The startup scene in Singapore is growing and there is a ‘cool factor’ hype associated with working in a startup. Eric Ries’ Lean Startup principles also unintentionally popularized the image of startups needing to be agile, lean and fast moving organizations. Startups are definitely much more pre-disposed to being ‘lean’ than a large matrix organization. But, the truth is that startups also experience unique challenges that can result in long period of doldrums, inactivity and thus wastage of resources in terms of money, man-hours and motivation.
I work in a startup and in my line of work, we interact with other startups too. While startups can be lean, agile and responsive to market needs, it could also be the opposite if not managed with a good measure of pragmatism. If you work in or with a startup, you may find the following scenarios familiar.
1. Too much informality
The beauty of a flat organization is that decisions can be made quickly and ideas are shared rapidly across functions, roles and management levels. Informal work environments encourage productivity catered to the pace and style of the individual. But if this culture is impeding the collective productivity and operations of the company, then, some level of formal structure has to be put in place to facilitate some level of discipline and compliance. No matter how small the startup team may be, project and team management processes are still necessary for productivity. It is important to establish early a culture of respect for professional etiquette such as punctuality, timeliness of work submission and accountability.
2. Irrational aversion to bureaucracy
Startups enjoy the good reputation of being fluid, dynamic and being unhindered by bureaucracy and paper work. Not being saddled with reports after reports is a great time and resource saver for the entrepreneur. But, not having a minimal level of bureaucracy could also mean that important ideas are not documented, progress is not measured or standard operating procedures are not established. These may not appear to be a problem at first but if your business is growing rapidly, these problems will snowball into an obstacle to expansion. Having a standard process of documenting and managing the dynamic processes of a startup means that your team can spend more time on what is most important such as product iteration, idea validation, field research and fund raising.
Having these structures in place early in the startup stage can save you a lot of operational headaches as you progress from being a small startup to a bigger organization.
3. Absence of pragmatic goals and objective planning.
Many, though not all, startups are born out of great ideas. And often the alignment of luck, timing and visionary leadership plays a huge role in spawning successful businesses. But beyond the first flash of a brilliant idea, luck and vision, there is a whole world of management processes involved in the growth of a startup.
No matter which stage the startup is at, it is important to use key performance indicators as an objective yardstick to review progress of the business. At the end of the day, the startup must be financially and operationally viable. So, a significant amount of time needs to be spent on investing in long-term and pragmatic goals such as cash flow and efficiency. While it may not be possible to second guess the outcome of a creative idea, it is important for the co-founding team to learn from the success and failure of others, work out contingency plans, invest time in product iteration, customer validation and field research instead of ‘thinking in front of the screen’ all the time.
A startup by definition is a temporary organization that, if successful, will evolve into a bigger and more complex company. For this reason, the management foundations developed at the startup stage is important for its growth and maturity, and should not be sidestepped completely in the pursuit of the often misunderstood and misrepresented ‘startup culture’.
By: Taryn Mook. Taryn is a business model innovator working in a tech business incubator. She develops new business models to make new businesses sustainable and works a great deal with entrepreneurs.
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