9 Ways to Keep your Startup from Acting Like a Big Company
The kind of big-company behavior we all hate – bureaucracy, slow decision-making, politics, stifled innovation – doesn’t just happen at big companies. It creeps into new businesses as well, with just a handful of people. If you don’t actively watch for it, proactively keep it out, and eject it immediately when you see the first signs, it can infect the organization with little chance of turning back.
It’s incredible how quickly big-company culture can take hold, but there are several things leaders can do to combat big-company behavior in their start-ups. Here are a few I’ve seen work most frequently and successfully.
1. Encourage a culture of innovation and failure
You’ve started or are working at a new business because it, inherently, is offering something new and innovative to the market. The way you build that product or service, the way it’s marketed and sold, the way it’s supported and grown – these processes often require innovative thinking as well. Risk-adverse behavior will stifle the kind of innovation that’s going to help you find new ways of accelerating success.
Of course, finding those new innovations by definition requires failure. You, your team and your business will fail often before innovation is discovered and capitalized. Encourage that failure. Encourage measured experimentation. Celebrate the learning and innovation that results.
2. Hire people with a proven track record of “doing”
We’ve all worked with really smart people who talk, think, question, write fantastic PowerPoint decks to prove it – but get little done. Many of these people appear highly attractive to start-ups. They think outside the box, and speak of highly innovative, disruptive ideas.
But in a new business, talk is cheap. Execution is what matters. And people with great ideas who can’t execute aren’t going to help you make money. Great thinkers need to be part of your organization. But consider them as advisors, not employees.
3. Build processes but avoid bureaucracy
Process has a bad reputation in the startup world. We like to be free-spirited, experiment, move quickly and be reactive to opportunity. That’s all fine and good, but once you identify something that works you’re going to want to do it again and again and again. That requires process.
Even innovation itself requires a process. Do you really want all of your developers writing code for different ideas all at the same time? How do you prioritize that? When you execute new sales or marketing experiments, how are you measuring success? How are you attributing causality of success back to isolated variables in the execution? This requires process. Bureaucracy slows you down. Effective processes make you faster, better, more efficient. You’ll know the difference.
4. Find business-oriented legal and HR support
Big company legal and HR people can be about as risk-adverse as you get. For many, their job (or what they perceive as their job) is to avoid as much risk to the organization as possible. That’s a fine objective on its own, but if unchecked it can kill innovation, speed and opportunity.
Among the world-class legal and HR individuals (and firms) available to start-ups today are plenty who can successfully balance their legal and HR responsibilities with the objectives and needs of the business. Their job is still to mitigate risk and help you grow, but they know it’s a balancing act, not a black and white game of winners and losers.
5. Measure everything, but focus on a small set of key metrics
There’s a big difference between the volume of business metrics you should capture, and those you should obsess about. Your marketing team may focus on natural search volume, cost per qualified lead, awareness growth, and so on. But the last thing you want to do, as a management team, is review dozens if not hundreds of metrics on a daily and weekly basis on an intimidating, size-6-font dashboard.
Mandate measurement across all departments, but focus on what matters most. Identify and obsess about the metrics that are truly driving and defining your business. These metrics will vary by opportunity – market share, customer satisfaction, customer growth, margin – but make them your primary focus and empower your managers and front-line staff to obsess about the sub-level measures that help get you there. A model of distributed ownership of metrics across the organization ensures everyone is focused on the right level of analysis and improvement.
6. Think thrice before hiring from big companies
The pedigree, education and experience of big-company employees – leaders and contributors alike – are highly attractive. And there are many, many individuals with big-company experience who are wired to excel at startups.
But we all know this isn’t true for everybody. People who worked in a big company may have no idea how to match that success in a smaller organization. Their skills may not be as transferable as you think. They may have been responsible for a set of success metrics, but what was their direct role in making that happen? Big company experience can mask this. Buyer beware.
7. Except when regulated by the SEC, set your employees free
If you’re hiring the right people to begin with, there’s no reason you shouldn’t be able to trust them to represent your brand externally. Your employees are one of your biggest and most important marketing assets. Their ability to evangelize what you’re doing to customers, prospective new hires, and new market opportunities that haven’t yet come to you is enormous.
If you want to give them guidelines for how to share and evangelize company information through their networks, fine. Give them tools and encouragement to do so, even better. The companies that do this best not only allow and empower their employees to share information and opinions. They also hire for it, and learn from it.
8. Empower more people to make decisions
More than anything on this list, centralized decision-making can slow down the best of companies. Founders, unwittingly, are often the biggest culprit. It’s your baby, you know what you want, you know what’s best, and you want it your way.
That may have worked in the early days, but as you grow it simply doesn’t scale. It’s hard, I know, but you must decentralize decision-making by empowering, encouraging and rewarding those around you to make smart decisions without you. If you can’t do this, you either hired the wrong people or need to rethink whether you’re able to help the business scale.
9. Reward outcomes, not output
Hard work doesn’t pay the bills. Long nights and weekends don’t directly matter. Email volume, specs written, PowerPoints delivered – none of this matters if you don’t build, ship and sell. The best startups give their organization freedom to do all of the points above, but focus rewards on outcomes. This starts at the top, with policies and examples of a focus on creating output that has a short, direct line to revenue and growth.
I’m sure this list is incomplete. I’m curious to hear in the comments below from those in the startup community who have seen other examples of anti-big business behavior and habits, and also examples of additional bad big-business habits to avoid.
Matt Heinz is principal at Heinz Marketing, a sales & marketing consulting firm helping businesses increase customers and revenue. Contact Matt at firstname.lastname@example.org or visit www.heinzmarketing.com.