1) Failure to recognize the ideas and creativity of individuals
As I’ve said earlier, people are people, they are not prospects or units of labor. Naturally, as startups grow, interactions between the staff become limited or segmented. This makes it exceedingly easy to slip into the thinking that these are just employees that have no thoughts or opinions outside of their specific role.
The key is to recognize the subjective experience of people within a company and giving them an outlet to share their ideas and creativity with the senior leadership.
Even if their ideas are not put into action, the very fact that they are given the opportunity to feel like they are a part of the decision-making process goes a long way. They feel like their intellect has been respected and that their opinions matter.
This may seem trite and cliche but it's not.
2) Failure to explain the reasons behind strategic decisions
This is particularly endemic in the startup world where things are moving at tremendous speed. It usually goes something like this:
The company has no money, employees, or customers.
They build a team.
They start to get traction.
Weeee, MONEY!!!
Then traction spikes and things go crazy, forcing the senior management has to make high-level decisions quickly.
Now, a company that used to sit around together plotting and planning begins to shift into top-down decision-making.
Orders are given and are expected to be followed.
The team no longer feels like a team. It feels like a dictatorship.
If the company leadership wants to gain the support of its people, it needs to explain to them the reasons behind the decisions and explain the benefits that it will have on the company as a whole as well as each individual person. This is not babying employees, this is treating people with respect.
When people understand and agree with the reasoning behind a decision, they can rally behind it. If they don’t, then they will consciously or subconsciously try to subvert the change and sabotage forward momentum. If people are faced with an information gap, they will assume the worst. This is a bad place to be, for both the company and the employees.
Even a sound strategy can be derailed if the reasons behind it aren’t explained.
3) Failure to set clear expectations
Whenever a new direction is set for a company, it must be made explicitly clear what the roles and expectations are of each employee.
Again, information gaps create fear. When people don’t know what is expected of them they react in one of two ways:
A) They become paralyzed by indecision
B) They try to do too much at once and fail to be effective at anything
Setting clear expectations shows people exactly what metrics they are going to be judged on. This helps them decide how they should allocate their time.
By knowing these metrics, there should be no surprises. They will be able to judge for themselves how well they are doing in their role instead of needing an overseer. But, when roles are ill-defined and tasks are passed around haphazardly, internal conflict and ineffectiveness sets in and a downward spiral ensues.
BONUS: Failure to Lead From the Front
This may be the most important factor that effects company success.
As Napoleon said, “the moral is to the physical as three to one”.
Even when understaffed and underpaid with minimal resources and external resistance, the moral of the team can overcome a tremendous amount of obstacles.
But, everything trickles from the top down.
The leadership of a company needs to show that they are willing and able to fight on the front lines, putting in more hours, effort, and energy into the building of the company. When people feel like they are working alongside someone with not just passion and vision, for those are a dime a dozen, but true work ethic, they will rise to that level.
But on the flip side, when leadership passes down unwanted assignments to the lowest level people become bitter and resentful.
This is not to say that leaders should waste their time on low-leverage activities all day, but every once in a while they should set the tone for the company that they are not above taking the trash out, so to speak.
"For what the leaders are, that, as a rule, will the men below them be" - Xenophon
Obviously, this is far from an ‘all-inclusive’ list of company failures. But, by addresses these key factors, many companies can avoid the traps of their fallen comrades. They can unite their team under the banner of a cause they believe in with leadership they respect.
As I’ve said earlier, people are people, they are not prospects or units of labor. Naturally, as startups grow, interactions between the staff become limited or segmented. This makes it exceedingly easy to slip into the thinking that these are just employees that have no thoughts or opinions outside of their specific role.
The key is to recognize the subjective experience of people within a company and giving them an outlet to share their ideas and creativity with the senior leadership.
Even if their ideas are not put into action, the very fact that they are given the opportunity to feel like they are a part of the decision-making process goes a long way. They feel like their intellect has been respected and that their opinions matter.
This may seem trite and cliche but it's not.
2) Failure to explain the reasons behind strategic decisions
This is particularly endemic in the startup world where things are moving at tremendous speed. It usually goes something like this:
The company has no money, employees, or customers.
They build a team.
They start to get traction.
Weeee, MONEY!!!
Then traction spikes and things go crazy, forcing the senior management has to make high-level decisions quickly.
Now, a company that used to sit around together plotting and planning begins to shift into top-down decision-making.
Orders are given and are expected to be followed.
The team no longer feels like a team. It feels like a dictatorship.
If the company leadership wants to gain the support of its people, it needs to explain to them the reasons behind the decisions and explain the benefits that it will have on the company as a whole as well as each individual person. This is not babying employees, this is treating people with respect.
When people understand and agree with the reasoning behind a decision, they can rally behind it. If they don’t, then they will consciously or subconsciously try to subvert the change and sabotage forward momentum. If people are faced with an information gap, they will assume the worst. This is a bad place to be, for both the company and the employees.
Even a sound strategy can be derailed if the reasons behind it aren’t explained.
3) Failure to set clear expectations
Whenever a new direction is set for a company, it must be made explicitly clear what the roles and expectations are of each employee.
Again, information gaps create fear. When people don’t know what is expected of them they react in one of two ways:
A) They become paralyzed by indecision
B) They try to do too much at once and fail to be effective at anything
Setting clear expectations shows people exactly what metrics they are going to be judged on. This helps them decide how they should allocate their time.
By knowing these metrics, there should be no surprises. They will be able to judge for themselves how well they are doing in their role instead of needing an overseer. But, when roles are ill-defined and tasks are passed around haphazardly, internal conflict and ineffectiveness sets in and a downward spiral ensues.
BONUS: Failure to Lead From the Front
This may be the most important factor that effects company success.
As Napoleon said, “the moral is to the physical as three to one”.
Even when understaffed and underpaid with minimal resources and external resistance, the moral of the team can overcome a tremendous amount of obstacles.
But, everything trickles from the top down.
The leadership of a company needs to show that they are willing and able to fight on the front lines, putting in more hours, effort, and energy into the building of the company. When people feel like they are working alongside someone with not just passion and vision, for those are a dime a dozen, but true work ethic, they will rise to that level.
But on the flip side, when leadership passes down unwanted assignments to the lowest level people become bitter and resentful.
This is not to say that leaders should waste their time on low-leverage activities all day, but every once in a while they should set the tone for the company that they are not above taking the trash out, so to speak.
"For what the leaders are, that, as a rule, will the men below them be" - Xenophon
Obviously, this is far from an ‘all-inclusive’ list of company failures. But, by addresses these key factors, many companies can avoid the traps of their fallen comrades. They can unite their team under the banner of a cause they believe in with leadership they respect.