The startup ecosystem has taken the world by storm, and the Indian economy has also been witnessing its share of the global entrepreneurship movement. The internet is flooded with rags to riches story, but as per an estimated 90 percent of startups end up failing. While you might have reached reading the article at this point, probably 40 new startups have surfaced with 100 million new startups every year. This means that 85 new businesses just shut down! Starting a business takes many efforts, but running it profitably is the immense challenge. If you are a budding entrepreneur, have a look at some of the common reasons for the failed startups:
Being the Rambo and act as a one-man army for all trades:
If you’re trying to do all the work on your own or micromanaging the entire company, this is undoubtedly not healthy or sustainable in the long run either. Consider that even if you are a software company developing incredible health apps, reinventing HR and Payroll Software by yourself is the last thing you would do. It’s oblivious because there are companies who specialize in it and you can benefit from their expertise. Each employee needs a proper workflow distribution and a sense of autonomy to execute their workloads. Giving your team the space to exhibit their skill set in order to execute independently is absolutely essential. As per Gallup, 87% millennials consider professional development and career growth opportunities of paramount importance for their careers. Allowing your team to have space will help build trust.
Improper interpretation of business objectives:
Every business is conceived with a vision, and it is followed with basic outlining of functioning. The later stages involve detailing with learning for improvements. All of these exercises need to be translated into the company’s functioning. Every portion of the work is to be distributed to a particular employee. The improper interpretation of larger picture derails the entire operations and results in a complete deviation from expected results.
Absence of firm leaders, the vision and directed efforts:
It is not the strongest or the most intelligent who will survive but those who can best manage change. –Leon Megginson
Even if you hire the top brains for each profile, the absence of firm leadership is essential. Startups are usually engaged in disruptive fields if not the unexplored businesses, and they also have rapidly changing internal structures. A responsible leader directly affects the morale and performance of every employee. Without them, employee engagement and retention always haunt the newbies.
We can certainly agree that most of these problems resonate with the strategic management of human resources. So let us have a look at how you can smartly tackle these systematic risks or even hitchhike your way all the way to the top!
Develop an Interactive and Collaborative Work Culture:
The paper-based documentation is neither relevant not beneficial to you. You shall have an interactive environment where each employee shares their feedback on the direction your business is heading towards. The systematic approach to accommodate suggestions, working on them and analysis is fundamental to manage a business efficiently. The specialist culture is not for the booming organizations. The value shall be given to employees who deliver on expected results over ones sticking to job profiles. All processes have to be in complete harmony with each other, and staff members should be able to work collaboratively. Intelligently monitoring them to guide all employees are equally required.
Automate whatever you could:
Why should you waste your time, efforts, and resources if you could automate processes? The measurement and management of employee performance is a tedious and lengthy process. If done manually, you’re on the road to an epic fail. There are advanced Performance Management Systems, which will allow you to scientifically improve productivity per employee for utilizing the existing infrastructure optimally. In case you are shooting for the stars, have a gun, and don’t rely on throwing spears! These dedicated solutions integrate and engage your workforce strategically to empower more exceptional performance, consistently. Early adoption of automation will benefit every organization irrespective of their field.
Translate your Vision, Mission, and Ethics Sensibly:
When Microsoft retracted Vista, it took them a total of 10,000 engineers and 5 years while Apple managed to deliver iOS 10 with only 600 engineers within 2 years. Having a clear understanding of your company’s vision and mission is essential for your employees to be efficient. Work ethics shall reflect the core strategy of your business, and therefore, the working policy should reflect the final results in totality. People Analytics is acknowledged to be essential by 84% of leaders surveyed by Deloitte in 2018. Continuous performance management software can play a pivotal role by interweaving your interests with employees’ KRA and KPI indices. Also, this dramatically improves employee experience, which 83% of HR Managers find extremely pivotal to success.
Hire the Correct Employees and Stick to your Goals:
As discussed earlier, we need to hire correct employees and keep them aligned to the central idea of performing in the desired direction. You have to develop a clear idea of the position and how you exactly want the employee to work. Corresponding job description and interviewing will save you from training an employee who doesn’t know what to expect and how to deliver. Once you’ve made the hiring slogging on your goals is a must. You have to configure a goal-setting framework to incorporate both SMART and OKR goals under a common strategy. Being a new organization requires to make use of every employee’s competency constructively regardless of the job profile. You have to build an accountability-driven system where employees act as joint stakeholders in the growth of the company. In 2017, Deloitte’s Global Human Capital Trends revealed that 70% of surveyed companies were reinventing their HR performance management process, with 76% of businesses completing the process only a year later. As an aspiring business, the focus on adapting to change within and outside the organization is an existential quest. While the market conditions and availability of resources is something over which you have limited control, especially as a new player, devising better operational procedures will increase your chances of success. However, we cannot rely on just-in-case management. The entire approach should have a strategic outlook to operations and bottom-down distribution of responsibilities, tasks, and goals.
- Have vision and mission statements for your business vision.
- Don’t do Rambo! Hire the right talent and allocate responsibilities while empowering them.
- Automate everything apart from the core business functions. Use Performance Management Software to lead effectively.
The secret to running a profitable startup is to align your business vision with your workforces’ aspirations and working patterns in general.