Picture two startup founders, each leading a newly established team tasked with launching the entrepreneur’s idea.
The first entrepreneur lets the team members know their input is always welcome: No change to the business concept is off limits. The second entrepreneur, however, doesn’t want any team input: The team’s job is to simply execute the entrepreneur’s vision.
Which approach is best for inspiring a feeling of collective ownership — and driving eventual startup success? The answer is a combination of both, according to new research from Steven Gray, assistant professor of management at Texas McCombs.
“To get others to feel like, ‘This startup is really ours,’ the team needs to have their fingerprints on the idea,” Gray says. “Not just building it up as it currently stands, but actually shaping, maneuvering, and influencing some aspects of the idea.” Such requests for team input on the startup idea are labeled “help-seeking” behaviors.
But being too open to team input has its drawbacks. If they want to prevent disagreements, the entrepreneur must set boundaries around soliciting feedback on those parts of the idea they want to keep unchanged. The researchers call these “territorial marking” behaviors. They were found to be beneficial for startups. “Team members respond positively to a leader who sets clear boundaries,” Gray says.
Studying Startup Teams
To reach these findings, Gray and his coauthors, Andrew Knight and Markus Baer from Washington University in St. Louis, looked closely at entrepreneurs and the new venture teams assembled to launch their ideas.
“Our study was really trying to peer into those first days, weeks, and months to get a sense of what types of challenges teams are wrestling with.” — Steven Gray
They also wanted to examine entrepreneurs’ feelings of psychological ownership, often exemplified through the use of language when describing personal attachment to their creative ideas (such as describing a startup as “my baby”).
The researchers conducted their first study at Startup Weekend, a series of worldwide entrepreneurship competitions, by collecting such quantitative data as surveys, video pitches, and judge ratings from 89 teams. They explored how entrepreneurs’ help-seeking and territorial marking behavior affected the team’s feelings of collective ownership and, ultimately, the team’s performance in the competition.
Entrepreneurs fell into one of four behavior types: About a quarter kicked off their team’s work without having any initial group conversations around the startup idea; a quarter proactively solicited input on all aspects of their idea; another quarter engaged in “territorial marking” behavior, inhibiting team member input on the startup idea; and the final quarter struck a balance, being simultaneously collaborative on some parts of the idea (e.g., product design) while also being protective of other parts of the idea (e.g., target market).
The team leaders minimized conflict by having up-front conversations and encouraged collective ownership by soliciting team input. And despite the researchers’ predictions that help-seeking behavior by startup founders might “over empower” team members to make unsolicited changes — potentially causing conflict with the entrepreneur — the researchers found that such behavior actually lessens team conflict.
For the next phase of their study, the researchers interviewed and observed participants (students, faculty, and community members) in the Hatchery, a Washington University startup program. The researchers wanted to hear multiple perspectives on precisely why these two behaviors impact new venture teams.
They were able to do just that. In a series of interviews and observations, the researchers were able to pin down how these two behaviors affected the startup team. For example, one of the founders was a scientist who discovered a compound that generates a low-grade electric charge when it touches human skin. She was also a fitness enthusiast, and wanted to put the unique material into fitness trackers so the devices could self-charge as people wore them. But before the entrepreneur established any boundaries or solicited team input on certain parts of the idea, her team began proposing a range of other uses for the new material, like self-charging headlamps for cave exploration. The scientist grew unhappy with this new, unwanted direction.
“She was very frustrated by this, and eventually it soured the team,” Gray says. The group disbanded soon after.
But other founders established clear boundaries early on. Another entrepreneur wanted to create a fun, outdoor activity community for white-collar workers. He was clear about keeping those elements unchanged, regardless of the potential for greater profits. Nevertheless, he asked for team input on elements like the marketing plan. “He articulated what was off-limits but also what could change,” Gray says. The business eventually launched successfully, among less than half of the program’s startups to do so.
Why Boundaries Help
How do the researchers explain the benefits of boundaries? They believe setting limits achieves two important functions for early-stage teams.
The first was something the researchers expected. “It was mainly about helping team members avoid conflict with the entrepreneur, even when they’re just trying to figure out what’s okay and what’s not okay,” Gray says. “It’s articulating that so team members don’t step on the entrepreneur’s toes.” Teams find it easier not to cross any boundaries when they’ve first been clearly marked.
Second, somewhat unexpectedly, the researchers found that establishing limits signals the entrepreneur’s psychological investment to new team members. When an entrepreneur shows they care deeply about an idea (or part of an idea), their team notices.
“It tells you that I’m bought in, I’m sold, I’m committed to this. So you should be too.” — Steven Gray
Team members are therefore more willing to invest, including their time and resources, in order to turn the idea into a reality.
Entrepreneurs can also reduce conflict by approaching the team for their input. “It creates an expectation among new team members that any time that idea is going to change, the entrepreneur will be the one who initiates those conversations,” Gray says. The team becomes less likely to take it upon themselves to make unapproved changes.
The findings suggest advice for entrepreneurs. First, clearly establish what’s allowed and what’s not. “Articulate that very early on to your team,” Gray says. For team members, Gray recommends being cautious about making unsolicited adjustments to the idea, since they could produce conflict with the entrepreneur. If something designated off limits must be changed for the survival of the business, team members need to come prepared with more than just a rational explanation. “It’s about the bond or personal feeling that the entrepreneur has to that thing, and being sensitive to that,” Gray says.
Dividing the Pie
To explain his findings, Gray uses the metaphor of dividing a pie. Entrepreneurs should offer some pieces to the team (help-seeking), but also keep some for themselves (territorial marking): If the founder gives their team everything, they’re left with nothing and might feel unhappy. It’s a process of give and take.
The best entrepreneurs can strike the balance. “It’s somebody who’s a little bit assertive and directive but not overly so, and somebody’s who’s a bit collaborative but not overly so,” says Gray.
“That’s really the blend that you’re trying to find as an entrepreneur.”
“On the Emergence of Collective Psychological Ownership in New Creative Teams” is online in Organization Science.
Story by Jeremy M. Simon