the Value Proposition Canvas; using the simple Venn-diagram-like structure of overlapping elements; how well did the founder overlap with the proposed venture?

The names of the elements have iterated a little over time, but the core ideas and structures have remained. However, it’s use-cases now go sufficiently beyond just the Founder-Venture relationship that it needed a name change; hence the Entrepreneurial Alignment Canvas (EAC).

The Entrepreneurial Alignment Canvas

The Canvas has 2 elements; a Stakeholder element for people involved in the process, and an Organisation element for the venture. Each element has four component boxes which need completing in the context of the people and ideas involved. Each has a number of provocative questions to assist in filling it in.

Stakeholder Element

Ambition
  • What does personal success look like for you (and over what timeframe)?
  • What motivates you to work hard?
  • What role do you want to play in the venture (CEO, CFO, CTO, something else)?
  • What % ownership or control is important (min/max)?
Values
  • What is important to you in your life to acquire, enhance or sustain (ethics, location, lifestyle, status, reputation, people)?
  • How would you prioritise those values? Which trump which others?
  • How far from your values can you stray before you become uncomfortable?
Skills & Knowhow
  • What skills, knowhow, or experience do you possess?
  • What knowhow or domain expertise do you possess?
  • What is your ‘unfair advantage’ other most other people?
Resource Profile
  • What resources or forms of capital can you immediately call upon (economic, social, time, space, equipment and materials)?
  • What resources and skills and knowhow are you closely networked to and can access freely and easily?

Organisation Element

Vision
  • How does the organisation define success over this period of development or operation (and over what timeframe)?
  • What are the Key Performance Indicators (KPIs); how are you measuring success (size of operation, revenues, profits, impacts, reputation, market share)?
Mission
  • What principles or standards are required or important to adhere to in pursuit of the Vision?
  • What makes the organisation different to competitors and alternatives?
  • How will you know you’re meeting your principles or standards every day?
Critical Competencies
  • What skills, knowhow, or experience are required to deliver this organisation’s Vision and Mission?
  • How do those competencies break down by roles and function in the organisation; who needs to be competent at what?
  • What kinds of competencies are required to not just survive but to thrive?
Resource Requirements
  • What resources (economic, social, time, space, equipment and materials) do you need to reach the success threshold for this period of development or operation (i.e. launch or scaling)?
  • How much time does your resource allow you in which to reach a sustainable resourcing position through revenues or further investment?

The EAC use-cases

Provocation and Diagnosis rather than Resolution

At this point the canvasses seem to provide a useful means of starting and framing useful conversations and diagnosing potential gaps and points of tension rather than being able to resolve them – although insights in that regard may emerge from the discussions that take place.

Early research suggests the canvasses are useful in start-up initial planning, in team-alignment activities, in planning hiring, and in planning to raise investment.

A tool that helps start and frame what can be difficult conversations is important for building transparency and trust in relationships between key stakeholders. However, as entrepreneur Jack Farmer put it to me: “what happens if you do flush out misalignment?” My answer is that I would hope that allows the issue to be resolved, but there is a risk it explodes.

Time-frames

The time-frame in which the tool is contextualised is important because individuals and organisations change over time. The competencies an organisation requires change between start-up and scale-up; individuals’ ambitions and values change as they age.

These 3 time-frames may be useful in which to situate the use of the canvas:

  1. From initiation to launch/initial sales.
  2. From launch to raising initial investment round.
  3. From initial investment round to scale.

These are not intended as hard-and-fast boundaries; organisations should consider what are sensible periods in which they have a definable vision, mission, competency and resource requirement.

Balancing of tensions

“It’s all a compromise”, as serial entrepreneur Robin Brattel put it. Having a tool that highlights where those compromises are being made is useful to everyone involved. Ambitions and Values do get watered down, skills and resources do get stretched, that’s all to be expected but it helps to make it visible to all involved. Organisational psychologist Richard Littledale suggests that the canvasses “make existing heuristics more deliberate” which is of considerable value.

Use case #1: Determining alignment between founders

Simply completing and comparing stakeholder canvasses between the founding team will highlight shared and disparate elements. Some diversity is good but serious misalignment is a recipe for future tensions.

