Startups – Responsibilities of the 1%
You belong to the 1% of founders whose startup is a huge success?
Congratulations. That’s an enormous achievement. There are probably two types of successful founders: The ones who couldn’t be bothered reading this, and the ones who feel that:
- with success comes responsibility (for your employees, investors, clients, etc.), and
- growing (too) fast creates a whole new situation with new challenges.
Yes, growth is the ideal state of every business, but as Marshall Goldsmith put it, “what got you here, won’t get you there”. Here are some of the issues created by growing (too) fast, and why interim management can also be a great solution for startups:
“What got you here,
won’t get you there”
Inefficiency due to lack of business process management:
In the beginning, you relied on a few allrounders, and your motto might have been something like “just do”, or “do, fail, learn, repeat”.
If you’re lucky, the learnings have been documented somewhere in the cloud. Now, this might become the biggest obstacle in the way of achieving the necessary efficiency, which requires sharing tasks amongst specialists.
To make this possible, you’ll first need to document as well as standardise processes, and ensure that information is shared amongst the team – in an organised way. Only then will you be able to formulate roles and manifest them by training your employees accordingly.
However, can you really afford to work on the business, while you don’t even have enough people to work in the business? An interim manager who has done this before and knows how processes are managed in bigger businesses might be the perfect solution in this scenario.
Hiring the wrong people too quickly while losing talent
Obviously, you need to hire.
For startups, filling management positions is usually the most difficult, as typically people are more likely to join a startup in the beginning of their career, when gaining experience is more important than salary or job security.
Hence, promoting from within is often not the best option. Similarly, in this critical phase, you cannot afford to invest a lot of time in training new employees. They should already fit into the existing team and meet the role qualifications.
Furthermore, you might lose some of your first employees, as they joined a completely different company back in the days, and might not want to follow the new direction.
Until you find the right permanent employees for those tasks, hire an interim manager who’ll be on board and ready to start working within days instead of months.
In comparison to outsourcing the tasks, this offers the benefit of getting to know a potential future employee – or at least learn who you are looking for. Only employ those who prove successful and fit your culture. When your business is changing so quickly, you can never be sure whether happy employees today will still align with your goals, tomorrow.
Interim managers are free from your past. They always draw their motivation from the current project and challenge. As interim managers are usually not interested in equity, this also helps to avoid conflicts around this topic – another typical pitfall for growing startups.
Running out of cash
More customers are buying your products. Why should you be worrying about money then?
When you started out, you probably optimised your production, services, customer support and infrastructure for serving only a few customers to their highest satisfaction at an affordable price.
Rightly, you didn’t focus on profit, but on gaining market share by making your clients come back and eventually recommend you.
Now that demand for your products or services has gone up, you might need more employees or a whole new infrastructure to satisfy it. The costs of delivering your products or dealing with customers might rise disproportionately – exceeding your growth in revenue. Learn how interim management helps you to grow in a more profitable way.
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