Creating the Organization 343Recruiting familiars, however, also has potential disadvantages that arise from the same
sources as the positive factors. Familiars may come with the psychological baggage of
prior relationships in which the parties’ status and circumstances were different. Also, a
familiar may have much the same background, work experience, education, and world
view as the founder. If they duplicate the entrepreneur’s own personal profile, familiars
will not bring complementary skills to the team.
There have been some classic cases of problems and crises over TMT participation in
family businesses. Herbert Haft, founder and chairman of the Dart Group, fired his wife
and son after a personal argument. Ted Turner fired his son Robert from Time Warner’s
Turner Broadcasting System by telling him during dinner, “You’re toast.” Family-busi-
ness expert Wayne Dyer suggests that one way to avert such disasters is to establish a
panel that will pre-decide criteria for judging family members’ job performance. Such a
panel can determine whether a family member is performing poorly and should be fired
or placed in a different job.^12
Unfamiliars are people not known to the entrepreneur at the start of the new ven-
ture. They are individuals with the potential for top management who may have had
previous start-up experience. Entrepreneurs can find such people through personal con-
nections, business associates, or traditional personnel recruitment techniques: employ-
ment agencies, executive search agencies (headhunters), and classified advertising.
Unfamiliars are a potential source of diversity for the TMT. They bring in new views,
skills, and experiences to complement the entrepreneur’s. Their most important poten-
tial negative factor is the lack of a prior working relationship with the founder.
Criteria for Selection. If the TMT is to be highly effective and to contribute substan-
tially to enterprise performance, it should be composed of individuals with either of two
primary characteristics: These people should either personally possess resources that are
rare, valuable, hard to duplicate, and not easily substituted, or they should be able to
help the firm acquire and employ other strategic resources with these qualities.
Good personal chemistry between the TMT candidate and the entrepreneur can be a
factor in selection. It may be reassuring for the entrepreneurs to feel such a mutual affin-
ity, putting them at ease and creating a comfortable working situation that nurture’s the
founders’ talents and creativity.
One criterion to consider is executive intelligence. Executive intelligence is a combi-
nation of emotional intelligence, problem-solving ability, prioritizing skills, and the abil-
ity to monitor oneself and learn from mistakes. These qualities are difficult to measure
in a traditional job interview. A case interview using hypothetical business problems is
more useful.^13
Members of the top management team are frequently chosen for direct instrumental
reasons. Entrepreneurs look for people who in some manner—perhaps through techni-
cal knowledge or functional expertise—complement existing human resources and add
to the resource base. Other criteria include age, education, and tenure. For example, it
has been found that TMTs composed of younger, better educated, and more function-
ally diverse individuals are more likely to promote innovations and changes in the firm’s
strategy.^14 On the other hand, TMTs made up of older, longer-tenured people—people