The secret formula every manager needs to know to inspire their troops.

The best business idea in the world is doomed to fail if you don’t have the right people on board. It can be a case of right idea, right place, right time, but if you’re carrying dead weight, then, well, you’re dead in the water. Hiring is often the most expensive process any new business will undertake. Forbes recently reported that the cost of taking on a single employee is around $240,000, while the US Department of Labor estimates that the price of a bad hire adds 30 per cent to the cost of their salary.

The financial cost of a bad hire may be quantifiable, but what is harder to put a figure on is the impact it can have on company culture. Similarly, finding an amazing team member has a multiplier effect. Building a winning team is clearly one of the most important skills a business leader can develop, but it’s a minefield. Not only do you need to look at the potential hire in question, you have to take into account how they’ll interact with the existing team and whether they have the skills your business will need in five or even 10 years’ time. Here, we take a look at some of the secrets of success.

Building the best team in the world will get you nowhere if you’re a rubbish manager. As we explored in a previous column, there are many different management styles out there, but what differentiates an OK leader from a KO one is the ability to adapt management style to different situations. This “situational approach” is increasingly fashionable in management circles, debunking the myth of the charismatic dictator and replacing it with a flexible empath who takes into account individual employee experience, organisational culture, trust levels and numerous other variables in deciding how they interact with different members of their team.

A recent paper by Ms Martine Haas and Mr Mark Mortensen published in Harvard Business Review, based on 15 years of research across 4,200 studies, found that the best managers create “enabling conditions” rather than flamboyant leadership. The researchers break this down into four areas: providing a compelling direction, a strong structure, a supportive culture and a shared mindset. Work on these four conditions and your team has the best chance to thrive.

Last year, Google announced (to much fanfare) that it had cracked the code of the perfect team. After three years of intensive research by some of the tech giant’s brightest statisticians, organisational psychologists and engineers, Google found that the success of a team has very little to do with the individuals in it. In fact, teams made up of the best-qualified show ponies often dramatically underperformed, being beaten by teams of seemingly average employees. Codenamed Project Aristotle, what the research found was that a group’s average emotional intelligence and degree of communication were the definitive factors in success. In other words, it was the company’s mantra of “be nice and join in”, otherwise known as displaying “Googliness”.

As saccharine as that may sound to those of us outside Silicon Valley, focusing on emotional intelligence rather than conventional qualifications is crucial in building a strong team. The amount of time workers spend in collaborative activities has ballooned by more than 50 per cent over the last decade, according to Harvard University, and many employees spend three-quarters of their day communicating. In this situation, exceptionally smart but awkward people can hobble a group’s collective intelligence, while less intellectual but more socially sensitive types will boost it. One way you can screen for social sensitivity is by asking prospective employees to read emotion through the eyes (there are several free online tests), a standard psychological test of empathy.

It’s tempting to hire in your own image; after all, if you’re building a team then you’re presumably pretty good at what you do. You know that someone with similar attributes will be able get the job done and what’s more, you’d be happy to go out for a drink with them. It’s no wonder that so-called “mirror hiring” has become endemic, leading to monocultural boardrooms (there are, for instance, more men called John leading FTSE 100 companies than there are women).

Even if you’re a cold-blooded dinosaur with no interest in equal opportunity, this corporate inbreeding should worry you. It leads to a “group think” situation, where your team is unable to assess a new situation or opportunity from multiple perspectives, which should be particularly alarming in today’s age of filter bubbles where we’re constantly served a skewed view of the world. Hiring to your weaknesses rather than strengths will mean that you have a devil’s advocate at the table to challenge assumptions and develop ideas.

Creating a diverse team is not political correctness; it’s a strategic decision for the future health of your business. But how can you make sure you get the mix right? One popular way of approaching it is to break personality types down into five core areas: those focused on results, relationships, process, innovation and pragmatism. These are five key qualities that any team needs, so if yours is skewing too far in any one direction, make sure you balance it out with your next hire.

There is no such thing as a perfect hire – only the perfect hire at that moment in time. Your business will change as it grows and what you need from an employee in a three-person startup will be radically different to that in a 3,000-person multinational. A good manager and successful team builder understands that great hiring is a moving target, constantly reassessing what is needed at different stages in company growth.

At the startup stage, you’re looking for generalists who are able to muck in on a wide range of tasks. The chief technology officer may be required to put up bookshelves, while the CEO is occasionally called upon to replace the toilet roll. The most important qualities at this stage are dynamism and vision, as these early hires will set the tone for future company culture.

Once you become a small-medium-sized business of 10 or more employees, you’ll need to focus on more specialist hires. It’s advisable to leverage the personal networks of your core team in finding new talent at this stage, so as to keep a coherent company culture, but you’ll also need to invest in skill sets that you may have no direct experience of at all. This is the crucial stage in scaling up the same values that you laid down as a startup – read our recent company culture column for more tips here.

As you mature as a business, you need established systems and hiring funnels so that you can make a precise forecast of how much it will cost to make a new hire and how long it will take. You need dedicated personnel functions such as people managers or in-house recruiters, and will have to accept that there are large parts of the business that go beyond your specific skill set. So ultimately, the true test of how good you are at building a team will be your ability to let go a little, and trust that the foundations that you laid mean you have excellent people looking after growth for you.

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