Panos Panay | Crain's Boston

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Panos Panay

Background:  

Berklee College of Music's Institute for Creative Entrepreneurship is an incubator aimed at encouraging Berklee students to start companies in the music space.

The Mistake:

I used to focus on just filling positions and looking for pedigree versus hiring somebody who you know all you have to do is point them in the right direction.

Right after school, I worked for six years and then I started a company called Sonicbids. … I ran my company for about seven years ... and then I went out there and raised venture money. Of course, the first thing that you do is hire a management team. So I moved pretty quickly to hire a number of seemingly experienced people. I hired a CTO, somebody in charge of human resources, somebody in charge of sales and a CEO and CFO all within a period of about four months. I think I was looking too much for pedigree.

For me, going through that period of about a year of basically hiring a lot of people, turning the whole company inside out and then having to go fire a lot of people—partially because I hired wrong and partially because probably I didn't give them enough leeway to go and do their own thing—was a big lesson. I think my mistakes in managing and recruiting set the company back by a couple of years.

[When] I sold my company and came to Berklee, I was used to being the CEO and the majority shareholder, having absolute control over everything and thinking I needed to be making every single decision. [At Berklee,] I was put in an environment where initially, I had no direct reports. So your ability to get things done and your ability to push things forward have nothing to do with necessarily the direct reports you have or the resources you have, and everything to do with your ability to influence others to do things—[and to do that], I think first you have to be a very good listener.

A lot of it had to do with hiring my first person at Berklee. I was part of an institution that already existed, that is very large. So how do you make a difference? You have to operate on a very different level than when you're exercising direct control. … you have to shift the emphasis to hiring right rather than training right.

If you hired somebody that needs very little management ... each action is multiplied 100 times.

The Lesson:

The lesson is, hire people who you don't really need to manage. If you find that you have to manage very closely, either you hired wrong or you're approaching it wrong. If you hired somebody that needs very little management, then ultimately I feel you've made the right selection and you've created the right environment for somebody to express themselves.

When that happens, you find that you don't need to be involved in everything. Each action is multiplied 100 times because you're hiring the right people, versus the opposite where you feel you have to be involved in everything. Then you're actually constraining the growth of your own organization.

Follow Panos Panay on Twitter at @panaypanos.

Photo courtesy of Berklee College of Music.