Creating the Organization 341
One system for managing organizational performance, based on the work of Kaplan
and Norton, is the balanced scorecard.^2 The balanced scorecard is typically thought of
as a tool of professional management and mature organizations, but the balanced score-
card approach to creating an organization assures that the firm will not lack any key
components of performance and that the different elements of the organization will
work in an integrated fashion.
The chapter concludes with a discussion of the major issues in creating and main-
taining an entrepreneurial workplace. The ethical climate and culture should be consis-
tent with high standards and with the aggressive nature of the business. Entrepreneurs
want the people who work for them to be as motivated, innovative, and productive as
they are. Examples of how entrepreneurs create an exciting environment for their work-
ers are presented at the end of the chapter.
THE TOP MANAGEMENT TEAM
There is little doubt that the top management team (TMT) is a key component in the
success or failure of the new venture.^3 The team is crucial to attracting investors, for in-
vestors look for experience and integrity in management.^4 The team is also a key element
in new venture growth.^5 Without a team to plan, manage, and control the activities of
the growing firm, growth will be limited to what the founder can personally supervise
and manage.^6
The general manager of any enterprise—here, the entrepreneur—has three leadership
roles to play: organizational leader, architect of the organizational purpose, and person-
al leader. When the entrepreneur is putting the TMT together, all these roles are in action
at once. Because the characteristics of the team help determine the venture’s perform-
ance, creating and maintaining the TMT is one of the major responsibilities of the
founding entrepreneur.^7 As the organizational leader, the entrepreneur selects the
members of the TMT and works to blend their skills and expertise to ensure high pro-
ductivity. As the architect of organizational purpose, the entrepreneur is an analyst
and strategist, helping the TMT determine the business’s goals, objectives, and direc-
tions. Finally, as the personal leader the entrepreneur serves as a model for behavior in
the organization.^8 This is the individual to whom people look for leadership in deciding
what is right and wrong for the organization. The entrepreneurial leader creates the cli-
mate and the culture of the workplace and models the ethical standards of the venture
for all to see. The roles of the entrepreneur are summarized in Figure 9.1.
Creating the Top Management Team
A team can be defined as “a small number of people with complementary skills who are
committed to a common purpose, set of performance goals, and approach for which
they hold themselves mutually accountable.” How many is “a small number”? Some
experts put it anywhere between 2 and 25.
9
However, teams with more than 12 to 15
members must generally form subgroups to facilitate communication and decision mak-
ing. Subgroups tend to form hierarchies. The pace of group activity slows down, time
is lost, and the logistics of meeting face-to-face becomes a problem.^10
It is useful at this point to distinguish between a team and a working group. A work-
ing group is a collection of individuals whose jobs are related but not interdependent.
