Two traits that separate high performing teams from the rest

I’m lucky enough to get to see dozens of companies at the beginning of their entrepreneurial journey. I think I get to see the best (and worst) of founding teams, often before they find their groove.

Here are two traits I’ve observed in top-performing teams that can be readily replicated.

Iteration and incremental improvements

Once upon a time there was “the plan”, but to meet the real world it required adjustments. Maybe changes to the product, the marketing, the team, the sales strategy, or even an existential crisis around the viability of the solution or suitability as founders to a long entrepreneurial journey.

What to do?

Ben Armstrong at SmartCompany’s Scale Up event in Melbourne. Source: SmartCompany

The team might strategise, ask some experts for advice or even panic a little. No doubt they will have some ideas about what needs to change. There is a natural bias (particularly from ex-corporate folk) to look for a silver bullet/big solution. Nearly always it is better to form a hypothesis about what might be wrong and how to fix it, find a way of testing it quickly in a limited way, and look at whether the results prove/disprove the hypothesis.

Smaller, more manageable changes are easier to test and give faster results, allowing improvements to be made earlier. Multiple small experiments might be necessary but hopefully, the combination of small improvements, implemented earlier will, over time, get you back on track. Like compound interest, even a 1% improvement per month can add up to a 12% yearly improvement. By focusing effort on the larger improvements, the gains over time are multiplied (a 10%/m improvement over 200% pa).

Planning and tracking

It might seem safe to avoid making predictions (which are often wrong) or setting sales goals. However, it ultimately undermines performance and can set the wrong team culture.

Not setting goals and measuring performance against them wastes a golden opportunity for reflection about what is working and what is different from expectations. Is there an issue that can be fixed or does it require an adjustment to the plan and budget (particularly hiring)? Do resources need to be reallocated, do initiatives need to be prioritised?

I see teams without clear goals work on what they think is important that day and just work as hard as they can. Often the consequence is burnout and a lack of direction.

Sometimes it’s hard to work out the key things you should track. Start with the basics of customers, revenue, total monthly expenses and months’ cash remaining. Most businesses have specific measures that give greater insight into the trajectory of the business and these too should be tracked.

For most startups, monthly reporting is the best cadence. However, during periods of high stress or change, monitoring key metrics on a more frequent basis can drive momentum by forcing more frequent reflection and realignment.

Ben Armstrong is the managing partner of Archangel Ventures. This article was first published on LinkedIn.