Good governance is not just for big businesses. New businesses and startups must establish strong governance early on to increase their chances of success during volatile stages where they are finding their feet in the market. Here are a few things you should bear in mind, and why securing team members with experience early on will enhance the governance of your organisation.
Develop a Structure with Experienced Leaders
This first point might be glaringly obvious to some, but it’s surprising how many startups skip this during the early stages of their development. Often companies that launch on a ‘shoe-string budget’ are wary of spending too much on employees. The result: employing less-experienced individuals who are immediately placed in high-risk positions (such as managing all external marketing or sales). From our experience, we have also seen many start-ups employ individuals into extremely broad roles as another way of keeping employment costs down, and are encouraged to work “flexibly”, often managing a series of actions that don’t interlink with a particular business goal.
When starting out, we can’t stress how important it is to develop a core team of industry professionals that are able to lead projects. These ‘leaders’ will act as the cornerstones of your business, and will help develop different aspects of your organisation as it continues on its journey. For example, if you’re looking into how to market your organisation’s product or service, employing an individual to be a marketing manager with industry experience will give you valuable technical knowledge and a vision built on past actions (i.e. knowing what works and what doesn’t).
At this stage, you can begin to establish a structure in your organisation; establishing leaders in certain fields will allow you to develop a range of teams that are focused on specific aspects that contribute to the goal of the organisation. On a simple scale, this could be creating a sales team and a marketing team – each of which being lead by an industry professional.
Whilst a strong structure will ensure the focus and efficiency of tasks to be increased, it more importantly establishes ‘accountability’. As discussed in one of our previous articles titled ‘Good Governance for Small and Aspiring Businesses‘, many small business founders try to manage several (if not all) aspects of their organisation, making it difficult to keep track of where problems might have arisen and what changes need to be made.
So, in appointing those with experience as team leaders, you are more likely to gather valuable feedback and information on how each part of your organisation is performing, as well as whether there are an issues that need to be addressed. Founders must therefore distribute responsibilities to different leaders; they will then be uncharge of ensuring that their individual team is performing the correct actions to contribute to the overall goal of the organisation, and can feedback to the founder when required.
Get a Good Governance Team Onboard
Creating a good governance team (board or committee) is a must for startups. This team will make decisions about the future of the company, and, by forming a team with experienced members or leaders, will ensure that you know why a decision was reached and the thought-process behind it.
A strong governance team made of experienced members is a plus point for investors and promotes confidence. It’s likely that they will want you to be transparent and explain who the members of your governance team are at their past experiences, in order to establish an idea of the value they will add to the organisation.
Craft a Positive Company Culture
Employing or working with individuals with a wealth of experience can also enhance your company culture and help you to establish a positive environment. They will understand why things should be done a certain way, and will know why some approaches or methods work over others. Overall, they will have a better understanding of what motivates individuals, ensuring that they have a good work-life balance whilst contributing to the goal of the organisation.
A word of warning however – you must also be wary of employing individuals with similar experiences. This can result in the development of a business with a one-dimensional outlook, as the team begin to share the same mindsets and outlooks. Businesses made up of a wealth of different individuals (with different industry and cultural experiences) encourages a positive company culture where ideas are challenged. Whilst this will inevitably lead to some resistance on certain projects or changes, it will create space for negotiations to take place where ideas can be enhanced by a community vision. Overall this will improve the way in which teams communicate and work together, as well as improving the information, content or services that your organisation delivers to its audience.