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Start-up Etiquette

February 3, 2010 2 comments

Whilst working on a post-series, the first of which will be published this coming Friday & entitled “Fast Growth Etiquette – The Pulse Check”, and after an interesting session yesterday with a hyper-growth/successful venture Founder/CEO, I thought I’d elaborate some thoughts on “Start-up Etiquette”.

Preface for this post.. in one way or another, every “start-up” aspiring to success will one day either become a “corporation”, or part of one. Any questions so far?

When you’re raising a child, and I have two (18y & 13y old), you learn very quickly that the longer you tolerate inappropriate behavior, the more ingrained those habits set roots in a child. As a consequence, later in life, either you, your grown-up child, or the public they’re subjected to, will pay the price! Still with me on this one?

Over the last several years, as I’ve had everything from VC’s to “wanna-be” entrepreneurs try to convince me that start-ups are suppose to be chaotic. Typically this conversation, and no adjustment in attitude, precedes significant losses, significant pain in multiple forms (both personal & professional) & in the worst cases, absolute failure & humiliation. Now.. back when we’re having the initial debate, I’ve typically asked them how they raise their children. For example; do you teach your kids not to play with matches before or after they’ve burnt down the house?

Granted, necessity is the mother of invention, or “copy-cat” these days, from which comes allot of innovation. And I will agree that start-ups have to be super flexible as they “find-themselves” in their own new world, but I will also share from experience that the ride to the top can be much more pain free for EVERYONE, if you just adjust some basic good working habits into your fast pace hyper-growth start-up.

** In practical terms, it’s about taking the core essence of successful corporate best-practices & adjusting them in size, dimension, intensity, velocity & rhythm to your start-up reality, and more importantly culture.

So here are my most common observations when I have walked onto the scene:

  • In 9 out of 10 cases, the idea may be yours, but the money belongs to your investors
    • Spend every penny as if it were your LAST, especially whilst you’re still running in the “red”
      • Set “budgeting & cost control habits”
      • All you need is a cost-center based culture, not an entire SAP system
  • Communication is KING (!!) Engage & Enroll instead of Present & Push (at all levels)
    • Hire based on Outcomes/Deliverables vs. Job Descriptions & CV’s
    • “Converse” with people vs. Talking to/at people
      • Leaving the “pushing” for non-conformance/performance
  • “Inspect” regularly
    • People don’t do what you “expect”, they do what you “inspect”
      • Find simple & measurable time based rhythms with your staff
      • Don’t leave difficult conversations for later.. address non.conformance/performance immediately & regularly

There are “habits” that you need to ingrain in your company’s culture from day 1, and you have to fight for your life to not abandon these principles along the way. Adjustments to reality are fine, but understand what’s “at the core” of that policy, rule or process you’re about to change, and how will it affect your organization when you’re no longer 4, but 400.

Some food for thought..

  • on average, also depending on how long ago the organization has “passed the tipping point” (& I’m referring to downward spiral here), an organization get’s significantly challenging past 40 people and you will hope to have a well established culture by then, which actually starts with the first 4 staff.
  • Once you’ve entered the “flat-line” growth due to non-performance, having lost sense-of-urgency, passion, enthusiasm, alignment & motivation, you’re most likely (best case scenario) looking at a 6-9 month change management process, including a staff turn-over of an additional 20-35% during the process
    • positive results at varying levels will be evidenced within 30, 60 & 90 days into the process
  • If you’re steep into your downward spiral, typically evidenced by year-on-year +20% customer  & 40-50% employee churn (loss), then you’re probably looking at a 12-18 change management process, with significantly higher employee churn until the corrective actions have taken hold at about 4 months into the process

These are all very high-level & still a superficial observations (just the tip of the iceberg) of what I have most commonly encountered, but it will give you an idea of what you need to pay attention to TODAY in order to ensure your “tomorrow”.

And if you’re already a “corporate”, or when you finally become one, don’t fool yourself, the same principles apply, just on a larger scale and a different dimension. I’ve had my fare share of corporate “cost centers” that quickly became profit & high customer satisfaction centers with some very simple adjustments & attention to detail.

Why not learn from someone else’s pain and save yourself for the more pleasurable experiences?!