How to Structure Your Startup for Success

Imagine the first days of your new company. You have just hired employees and maybe even put a management team in place. What do you expect your first real challenges to be?

Meeting Organizational Challenges

According to Jens Lapinski, Managing Director at METRO Accelerator for Hospitality, some of the first challenges will be organizational. “Everybody within your company will have a tendency to do everything at the same time,” says Jens, who runs a workshop for hospitality startups at METRO Accelerator. This is a common problem with companies at this stage. Jens has experienced quite a few strange situations, as in one company, where the CEO reported to the co-founders as shareholders while telling the co-founders what they should be doing at the same time.

How do you, as CEO, resolve this? First of all, you should be aware that the reason for this misalignment is that you have not yet clearly distributed responsibilities within your startup. One of your first challenges will be to define everyone’s responsibility or role. Looking at the organizational structure is important for entrepreneurs, even if you start with just a few employees.

Ever wondered how our Accelerator workshops are held? No worries we sneaked in with a cam and video-taped Jens 🙂

Defining Roles through Involvement

How are responsibilities or functions organized within your company? As you go along defining responsibilities, you will notice that each person’s tasks are not always clear from the start. Responsibilities are often implied but not explicitly stated. Moreover, they can be understood differently by each member of the team. Identifying each person’s tasks is a process that can take many months or even longer. Even you, as the founder of your company, might not yet know who is supposed to be doing what.

Jens emphasizes the importance of involving everybody in this definition process. A team approach not only helps in clarifying each role or function, it also increases the acceptance and implementation of these roles.

What Does Everybody Deliver?

Simply defining what everybody does is not enough to build a strong organization. “People often describe their job as what they do, when they should be talking about what they should achieve”, says Jens. Therefore, the definition of responsibilities has to focus on output. The key question is what each individual or function actually delivers to the company.

According to this model, marketing personnel generate leads for sales and a sales person closes deals. The job of engineering is to deliver a product that works, whereas the R&D team delivers technology that adds value to the product.

Think Output

All in all, a strong focus on output throughout the entire organization is a key factor in a startup’s success. Apple founder Steve Jobs is famous for approaching employees asking them “What do you do within the company?” According to this legend, if the people could not identify what they contributed to the company, Jobs would fire them on the spot.

The Job of the CEO

This brings us to the next question: What is the job of a CEO? A common mistake of founders or CEOs is that they misinterpret their roles. They tend to involve themselves in how people should do their jobs. This is often referred to as micromanagement.
CEOs who do this create a bottleneck situation, since every action within the organization has to involve them. According to studies at Harvard Business School, startups cannot revolve around their founders if they want to succeed.

“Your job as a manager is not to explain to employees what they should do,” says Jens, “it is to help them clear out obstacles they might face on their job.” This requires attentiveness and the ability to listen to others and find out what kind of help everyone needs. The real challenge for managers is to know just enough about each function so that they can support employees effectively.

Recruit the Best Mentors You Can Find for Your Startup

Because entrepreneurship is so challenging, Jens recommends having a mentor at your side you can reach out to when you have questions. According to Rhett Morris, who leads Endeavor’s research on High-Impact Entrepreneurship, they are the secret weapon of a prosperous startup. A good mentor can increase the chances of success more than anything else.

Functional Startups Deliver

If the people in your company understand what they are asked to deliver, you will notice that the performers within your company will drive out the non-performers. It is a natural process.
According to METRO Accelerator’s managing director “dysfunctional organizations are full of people that do not deliver. Functional organizations on the other hand are full of people that do deliver.” A clear understanding of each person’s contribution will bring out the best within your company and create a chance for everybody to grow and excel.


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