Cofounding Teams Perform Better When They Combine Technical and Managerial Expertise
High growth companies might be the superstars of the business world but they represent only a small portion of the companies in the economy. Most businesses either cannot grow or they decide not to grow which puts investors and policymakers into a difficult situation when they try to separate the best from the rest.
The assessment of the future of a company is based on a variety of factors, the growth expectations of the founders is one of them. Alejandro Campos Sánchez studied the founders of six Spanish businesses to see how their growth expectations were influenced by technical knowledge, managerial skills, and personal values.
Unsurprisingly, technical knowledge and managerial skills were closely related to growth expectations.
Ideally, the founders of a company had both; in these cases growth expectations were high and they were still met. Companies whose founders lacked managerial skills were less successful. They underperformed even if the founders tried to overcome their shortcoming by attending management courses. Gaining experience over time helped but the best solution was finding a partner with a business spirit.
The centrality of work in the life of the founders was also closely related to growth expectations. Founders who put work first usually had higher growth expectations than others but there was an exception to the rule. One interviewee did put work first but still had low growth expectations because he mostly valued the intellectual stimulation of his profession and not the wealth it could create.
Valuing wealth, of course, led to high growth expectations just like valuing independence. The latter, however, might have a negative impact on the actual growth of a company. Founders who want independence often crave control over every aspect of their business which leads to limited growth and, in some cases, the death of the company.
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Contributed by Bence Juhasz.