Thoughts on startups by investors that
fund them & entrepreneurs that run them

5 Dysfunctions That Make Your Startup Unfundable

Every investor I know can tell you at least one story about a great startup team that failed, even though it was well-funded and staffed with qualified and smart people. The reason almost always given is that the team didn’t work well together (dysfunctional). What does that really mean?

In my experience, genuine teamwork is hard to find, and even harder to predict in a new team. A lot of studies have been done on this, and most have focused on recognizing the symptoms of a dysfunctional team, rather than .

Setting Yourself Up for Success – John Huston” href=”;search%3Atag%3A%22structuring-your-business%22″>searching for personal attributes that will likely lead to a cohesive or high-performing team. So I don’t have any magic to prevent this problem.

One of the most popular writers on this subject, Patrick Lencioni, published a book a while back, titled, “The Five Dysfunctions of a Team.” He and others have identified the key functional elements, proposed an assessment methodology, and provided structured approaches to recognizing and fixing the problem when it occurs.

Here is my summary, abstracted from his book, of the top five indications that team dysfunction is occurring:

  1. Absence of trust. In the context of building a team, trust is the confidence among team members that their peers’ intentions are good, and that there is no reason to be protective or careful around the group. In essence, teammates are not comfortable being vulnerable with one another.
  2. Fear of conflict. All great relationships, the ones that last over time, require productive conflict in order to grow. This is true in marriage, parenthood, friendship, and certainly business. Unfortunately, conflict is considered taboo, stressful, and inefficient in many situations, especially at work, so it doesn’t happen when it should.
  3. Lack of commitment. Team commitment is a function of two things: clarity and buy-in. The two greatest causes of lack of commitment are the desire for consensus and the need for certainty. Neither is usually possible. With an executive team, lack of commitment causes irresolvable discord to ripple down through the organization.
  4. Avoidance of accountability. Team accountability refers specifically to the willingness of team members to call their peers on performance or behaviors that might hurt the team. They may not want to risk a friendship, but this ironically causes relationships to deteriorate as team members resent one another for not living up to expectations.
  5. Inattention to results. The ultimate dysfunction of a team is the tendency of members to care about individual status or sub-team status more than the collective goals of the group. An unrelenting focus on specific objectives and clearly defined outcomes is a requirement for any team that judges itself on performance.

If you suspect any of these elements on your team, it’s probably time to dig deeper into this subject, or find some outside guidance before it’s too late. Like so many other aspects of life, teamwork comes down to mastering a set of behaviors that are theoretically uncomplicated, but extremely difficult to put into practice day after day.

Some startup founders try to supersede this challenge by single-handedly doing all the work, or establishing a monarchy where only one voice counts. Neither of these strategies can succeed, since even a small business will soon scale too big for one person to manage everything. So cohesive teams are required, and will normally outperform star individuals.

Remember also that dysfunctional teams are not necessarily made up of dysfunctional people. Getting work done with a team is all about people working with people, and people working for people, toward a common goal. However, here is a way to determine if some people are inherently harmful to your startup.

If you have a dysfunctional team in your startup, it’s your responsibility as the leader to recognize it and act quickly. It is a curable problem, if you step up to it before too much damage is done. It probably means replacing some people or changing their roles, but remember that your investor alternatives are to replace you or stop the funding.

Written by Martin Zwilling

user Martin Zwilling Founder and CEO,
Startup Professionals

Martin is a veteran startup mentor, executive, blogger, author, tech professional, and angel investor. He is the Founder and CEO of Startup Professionals, a company that provides products and services to startup founders and small business owners.

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2 thoughts on “5 Dysfunctions That Make Your Startup Unfundable”

  1. Rick Viers says:

    I love the insight, but how do you really find a good team.  I have great business plan, and
    two committed people me and my old friend the former wal mart greeter, who was once an
    electrical engineer.  I have supporting services, other business owners who are willing to be
    part of the process, but am struggling to find people who are willing to commit themselves to my business.  I would love to have someone who really is passionate about alternative energy join my team.

  2. Anonymous says:

    A dysfunctional team, like a dysfunctional relationship, is the outcome from having dysfunctional members.