How to develop strategy in a 20-person startup

Startup structure
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Rhys Marc Photis
Founder, MD & Human being
GPi Global Performance Improvement
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Companies usually go through four universal development stages. The first level, small and vibrant companies with fewer than 20 people - your typical startup - account for about 20% of organisations. In this article, Rhys Photis, an entrepreneur and acclaimed leadership trainer, looks at how developing strategy, roles and responsibilities, conflict management, leadership and decision-making styles can support or hinder these businesses' growth.

This is the first in a four-part series. For each article, I interviewed a company founding partner with a positive spirit. The first one is Wendy Jephson, co-founder and chief behavioural scientist at Sybenetix. The company was founded in 2011 with a mission to understand and improve human decisions – those that have impact. They have built decision support tools that allow experts to make consistent improvements in their decision-making using behavioural science, data science, machine learning and the latest technology.

Sybenetix started with finance, where the impact of good and bad behaviour has long been understood but remains hard to manage without reliable data on how exactly people’s actions affect performance and conduct. The fact that the company was selected for TechCity Upscale programme in 2016 proves they are getting it right. I will contrast this with my own experience in various companies to illustrate the more destructive side of management.

The first step; develop your strategy

There are four main leaders at Sybenetix when it comes to planning. However, the other 11 employees can easily be pulled in when and where necessary. According to Jephson, one of the team’s strengths is their regular pre and post mortem to prepare and learn from big events.

On the corporate end, I was often annoyed with a boss who had little time to help me prepare for a big pitch or presentation. However, after the event, he always knew what I had done right or wrong. No constructive feedback, he just ‘knew’ - not motivational at all.

When it comes to sharing future strategy Jephson says it is quite easy at Sybenetix. All 15 staff would most likely sit in one room, which means everyone can hear what is going on. This is very different to what I have seen in many companies where next steps are planned behind closed doors or managers even leave the premises. They then often wonder why people’s decisions are not in line with the defined strategy. You’ll hear comments like ‘people should just do their job’. I always thought everyone’s job in a company was to put themselves behind the strategy and way forward; include them and share the burden.

Who does what

Jephson pointed out that one of their turning points was when the four leaders came together to clarify future roles and responsibilities. This is also confirmed by Christian Annesley’s BZ article Good People, smart structure.

Cleverly enough, Jephson & Co brought in a suitable investor to facilitate the process. They defined seven key areas (marketing, sales, business channels etc.) and blind-voted on who should lead each one. Of course, the danger with this is to forget to update others and become overly concerned with one’s own area. However, clarity helps to focus.

Leading the pack

Once people take charge of their area, the success of that venture very much rests on the leader’s ego. Every successful entrepreneur will confirm that you can’t always get it right. Most modern businesses operate in VUCA (volatility, uncertainty, complexity and ambiguity) environments, especially companies like Sybenetix.

Jephson promotes a leadership style which is mainly task-oriented. She focusses on the end result almost as much as the directive leadership style. However, as a consultative leader, she also does something the directive leader does not, which is to ask her subordinates for opinions. I was provided with clear goals throughout my career, yet most of my bosses micro-managed me by constantly checking what I was doing, which was very frustrating.

The leadership style in ‘red’ organisations is nicely captured by Torbert’s Seven Transformations of Leadership.

Leadership

From the above chart, you can easily see what a healthy and an unhealthy environment looks like.

Making decisions and encouraging diverse opinions

A skill Startups would be well advised to hone is quick decision-making. Sybenetix champions that too, but they also ensure everyone shares their thoughts and concerns, and welcome thinking aloud during discussions.

People are allowed to change their minds, openly acknowledge when they get something wrong and everyone is interested in the best way forward. In an often ambiguous world and that is easier said than done, but possible.

After speaking with Jephson, I believe the more purposefully driven people are, the more likely they are to keep their eye on the ball. People at Sybenetix want to radically improve financial decision-making. They want to raise standards, deliver something that really works, are in it for the long haul and feel like a family. Such a strong bond helps everyone to fight alongside each other.

A practical technique to encourage different opinions is de Bono’s Six Thinking Hats. Here is a practical sheet with prompts to get you started.      

What management values should startups adopt?

I believe it is vital to put your good people first and the customer at the heart of everything you do. Prepare your organisation to quickly adapt and adjust to changes in market dynamics or customer demands. This requires the coming-together of three key aspects:

  1. Individuals are flexible, encouraged to act and have growth mindsets
  2. Teams and groups act transparently, communicate adequately, learn from each other and adjust
  3. The organisation is willing to respond and adapt its structures and processes to people’s needs

Include your people as much as possible in the development of the strategy. After all, they are part of the journey. Follow the common belief; that which concerns everyone should also be discussed and influenced by everyone.

Develop measurable goals with your people, based on your strategic direction. Allow advanced professionals to define their own. Devise goals that engage people at an individual, team and company level and review them regularly.

Clarify who is championing which business areas. You need to foster transparency and openness. Don’t let people hide behind their functional responsibilities, and put people and open dialogues before defined responsibilities, processes and procedures.

Let people share responsibility for delivering results. They should work it out and you should consult or coach only when needed.

Actively encourage diversity and constructive criticism. Lead by example. It will help you become a better person and will channel your limited time, money and energy where they are most needed. Adapt to changes when necessary rather than sticking to the plan - the plan was defined in the past but you are now preparing for the future.

Whatever your future plans, whether it’s to remain small or grow, be flexible.

With Sybenetix’s spirit, it is only a matter of time before they get more funding and grow. However, an organisation exceeding 20 employees has to start organising itself rather differently. In the next article, we will explore what this means and what to consider if you want to scale with a healthy, people-centred approach.

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07th Feb 2017 10:18

The saying goes that "communication is everything". That is so true, certainly for appropriate communication. I recognise the Sybenetix approach as an effective one for ensuring buy-in and maximising performance as a result.

I have worked in organisations where management either didn’t trust employees or didn’t believe in involving them, and made all decisions behind closed doors with dire consequences. If we hire the right people to start with – assuming we know what we need for success, then trusting them to get on once we’ve jointly agreed the essentials and milestones for review should be natural.

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09th Feb 2017 16:28

Hello,

Thank you for your response. I like your last word : 'natural'.

I think too many people take on very different personas and behave differently as they would at home.

Like you, I am hoping that especially younger and start-up managers will take a more humane and natural approach to managing their people.

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