New venture team success requires collective ownership—with boundaries, study says
A sense of collective ownership is crucial to a startup team's success. The energy and enthusiasm that come from working toward a shared vision can be powerful. But how an entrepreneur interacts with a team to build a sense of ownership can make a big difference, according to new research from the McCombs School of Business at The University of Texas at Austin.
The most successful startups have leaders who both seek input and set boundaries with their team members, the researchers found.
The research, "On the Emergence of Collective Psychological Ownership in New Creative Teams," by McCombs Assistant Professor of Management Stephen Gray, along with Andrew Knight and Markus Baer of Washington University in St. Louis, is published online in advance in Organization Science.
"To get others to feel like, 'This startup is really ours,' the team needs to have their fingerprints on the idea," Gray said. "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, entrepreneurs 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 said.
The authors conducted research at Startup Weekend, a series of worldwide entrepreneurship competitions, by collecting quantitative data such as surveys, video pitches and judge ratings from 89 teams. They explored how entrepreneurs' help-seeking and territorial-marking behavior affected each 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).
Leaders who had upfront conversations about boundaries minimized conflict. Those who solicited team input encouraged collective ownership. 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 lessened team conflict.
The researchers found that establishing limits signals the entrepreneur's psychological investment to new team members. When an entrepreneur shows he or she cares about an idea or part of an idea, the team notices. Team members are therefore more willing to invest their time and resources to turn the idea into a reality.
"The best entrepreneurs can strike balance," Gray said. "It's somebody who's a little bit assertive and directive but not overly so, and somebody who's a bit collaborative but not overly so. That's really the blend that you're trying to find as an entrepreneur."