The Right People in the Right Seats Means the Difference Between Success and Failure Four timeless ingredients for building great teams that drive business success

Entrepreneurs know that building a business can be frustrating at times, but many don't expect a top source of that frustration to be their employees.

Founders love building businesses innovating, and bringing products and services to market. Consequently, they often expect the people they hire to share their independent drive and attention to detail. Over time, they might get irritated by workers who take too long or don't behave like owners — so they resist delegating and grow increasingly frustrated.

But entrepreneurs can't rely entirely on themselves if they want to succeed. Especially in a service-based economy, people are the engines that run most businesses. It's no surprise that a CB Insights report noted the third most common reason for startup failure is a poorly suited team.

Related: 3 Ways to Avoid the Agony of Startup Failure

It's time for entrepreneurs to become just as interested in their staff and teams as they are in their products, services and business plans. Although team structures and communication methods might be changing due to the pandemic, the ingredients for building great teams that lead businesses to success are timeless:

1. Create a clear vision and action plan

When individuals and teams lack clarity around their purpose, they make assumptions, become confused and sometimes leave. No entrepreneur can afford to waste time or money retraining talented performers just to have them leave because they didn't understand why they were brought on board. And clarity brings out the confidence that makes 98 percent of workers perform at peak levels, per Indeed's calculations.

To bring more clarity to your teams, start with two documents. The first should be a chart outlining who owns the major functions of the organization and their roles and responsibilities. With this, every employee will know who is responsible for what at the leadership level. The other document you need should outline the company's vision and plan for reaching it. This document should be concise and straightforward (think no more than two pages long). But it should leave no ambiguity around the vision and action plan.

Together, these two resources can serve as a shared point of reference for any questions about where team members fit in and how they can meaningfully steer the company toward its goals.

2. Listen to and acknowledge all employees.

Workers who feel disregarded or disconnected from a team will quickly tank in terms of productivity and performance. Plus, they'll be more likely to take a permanent hike. According to O.C. Tanner Learning Group, nearly 80 percent of professionals admit they left a position largely because they felt underappreciated.

It's much harder to find replacements for good people than it is to stop people from becoming disillusioned in the first place. Leaders should listen to their employees, elicit feedback, reward employees appropriately and make workflow or operational changes as necessary.

Related: 5 Companies Getting Employee Engagement Right

3. Narrow down and focus teams.

Minimize distractions and maximize collaboration by distilling teams into narrow groups. You want teams to be able to leverage the natural abilities of all members to do the most impactful work together, but having too many people can make that difficult. Some members might stop contributing altogether because it's easy to hide behind members who do contribute.

To ensure meaningful contributions by all team members and to buoy collaboration, entrepreneurs need to keep their teams at no more than about seven players, and everyone on the team should have a clearly defined role that aligns with their talents.

Related: The Science Behind Why Small Teams Work More Productively

Amazon, for example, has a famous "two-pizza" team structure of eight to 10 members each. These teams are designed for flexibility, and if one team's workload becomes so heavy that it inhibits agility, the company divides the work among other teams. This way, Amazon ensures that teams can continue working autonomously and responding quickly to new needs as they arise.

4. Challenge employees.

Employees can become complacent fast when they get used to day-to-day tasks and stop feeling challenged. On the other hand, new and challenging problems that require unique solutions can shift employees into a growth mindset.

Many founders fear that challenging already-busy employees will lead to stress and burnout. When the challenges focus on getting people to new levels of job mastery and enjoyment rather than just pushing productivity to the max, however, they can lead to more enjoyable work for employees.

One manufacturing company I consulted needed a boost in employee morale when it fell behind its goals in 2020. Leaders devised a challenge that focused on one metric to which all departments would need to contribute: an average of $400,000 in merchandise shipped per day ($100,000 per day more than the previous record for that time of year). The company met its goal by the end of the quarter, and employees said they recognized new talents in other people on the team and had fun working together. Ultimately, the challenge instilled more confidence among employees in themselves and one another.

To create rewarding challenges like this one, consider assigning small, low-risk projects. The goal is to create a learning experience with minimal damage if it doesn't go as planned. Another option would be to ask workers to become subject experts in trending niches (like many organizations have recently done with TikTok). Above all else, realistic and important challenges should instill confidence, lead to new capabilities and increase commitment.

Entrepreneurs can have the best ideas, best product-to-market fits and plenty of cash on hand — but ideas will never reach fruition or gain real-world traction without the right people to support them. Leading with clarity and focus, actively listening to feedback and keeping employees thinking on their feet can help entrepreneurs build the teams they need to reach and maintain success.