Mismanagement in startups stops right here
My clients are usually startups or fast growing small and medium sized businesses. I would like to highlight a few recurring mistakes I have seen throughout my career when it comes to human capital management (or mismanagement).
The story is always the same: a bunch of friends or family members woke up one day with a dream and decided to make it happen. Together they worked nights and days, while wearing many hats: from programming to finding financial partners, selling to hiring, searching for a location at a decent rate to changing the bathroom light bulbs. They went through ups and downs, helping one another when they thought they would have to go back to being an employee for somebody else. Finally, they made it.
They grew their sales, hired staff and moved to nicer offices. They split the tasks among themselves. One became the ‘official CEO’ with (real) CEO’s function. Another dedicated himself to the business development. The ‘Tech’ guy became the VP of product development, and one became the General Manager.
Now, that the business is bigger, it needs to become professionalized. That translates to (re-)organizing the company.
When a business grows bigger, it occurs that those who woke up one day with a dream or the first hires are no longer the right fits for managing or handling certain tasks. Your cousin may be a great programmer but completely lack people skills. Your bookkeeper was doing the job when you were four employees but may not be the right guy to help you strategize and invest properly. As CEO, you may be good at making dreams come true but terrible at the day-to-day operations.
If you want to take your company to the next level, you need to face reality and take action. If you don’t, you will end up losing your best people. You need to engage your employees to retain them.
In these high-growth companies, I often see great employees leaving because the CEO (or a partner) is ‘protecting’ a long standing employee, despite the fact that he is not performing in his specific role. While it is great to be loyal to those who have helped make your dream come true, this is a poor management style.
Let me ask you this: How would you feel if you had to report to someone with no managerial skill because he is friend with the boss? How would you feel to report to someone that has less technical knowledge than you do that does not take into consideration your recommendations and input? How would you feel if you reported to someone who procrastinates, making you work twice as hard, just because you care about delivering the project on time (even though it is not your company)?
If you are an entrepreneur, chances are that your answer to the above-asked questions would be: ‘I’d leave’. Right?
CEOs, you must remember that owning and managing a company comes with duties and responsibilities, not only privileges. As much as you might dislike it, you need to sit down and have the ‘real talks’ with all your employees and partners, whether they started the company with you or were freshly hired. Rest assured, if you are proactive and do it just on time, having the ‘real talk’ does not necessarily leads to firing. Plenty of alternative solutions can be implemented.
This is a Human resources issue. Growing companies need to undergo a proper mapping and organizing process. Having someone on the outside of the company can be very valuable to avoid your emotions overriding the logical. Reviewing your organization chart, mapping and processes, objectives, performance and key performance indicators should be taken as seriously as all the other things you do to grow your company, including investing in developing new products and markets.
Successful growth is in your reach. You can get the best out of your employees to make your dreams happen. Help is available, you just need to ask.
Should you need assistance with your managerial issues, contact us.