“One of the core problems with startup management,” says Rhys Marc Photis, the founder of the management consultancy GPi, “is [that] it manifests itself in the experiences people have gone through as employees and managers themselves.”
When a startup begins to grow, it needs to put in hierarchical levels and formalise things. When that happens, it is a very natural reaction to then say, “Oh listen, guys, I had this challenge before in a company when we had to set up a team leadership structure, let me do that” or “Here is a book that talks about formal structures”.
The problem Photis alludes to is the same one that the eminent business thinker Gary Hamel points to when he asks: “Who is managing your company?”
It seems like a simple question. “You might be tempted to answer the CEO or the executive team,” writes Hamel in his book The Future of Management. And you would be right, but that would not be the whole truth.
It is their proclamations, reverberating across the years, which invisibly develop the process your corporation allocates devices, sets accounts, distributes power, price elasticity, rewards employees, and addresses decisions.
According to Karan Bilimoria, founder of Cobra Beer, eight different Ps are the fundamental basics for his business success. He listed them as product, pricing, promotion, placement, people, phinance (used for the term finance), passion, and profit.
“Nowadays, there is so much aid available for businesses; availability of beer testing and supplies; the government provides so much assistance, and there are so many organisations running today that I did not have when I started twenty-five years ago,” Bilimoria explains.
But it is not that simple. As Hamel explains, like the opposite of the rules of physics, the laws of startup management are neither predestined nor persistent — and the best thing, too, for the provisions of management is now murmuring under the stress of a mass it was never intended to bear.
The fact is, says Photis, blindly copy-and-pasting from corporate environments often, in his experience, have an adverse effect on startups.
According to Photis, these problems creep in at the point of ‘letting go’; the magical point when a business gets funded or lands a big client and begins to grow rapidly.
“At that point, the founder has to let go a little because one person cannot simply manage the organisation anymore,” Photis says. And that is when they start to adopt concepts that are not borne from within the business.
It should be very similar in organisations.
The pressure of on-boarding new hires and rapid scaling leads to a proclivity for pre-ordained management ideas, says Photis.
But then you run the risk of people adhering strictly to just their defined roles and responsibilities. Then you get the typical lack of ownership issue. Startups need to put people before processes.
Corporate power structures do not lend themselves to the pliability needed by startups. “Bigger corporations are frequently self-obsessed,” says Photis. “They will say the customer is the most important part of the business. But when you speak to them on the telephone, or you deal with their admin departments, then it is either you stick to their processes, or there’s no hope.”
This is a difficult phenomenon to counter because it does call for a measure of bravery. Frequently, employees need to be afforded the chance to engage in constructive nonconformity. And then, says Photis, when an employee or team within the business comes across great idea management needs to react to it.
“It is the pragmatism to look at market opportunities,” he says. If a team in the business has a great idea, then you shift the resources to them. But in a formal organisation you say, they do their things, we do our thing, and then at the end of the year, we’ll see where we end up.
As Hamel transcribed in the book The Future of Management, which eventually compels the performance of your company, is its management model. In a post-modern age, the ability of “spontaneous self-renewal” is not just a nice-to-have – it’s a necessity.