Change Management in Startup

Last month during my flight from Delhi to Mumbai, I was seated next to a gentleman, What started as customary weather talk turned out to be an insightful conversation on Change Management. The gentleman turned out to be a fellow CEO who was grappling with change his startup is so successful that in the past year it had increased its revenue and employee count by more than 60%. Surprisingly the CEO was concerned about whether his start-up could do a better job of managing its growth. He thought the start-up could improve its structure, systems, and shared values. Needless to say I was impressed as very few CEOs focus or get worried by change management so early in their startup career.

You can take a clichéd phrase “Change is the only constant” and apply it to any enterprise as you would to people. Change is not only inevitable, it is essential for business survival, so it is vital that everyone in your business is ready to deal with it. Change management is essential for business growth but its success depends on the support of all stakeholders.

Change is about the only constant in the world of startups. Despite startup’s focus on changing the world, they often forget that they too have to change rapidly and often as the market evolves. For too many, it’s too little, too late and they are left chasing the water, which has already flown under the bridge.

If your people and your startup do not change, statistics say you won’t survive. It’s up to you to get out of your comfort zone and make things happen in your startup, rather than let things happen to your startup. We all develop our own way of doing things, our own way of getting the job done, and even the slightest change can have a significant impact on this, frequently leaving people feeling uncomfortable that their previous way of doing things has been affected.

We as head of the business are very excited by ‘change’ in our businesses, especially when they are associated with positive outcomes. As we are part of the change management process, we can often only see the positives and it is easy to become frustrated when some of our team just doesn’t seem to ‘get it’

Resistance and inertia to change can happen for a numerous reasons; most people in an organization are of the opinion that they are quite happy working the way they were before. They will accept changes but do not fully understand the reasons for them and therefore struggle to apply them to their daily working lives or change their old routines.

That happens because in an early-stage start-up, you’ve typically got a team of people working very closely together with laser focus on brokering and executing the deals without processes and controls that seems cumbersome later on.  You don’t tend to have the kind of “process flow control” issues that larger companies do, where you need change review meetings to balance competing priorities and competing schedule issues.

While initial processes and systems in many organizations typically focus on getting “That Business”, as organization grows, it is often important to build systems that measure qualitative factors such as employee and customer satisfaction, learning, innovation, and growth.

Most startup struggling to manage rapid growth either aborts the effort and toil required to build change management and implement new systems and process for three major reasons …Attrition increases as lot of old employees leaves as they either cannot cope with change or are resistant to change, Process implementation takes time and effort from leadership team who themselves sometime try to wriggle out of it and lastly, absence of effective check and balances that would measure these changes on a periodic level and act on the learnings to take corrective measures.

Here are five steps to follow to improve the structure, systems, processes and shared values of your organization

  1. Awareness –How good are you and everyone on your team at proactively scanning the environment for opportunities, emerging trends, and customer feedback? This contextual focus is critical to innovation and survival – offerings at the right time do the trick.
  2. Customer focus –The more everyone in the startup is obsessed with satisfying customer needs and providing better customer service, the more effective the startup will be in adapting to change. Provide direct customer contact to everyone, back it up with periodic training and see the change taking place
  3. Agility – Agility represents a startup’s ability to immediately and effectively engage everyone in pending changes and innovations. It starts at the top with the founder and CEO, but has to extend quickly to the bottom of the organization. This requires leadership, teamwork, and trust at all levels.
  4. Implementation – Every organization needs to have specific processes in place to facilitate change, including regular effective communication, reward systems that reinforce desired change behavior, and accountability for results. These won’t work in an autocratic or dysfunctional management environment and need to be driven by a committee comprising of people at all levels.
  5. Build a culture – Change management is hard work, and requires creativity sometimes in contradiction current with task orientation. People need to have the right attitude, and make the choice from the beginning to be ready to change at any time. They need a sense of urgency to handle change, and confidence in their leaders.
  6. Course correction –This is the ability to appropriately analyze problems, assess risks, and take responsibility for problem-dictated and market-dictated changes, while still sustaining the day-to-day business activities. It’s called the management of unplanned changes, or how well your startup reacts to crisis.

Companies usually benefit more from change they are prepared for versus change that is imposed on them. In addition to preparing for change, companies should also learn how to identify the need to change and to manage it successfully. This learning capability will allow companies to address future problems and take advantage of opportunities more quickly and effectively than their competitors.


CEO & Managing Director,  NeoNiche