Can your start-up company succeed? Management responsibility is a big problem

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The chances of a start-up being aborted are very high. Most entrepreneurs don't think this is going to happen to them, but the real story is that about 75% of startups have a bad Skell Gaust, according to a recent study by Shikhar Ghosh, a Harvard Business school lecturer.

Why is that? Research shows that managers ' incompetence and lack of management experience are two of the most dangerous signals that may herald a crisis in your start-up.

Eric Riss (Eric Ries), entrepreneur, who is also the author of the Lean startup, said in a recent interview: "Many companies often fail because of such problems, and these problems seem to me to be completely avoidable. '" ”

Through the efficient allocation of resources to the start-up enterprises to improve production efficiency and ultimately success, Reese is a master. Reese and I discussed the challenges faced by such a start-up, a huge, but often overlooked, challenge: managing responsibility.

Why abandon the "scientific management Law"

More than 100 years have passed since Frederick Thelles published the Principles of Scientific management in 1911, but some companies still cling to the old management theory.

"Scientific Management Law" is the first to introduce scientific thinking into the management process, mainly applicable to the early 20th century manufacturing industry, can improve its economic efficiency and productivity. The theory focuses on motivating employees through rewards and rewarding working activists.

But is this really a good way?

The problem is that the science management approach focuses on forecasting, which is good if you can make predictions in a stable environment. Unfortunately, most startups today don't work in a stable environment. These start-ups need to develop new products, and launch services. They are taking a path of development that has not been developed, and there are no guidelines for maps.

"As long as the conditions of stability are not met, then the scientific management theory of the early 20th century will not apply to today's start-ups." "said Reese. "It is not because the theory itself has any problems, nor is it that the person who put forward the theory lacks the sinews, just because this theory is not suitable for the world that is full of uncertainty today." ”

Issues of management responsibility

The results of Reese's research show that successful start-ups tend to be four-pronged, and they will pay special attention to these four points: process, culture, people, and management responsibilities.

Unfortunately, management responsibility is something most companies don't care about. The importance of managing responsibility is often overlooked, but it's critical and it will determine whether your startup can grow from a good idea into a great company.

"You should look at yourself in the mirror, the company's top managers," said Reese, "and you're looking at the mirror and you see the problem." ”

Most of the problems on the road to innovation can be attributed to top management. They linked the company's financial system to its incentive system. But it is this fiscal system that will put entrepreneurs at a disadvantage.

"This system needs to be underpinned by a very high return on investment and positive, massive forecasts," says Reese. "But sometimes it's hard to predict how far an untested new project can go." This, in turn, will have an impact on the system and lead to the emergence of the ' success Theatre ' (Success theater) mentality. ”

In the "Success theater" mentality, the entrepreneur will set up a business template for their unknown and unforeseeable ideas to make their ideas look like a high ROI project. They overestimate the benefits of the project and underestimate its costs to make the project attractive to investors.

Reese called the phenomenon "a plausible promise." Yet such promises can make entrepreneurs stumble if their erratic predictions end up not meeting investors ' expectations.

How to solve this problem

If you want to break this cycle, you must start from the root. "A modern enterprise is different from a 100-year-old enterprise," says Reese. "Who in the world would want to buy a legacy enterprise and invest in an old company?"

It's time to confront your startup management responsibilities. Here are some remedial measures:

(1) Reform of the accounting system

It is time to use a different set of indicators and accounting systems to measure the process in emerging, unstable industries.

Old indicators apply only to mature industries and not to a fledgling start-up. Instead, the new metrics will allow start-ups to prove their value to investors without having to play a trick of "plausible promise."

(2) Establish a team of self-organization

In view of the failure of corporate strategy, it is important to establish cross-functional teams that can operate independently. In Ciplex, our organizational structure is a flat structure based on the team, which makes the company more flexible as a whole. Thanks to the flat structure, independent cross-functional teams are able to innovate more quickly.

Even failure in innovation does not matter, because it lowers the cost of failure. After all, Twitter was just one of a few projects to serve Odeo video-sharing services before the Twitter development team saved the company millions of.

(3) Defying innovation

"By keeping the status quo you think you've made a safe choice, but then you find out you're unemployed." Reese said.

Some companies, such as BlackBerry and Kodak, think sticking to the old path is a safe choice, but for an innovative company that can change the times, this path is undesirable.

The first step for entrepreneurs to save their start-ups is to understand the issues of management responsibility. It's time to put the mindset of the "success Theatre" behind you, and the entrepreneur has to rethink what it takes to measure success.

The author of this article, Ilya Pozin, is the founder of Open Me (a company that acts as a social greeting and gift giver) and Ciplex (a digital marketing intermediary), and is also a columnist for Inc magazine, Forbes magazine and LinkedIn.

Via TheNextWeb