Part of a Series. For prior segments, go to my blog.
STARTUP MANAGERS ARE DIFFERENT
Startup mangers are different.
Managers are people who get work accomplished through other people.
Startup managers have added complexities: they must get especially difficult things done very fast by (mostly) strangers while riding an unpredictable roller coaster.
All managers in a new enterprise have a very challenging job, often seemingly impossible. I greatly admire them.
STARTUP MANAGERS’ HAVE SPECIAL CHALLENGES
(This is part of my series on STARTUP MANAGERS ARE DIFFERENT – for prior parts, go to my Blog
I’ve found a few things that make managing a startup so different and challenging. Understanding each can help you get more done by the people you are going to manage.
(1) Startup Managers Thrive in Turmoil
Managers in startups thrive in what outsiders see as chaos, a mess.
Is that you?
Once the startup begins operating, its managers will quickly encounter powerful forces forcing significant alterations in the business plan. The modifications necessary are often radical, pushing the company in unexpected directions that are often threatening complete company failure. That provokes a lot of emotions and makes getting results more difficult. Not much during the early stages is predictable – other than the current situation is going to change very soon.
Unlike executing a rigid plan (low risk) for a giant public corporation, a startup’s plan (high risk) is constantly changing in response to anticipated and unexpected encounters. Moving into a market that does not yet exist will precipitate rapid fire decision making, over and over: Action, reaction, re-reaction, repeat. That drives giant company people nuts.
Trials and errors after launch of new products is classically chaotic. Initial customer responses trigger a roller coaster of unpredictable results, hot and cold, up and down. Success is followed by failure. And failure is followed by success.
Experienced startup managers have learned to react quickly. They are expected to move swiftly on a wide range of actions, with minimal analysis: altering marketing directions, shifting customer focus, modifying external communications, changing customer support stopping and adding suppliers, as well as altering spending and hiring. There is no time for classical giant company analysis-paralysis.
Here is an example I observed in a several of the new enterprises I coached. This one is about how a startup’s managers encountered turmoil in their consumer-centric startup’s product launch.
The initial product was launched with high confidence that it would be a hit. High quality preparations had been created and put in place by a top tier startup team. However, within three months the product turned out to be not even a bit popular with its intended customers. Instead it fell far below the sales hopes of the company.
The CEO told his staff that something big had to be done, fast. Then he communicated that in separate phone calls to each member of the board of directors (venture investors). The marketing CMO and staff spend a few more weeks checking the results and then conceded the failure of Product One was inevitable.
The CEO agreed and turned the CTO and CMO loose to figure something out that could be done next, and then he called a special meeting of the board of directors to inform them of his decision. The CTO rounded up his technical staff, telling them to stop what they were doing. The marketing CMO did the same for her staff. An all-hands employee meeting followed where the founder CEO announced the bad news and said the entire company would immediately begin work to figure out what should be Product Two.
The CTO and team had been kept closely in touch with how sales were (not) going and thus were not surprised. The CMO and marketing staff were already working on a short list of what might be constructed to create Product Two. It took a week of intense meetings from which the specs for a fresh product emerged, plus a week more to sketch a plan for rolling it out. Every person in the startup was invited to contribute. The following week incorporated the suggestions, resulting in a sketch for a plan to be executed.
With a nod from the founder CEO, the tech group stopped all work on Product One (fixing bugs, adding features) and began distributing Product Two tasks among the tech staff. Their initial objective was to deliver proof of concept that the fresh product could be built close to the specs desired by the marketing staff. The marketing team scrambled to get in contact with a sample of the targeted ideal customers to figure out what appealed most to them, and how many were likely to purchase Product Two.
It took around three months of nearly daily meetings of tech and marketing to finalize what Product Two would be, when it could be launched, and how marketing would guide the launch. Product Two turned out to be best suited for a much narrower customer profile than Product One and whose buyers would pay a premium for the new features enabled by the new technology of Product Two. It was launched four months after Product One ceased to be sold and was a sales success.
It’s not a place for managers who need to feel in full control. Sometimes a product failure requires an unexpected and huge shift in the plan. One example is whether to gamble or not on moving to employ a new technology (e.g. move to the Cloud). Meanwhile, every other department is constantly making changes to the existing product during the daily turmoil. “It’s crazy around here!” is often what you’ll hear in real startups.
Big startup decisions are made in hallways, on phones, on the run. There is little time for deep dives into simulations, analysis, lots of numbers, many meetings and careful thinking over weeks or months. A rare meeting or two with just a few people, and it’s go or no-go. “On the fly” it’s called. That drives managers of giant organizations crazy. Executioners of startup business plans love it! They thrive on the incumbent emotions and satisfactions.
This chaos is emotionally hardest on the first-timer founder CEO. I’ve seen startup chaos lead to emotional collapse of founders. It’s a scary moment when that happens, and it signals that it’s time for someone else to take over the immense challenges of executing the plan for that startup. I observed that most founders who were willing to turn over the CEO job to an experienced person restored their emotional strength. After a brief pause, they returned to the startup to work, contributing their special talents and skills, supporting the fresh managers now on the job responsible for making required changes to the company’s business plan.
Is that you?
End of "Turmoil." Next time I’ll talk about “Guts”
I wish you The Best on your Adventure!