The health of the startup organization is as important as your good health, mental and physical. Serial entrepreneurs build their companies by continually promoting efforts to keep the health of the organization in great shape.
Doctors use simple check lists when doing an annual physical examination of you. Here is a check list to use for checking on how healthy your organization is:
· Resilience. Startups run into surprises every week, some good, some bad. All require a swift response. Markets are fickle, customers do not arrive as hoped for, buzz is dull instead of exciting and the next financing round can be a dud. Or a sudden arrival of excited customers from an unexpected sector challenges your carefully laid plans. Healthy startups are good at spotting and managing such risks before they happen. They anticipate catastrophes and avoid them. They keep cash reserves ready. They build mechanisms that prepare the company for responding quickly. This is a key aspect of being an agile startup.
· Execution. Startups must do the basics right, make good decisions, and perform essential tasks. Brilliant products, hot buzz, or surging markets can cover up sloppy performance for a while, but eventually poor execution catches up and can kill a startup. Every department must execute well. It is dangerous to focus management on high performance marketing communications if it cannot build great products. When execution breaks down, it is time to get a new CEO, quickly.
· Cohesiveness of Purpose. This is part of the vision thing, yet it is more than that. Startups need everyone to believe in and be dedicated to the purpose of the company. That is one reason why it is so hard to manage startups with people separated by thousands of miles, in several countries. Even worse, is mental disaggregation because it divides the company emotionally and dissipates energy. People need to work in a common cause. So your vision must be shared with the organization. You achieve that by crafting a compelling articulation of your story. This generates a shared identity. It reflects corporate values, reinforces the common purpose and produces enthusiasm.
· Momentum. The startup must have a sense of growth that is accelerating. That comes from lining up your bowling pins as successive market segments. Then you start by knocking down the first so it leads to beginning the market penetration of the next two, simultaneously. The limited resources of the company become focused and produce expanding sales that grow the value of the company. It demoralizes less organized competitors. Keeping momentum alive calls for creative minds to find the next market segments while the early ones are being entered. It calls for quick moves to respond to surprises during marketing campaigns. Speed is very important for startups building momentum.
· Complementary. All your departments must act in concert. They are not silos. They must communicate effectively and collaborate like twins. The startup’s informal social structure comes into play here. The culture of the organization with its shared values is a powerful asset in keeping everyone reinforcing the drive for successful growth.
All of those check points will tell you how healthy your organization is. It should assist you in finding where your company needs attention.
Execution of creation and management of a healthy startup organization is one of the prime tasks for the CEO. It includes performance reviews of individuals, a task that is typically done poorly by startup CEOs. When every employee has written goals, you have one of the most important processes in place that contributes to a healthy organization.
If you are from a public corporation and are looking at a startup, try comparing the above list and comments to the one for giants that was published in the McKinsey Quarterly of 2007 Number 3. That should encourage you that with some modifications, the checkup on organizational health for a giant can be used for a startup.