This time last year our start-up quadrupled in headcount from two to eight people within four weeks. From being a fresh-faced graduate analyst in an investment bank a year before, I had suddenly been catapulted into the CEO position of a small (but high-growth) company.
The past year has been a baptism of fire. However, the key thing I’ve learnt (after a lot of things going right and wrong) is that effective management can be a huge competitive advantage. This is so important for us as a start-up taking on incumbents hundreds of years older and hundreds of times bigger than us. Here are my seven key tips to getting it right.
1. Have a business partner or adviser who thinks differently from you
Two heads are better than one is a universally accepted heuristic. However, this is usually not the case if the second person is too similar to the first. While it may result in a quicker and more agreeable consensus, if one person is wrong, it’s like both will be wrong. You need people who are opposite but complementary.
When my co-founder and I decided to start a business together, we recognised this early on and realised that when facing problems we generally agreed on the end but hardly ever agreed on the means to get there. Having someone like this to help think through management problems has been the most useful thing in the past year. Quite often I will be convinced of my solution, only to have it ripped apart by my co-founder, who turns out to be right (in hindsight).
2. Tell people why something needs to be done, not what
In classical microeconomic theory you count labour and capital as ‘factors of production’. Economics has a tendency to forget that humans are not ‘factors of production’ but living and breathing beings with needs, ambitions and emotions.
We found very quickly that telling people ‘what’ to do made them feel like a machine, something that can be bought and replaced. Staff morale was low and we as managers felt like guilty parents or schoolteachers. We then started explaining ‘why’ they were doing something; this gave their work meaning and purpose, as well as a motivation to do it to the best of their ability. A side-effect of this was that we also spent less time teaching ‘how’ to do something as our team was motivated to figure this out themselves. Productivity and morale shot up.
3. Focus around a single mission
Simplicity is a powerful thing. It helps people prioritise and waste less mental capacity in figuring out what to focus on. Within a few months of everyone joining, we got feedback that team members were having trouble in focusing, working together or effectively using their time. We then worked with the team to figure out one specific goal we should all be focusing on that would help everyone prioritise their work effectively. We translated this into individual monthly goals so every member of the team could play their part in the mission, knowing others were doing this too. This resulted in all team members working together more and supporting each other, knowing that this would be increase the chances of success.
4. Automate processes if you can
No one likes doing boring, repetitive tasks. This not only reduces team morale, but reduces a team member’s feeling that they are developing personally and professionally. Why ask humans, who have the capacity to be creative, spontaneous and collaborative, to do work that a computer can do?
We ask all our team members to think critically about tasks they do frequently that can potentially be automated with software – either bought or built internally. We then automate these functions so that our talented and creative team can add value to the organisation and do work that they find interesting and challenging. That way your organisation can achieve more with less.
5. Eliminate internal formalities
Everyone hates formalities in real life, so why do we insist on useless formalities internally at work? Why wear a suit or formal dress in the office when you’re not meeting any clients that day? Why spend six seconds typing ‘I hope this email finds you well’ or ‘kind regards’ to the person who sits opposite you? All this adds up in cost, time and no upside. We’ve eliminated nearly all internal email from the use of internal messaging systems; use task management software to communicate to-dos; use only documents we can collaborate on together and in real time, and have no dress code. This makes everyone happier, saves time and reduces cost.
6. Use data to let people know how they’re doing
Too many performance reviews are subjective. Too many marketing campaigns go out because the person with the loudest voice said it would work. Too many product features get built because one person thought it would be cool. People get discouraged if they feel their hard work is being ignored or not rewarded.
Being a tech company with a tech product means we can measure everything. We have live dashboards of all our KPIs accessible by anyone in the company and all decisions are made by a combination of data and experience. This means that when a new feature is built and works, the team and individuals responsible can feel personal satisfaction that their idea worked and created value for the company.
7. Don’t be the bottleneck
Management overhead is a real problem. This is generally caused by managers who are control freaks, averse to change, don’t trust their team, and think they always know better than their team members. This all results in suboptimal decisions being made slowly by one person with incomplete information, and complete disengagement from all other team members.
The reason we hired smart, bright people was because, in order to move fast and be efficient, we knew that at some point very soon we would have to stop making all the decisions. We needed people who could make decisions as good, if not better than us. For each issue or goal we have in the company, people create a separate ‘splinter’ team, with whoever’s personal goal that impacts most, heading up the project. This means that, in theory, regardless of job titles, anyone can be a manager and make decisions collaboratively.