Example: what if one founder wants to exit after 3 years and their co-founder wants a job for life? This might be accommodated easily or lead to misaligned levels of commitment and attitudes to future acquisition.

Use case #2: Determining start-up requirements

Simply completing the organisation canvas on behalf of the emerging start-up can help tease out and help clarify inconsistencies between its proposed vision, mission, and competency and resource requirements. The vision and mission exist in tension with the competencies and resource required to make it successful; you may need to revise up the level of competency and resource required for an ambitious vision or revise down expectations in the vision and mission based on realistic expectations of competency and resource.

Example: a particularly rare but required skill-set may be hard to source and lead to a longer time-frame for which there is insufficient resource.

Use case #3: Determining alignment between founder(s) and proposed start-up

Comparing founder(s) profiles with the organisational profile should highlight tensions and gaps. It is likely that there might be misalignment between:

  • Ambition and Vision: fitting a ‘unicorn’ ambition into a one-person consultancy start-up isn’t going to live up to expectations, neither is moderate personal ambition in a start-up that might be expected to require an intensive 100% commitment for an extended period.
  • Values and Mission: squaring a personal environmental ethic with an organisational mission which might be far more watered-down can lead to frustration.
  • Skills & Know-how and Critical Competencies: if you’re delivering a high-tech product without the technical expertise or delivering in a specific market niche in which you do not have experience or credibility, you are likely to be unable to deliver to the expected standards.
  • Resource Profile and Resource Requirement: if you don’t have the capital to survive the process of getting to launch (or to scale) then you’ll run out of runway and crash even if the work was good.

Productive conversations might follow in which organisational expectations are mitigated down and/or new skills and resources are identified as necessary to source.

Use case #4: Recruiting co-founders/employees

If it has become apparent new people are required, often to source Skills and Know-how to meet Critical Competencies, then scoping the requirement and identifying best-fit candidates who also align with the Vision and Mission of the organisation and the Ambition and Values of the existing team is advantageous to prevent hiring ill-fitting people and stirring up unnecessary tension. In this instance elements of the canvasses may be use for determining questions to ask or provide a means of judging candidates in the round.

Example: “better to have a hole than an arsehole” as the saying goes. If in hiring the technical nous that you needed you hired someone who does not buy into the same values or possesses the same commitment as the team then you’re likely going to frustrate everyone and lower productivity across the whole organisation.

Use case #5: Seeking and taking on investment

If it has become apparent that additional (usually economic) resource is required then scoping the requirement and identifying best-fit investors who also align with the Vision and Mission of the organisation and the Ambition and Values of the existing team is useful for avoiding mismatched expectations for return on investment. The canvasses may provide useful questions for determining the likely behaviour of investors.

Example: many start-ups have been scuppered by investors who want different things to the founders; this might include rushing the product out before its ready, imposing particular hires on the team, or trying to cash out at a point where it will crash the business.

Use case #6: Scaling-up

As companies fulfil their initial success criteria (i.e. launching or raising a first round of investment) they may try to scale up; adding team members, taking on new investment, re-appraising their criteria for success. All these processes shift the Vision, Mission, Critical Competencies, and Resource Requirements for the new time-frame. As a result, new gaps and miss-alignments appear between founder(s) and organisations, between the co-founders (who may have shifted their own ambitions, values, skills, and resource profiles in the interim), and between other stakeholders including employees and investors. As such the canvasses provide a means to start having relevant conversations, mapping new positions, and identifying new gaps.

Example: if in the next phase of growth, you need an experienced CEO who is good at delegating power to a dispersed hierarchy and your founding CEO prefers to be very hands-on and runs things very personally then you may be wise to recognise this in advance.

Use case #7: Career Planning

A reversal in perspective of use case #4; rather than using it to hire staff, individual may be able to use it to match themselves to prospective employers and roles. By identifying organisations for whom their Values fit the organisations Mission, or for whom their Skills and Know-how matches Critical Competencies, they are likely to find roles that suit them and organisations that might be keen to employ them.

Feeding-back

If you’d like to contribute to the discussion around names, questions, uses, and more, please email me at dave.jarman@bristol.ac.uk

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s