Most people have heard the rather depressing statistics around business failures. The percentage of startup failures varies widely by source and methodology, so I’m not going report any specific percentages. For a good discussion of why many such studies are problematic, see Small Business Failure Rates: Why All The Stats Have It Wrong. Regardless of how you slice and dice the data, though, a lot of businesses fail, especially early on. For the businesses that survive the startup phase, what is it that sets them apart? One obvious answer is the people involved, from the founder to the employees hired. Startup employees are a special breed who have valuable lessons for businesses at all stages of development.
Startup Employees Have a Growth Mindset
Startups that survive tend to have founders who have a growth mindset. One of the characteristics of a growth mindset is the belief that both intelligence and success are not fixed, static traits, but can be learned. This in turn leads to hiring other employees with a growth mindset, as well as candidates who seek out the startup environment because they have that growth mindset so well suited to the startup environment. Growing a workforce. The leader and employees with a growth mindset results in a company capable of quickly and proactively adapting to the ever-changing business landscape. And if you’re worried that you don’t have this “growth mindset,” don’t worry because it be learned. What startup employees bring to the table can be applied to any business at any stage of development.
Proactive Adaptation in Startup Employees
One interesting characteristic among startup employees is how many of them pitched themselves to the startup’s leader as opposed to applying for an advertised position. In other words, they’re proactively adapting themselves to fit a position that doesn’t even exist yet in the startup, and then go on to successfully pitch it to the startup. Now think about how this can apply to any business at any stage of development. If business survival depends on employees taking initiative to fill anticipated needs, then you want to hire people with the growth mindset. They are the ones who will see what new things need to happen to stay ahead of or at least keep up with curve of change every company faces in the faced-paced business environment of the 21stcentury. Take note that making the most of growth-mindset employees means giving them the room and trust to do what they think needs to happen in order to move the business forward. They’ve got keen radar to identify opportunities and needs, so let them do it.
An External Focus
The startup environment is rife with uncertainty. Anything could go wrong, and often does. Many of the things that can go sideways come from sources outside the walls of the company. While having an inward focus in a startup business makes sense in terms of building internal capacity and processes, it can come at a cost if over-indulged. The company that goes too far with its inward focus will be blindsided by external forces that are in constant flux. When you think in terms of the classic SWOT analysis tool (strengths, weaknesses, opportunities, threats), your company and all its people have to be in constant external SWOT mode to the opportunities and threats brewing on the outside that will have an impact on the business. For a startup company, a big chunk of external focus is about what the competition is doing what the response should be. I’m not suggesting engaging in corporate espionage to find out about your competitors – some simple Google News Alerts can do the trick. What’s more important is figuring out what to do with what you learn.
The Mission Filter
In the general craziness that often happens during early rapid growth spurts in a startup business, it’s all too easy lose track of the core mission of the company. Startup employees had to put a lot of blood, sweat and tears into creating the mission. Then they had to hold fast and tight to it in order to get to growth. Using the mission as a filter or lens through which to view potential changes as appropriate or inappropriate. Staying grounded in the core mission with tenacity and creativity is something that can benefit a business at any stage of development. If your company’s mission statement only comes up in the annual report and doesn’t play an active role in the day-to-day work of employees, then you’re missing out on its true power. Go back to the startup history of your company and soak in the vital role it played in those days. Use your company’s mission as a tool to help you make any significant decision.
Startup employees often have the opportunity to interact personally with the company’s earliest customers. These interactions gave them unique insights into the customer perspective on the product or service offered. But after a company outgrows the startup phase, most employees will never interact personally with customers. This is unfortunate because the customer perspective has to be central to every aspect of a business. Whether its decisions around new products and features or a change in marketing strategies, the customer voice should be a vital part of it. After all, there can be no business without customers. If you want to keep your company’s relationship to its customers personal and healthy, you have to find ways to let more employees experience personal interactions with customers through cross-departmental opportunities, such as observing a sales meeting or listening to customer service calls.
Ownership of Outcomes
When a startup is small, so are its teams. The organizational structure is simple and flatter than at later stages of development. The advantage of this is that everyone has better instant visibility into more aspects of the business. Everyone has an easier time seeing project successes and failures. Everyone has a much higher sense of personal ownership of outcomes. How can you get that kind of buy-in and engagement in a business that’s much larger than those early days? It begins by making sure you’re hiring go-getters with the growth mindset to begin with. Trying to create it among employees who are already disengaged or lackluster performers might well be impossible.
Not Every Startup is a Model to Emulate
Having sung the praises of startup employees, I have to introduce a major caveat to this whole article – I’ve been talking about good startup employees. I’ve also been talking about not all startup businesses, but about successful startup businesses. There are plenty of startup employees that don’t qualify as good. Many startup businesses fail. For a humorous but true look at how messy the startup environment can be, check out this article from The Guardian: The secret life of a startup employee: it’s like being a firefighter led by an arsonist.
To summarize, good startup employees have a lot to teach businesses at later stages of development. The lessons highlight the importance of a growth mindset, proactive adaptation (agility), external focus, the mission filter, customer-centricity, and ownership of outcomes. Put them into practice in your company to create and harness the magic that happens in successful startups. Your company and your employees will thank you.