2.09.2016

Can Startups and Structure Co-Exist?

Picture this, Abena has a great business helping people deliver gifts to their loved ones on birthdays and other special occasions. She starts with a few friends and family members, wrapping the gifts in her apartment and delivering them herself. As all great businesses do, hers starts to grow and it moves out of her apartment into a proper office space.


Abena enlists her sister, brother and best friend to help her at work. Over time, problems surface between her best friend, Ekua, and her sister, Nana, because both of them would rather stay in wrapping gifts, leaving the tedious job of deliveries to Abena’s brother, Kweku, who gets easily burned out from all the deliveries.
How should Abena handle this situation? Whose side should she take, sending the other person out to do deliveries? Her best friend or her sister?


Does this situation sound familiar? This is just one example of problems that can arise when startups run without proper organizational structure. Because roles, duties and other activities are not clearly defined, precious time and energy is wasted on settling disputes or handling challenges reactively, as they occur, when they could have be avoided with a bit of structure.


We understand that startups have limited resources and not everyone has the time or the skill to put in elaborate structures like writing employee handbooks or drafting operational policies from day one, but in some cases, it is important to be proactive. Imagine how much stress Abena would have saved if she had job descriptions for each person, for example.


According to an award winning research paper done by Antonio Davila, startups that adopt structured systems to run operations grow three times faster than competitors and have a lower rate of CEO turnover. So, do we believe startups, no matter how small, can have proper organizational structure and function effectively? Definitely. While the list of processes and the prioritization will differ from industry to industry, here are a few basics you should have in place:


Legalise it
Did you know that according to smallstarter.com, 70% of people who regard themselves as entrepreneurs in Africa do not have a registered business? Yep. It is often tempting to believe that registering your business can wait, but it shouldn’t have to. Apart from internal problems you may encounter with people you work with, someone else in your country may have your exact business idea, or worse, your exact business name! So contact a lawyer, if you haven’t already, and legalise your business. There’s also something about registering your business that helps your team members fall in line and take the business more seriously.


Put a name on it
Not your business, we hope you have a name already. Put a name on every role that needs to be filled for your business to function at its best capacity. Human Resource Manager? Marketing manager? Director of Operations? Name it, describe it on paper and make sure everyone knows exactly what they are supposed to be doing. Even though entrepreneurship often requires all hands to be on deck, having job descriptions allows you to introduce responsibility and accountability into your business.


Know what success looks like
When everyone knows where they are supposed to be going, they can get there faster. In addition to the success metrics that you use to gauge the progress of your business, it is important to have metrics to determine how well each team member is doing.


Know your aspirations
Here, you have to know your short and long term visions. Each of the structures and processes that you put in place, and the decisions that you make will only make sense within the context of your business' overall goals. Having a roadmap for your business is the best way to "sanity check" every decision that you make.

These are some examples of the things that are needed to successfully grow a business. Which structures does your business have in place? How do you think you can improve on them? Share with us in the comment box.

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