Signs of Poor People Management in Startups

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Startups, like many ventures in their beginning, are expected to have their share of hurdles. It’s almost like a rite of passage. Sadly, not everybody makes it after their first year. A 2019 study finds that 21.5% of startups fail in their first year. Some at 30% fail in the second year, 50% in the fifth year, and 70% in the 10th year of business operation. If you wondered why, the common reasons for startups failing are budget mismanagement, failure to define a target market, lack of research, the souring of relationships between partners, and lack of expertise.

Other than a faulty business model or lack of knowledge in an industry, a business failure can be linked to poor people management. To improve business performance, people management involves organizing employees and forming skilled teams. Managing talent to optimize company performance eventually leads to increased morale, productivity, and sales. It’s like a domino effect. If you know how to be in charge in the right ways, this will yield great results for your organization as a whole. A business is only as good as the parts that keep the engine running. Here’s how you know a startup is doing the opposite.

Goal Ambiguity

The root of a startup’s identity is its ‘why’ and ‘how.’ Having a vision and mission in place determines the bigger picture or the ultimate goal a small business wants to achieve. Bad managers fail to communicate how this can be achieved and what outcomes they expect from employees.

Startups are yet to set a functional and structured workplace, so determine what’s needed and figure out a systemic way of achieving it. Start with general goals. For instance, marketing. From there, break down your needs like brand awareness, social media engagement, generating the content, and more. Break this down a little farther into the employee level. Set clear job descriptions to delineate the roles and functions of each. By setting objectives, communicating expected outcomes, everybody will have a clear picture of a big goal and know how to contribute through their roles.

Increased Attrition Rate

In the early delicate stages, there are changes almost every day as decision-makers figure out what works best for the business. Finding a structure that suits best for everyone could entail adjustments on top of transitioning for both new and existing employees. All these changes can stir doubt, confusion, and insecurity among employees, which isn’t ideal if you want to instill loyalty. This is never good news if you seek stability in your organizational workforce. Moreover, it’s costs money and resources to fill in new positions.

When it comes to attrition rate, job satisfaction has a big contribution to it. Factors such as workplace environment, stability, flexibility, independence, and support from management impact employee job satisfaction, one study finds. Incentivizing extra effort, acknowledging hard work, fostering open communication, and holding training for career growth and advancement are a few ways to help increase job satisfaction and security.

Decreased Productivity

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The beginning of startups can make the most inspiring and motivating of stories. Although the aftermath is shiny, the process required a lot of hard work. It’s important to unveil the romanticizing and see the process for what it is: hectic.

In this stage, some roles overlap with others. Although trusting in the process is vital, the manager should correct this as soon as they can. This is only one of the many things the business still has to work on, but it sure helps if the workplace fostered open communication wherein feedback, suggestions, and brainstorming have a safe space to exist. However, given that everything’s in the early stages, surveying should be a practice. This is a great way to gain insight on what to improve in the workplace. Who better to ask than the people doing the work?

Going back to roles overlapping, this is clearly a fault in management. Although this can be corrected as soon as it’s identified, how should this be avoided in the future? By getting to know your employees. Know where their skills and potential lies, and capitalize on that. Focused and accurate application of skills is way more productive than fulfilling multiple functions at a time.

The latter is inefficient, takes time to accomplish, and does not promise accuracy. You might end up hiring a bankruptcy lawyer because it’ll trickle down to decreased sales. Remember, having employees spread themselves thin is a recipe for burnout.

Being Indifferent to Feedback Form Below

Being a forward-thinker is something every manager or decision-maker should be if they want the business to grow. Growth can only be found in change. As a result, decision-makers should be more adaptable and receptive to criticism, especially if it’s from the people who do most of the paddling, so the business doesn’t end up treading on water. They should change their mentality from ‘everything I say goes’ to ‘we’re all in this together.

Although they aren’t the only indicators of bad people management, they should suffice to alert you. If you don’t want your business to become a statistic, do your part to fix the things that might contribute to it.

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