Recent studies show that founders of start-ups with a practical leadership style are more likely to retain their employees and see their businesses grow successfully.
The results are particularly applicable to knowledge-intensive technology companies where, according to the researchers, human talent is the main resource that influences business performance.
The founders are usually very busy – recruiting key employees, raising money, looking for a board, developing partnerships, defining a strategy, and organizing the organization, to name but a few. According to the researchers, it often comes to an intensive care and supervision of employees.
“Given the fact that many young companies are facing technological and business risks, the founders are more likely to focus on solving these issues than the day-to-day aspects of human resource management,” the document said. “Our results suggest that … more intense people management is a worthwhile investment in a founder’s time.”
Effective HR management is not just about maintaining paperwork. “They also need to focus on the strategic part of employee management to ensure that they work on the rights tasks, get the feedback they need, and are satisfied with their business.” Explains Rembrand Koning, Assistant Professor, Strategy Unit , Harvard Business School, co-author of the study.
“OUR RESULTS RECOMMENDED THAT … INTENSIVE MANAGEMENT OF PEOPLE IS A FOUNDATION TIME INVESTMENT”
The Koning Discussion Paper, published in May, is titled “Learning to Manage: A Field Experience in the Indian Startup Ecosystem” (pdf). The co-authors were Aaron Chatterji and Sharique Hasan, both Fuqua School of Business at Duke University; and Solene M. Delecourt of the Stanford Graduate School of Business.
By studying 100 founders of Indian software companies, they found that those who practiced more hands-on management – keeping a close eye on employees with regular reviews – set expectations,
Learn from the network
If this intense style is not self-evident to a startup manager, the good news is that he can be learned, says Koning.
“What’s encouraging about this article is that we’ve found that practical management can be learned over time, we believe that many companies can improve, and when we get people to better manage, we think, that they can hold more employees and be more successful.
Through social interactions with other leaders, founders can not only find out why they should use these tactics, but also how to implement them.
To investigate how these management skills can be gained through peer networks, the researchers partnered with the. (ISPIRIT), a think tank that is growing software. The team brought together the founders of 100 growing software companies in India for a three-day retreat.
Before retirement, participants were asked about the frequency of four management practices: providing structured feedback, performing performance assessments, setting expectations, and setting common goals. Then they grouped the founders into 50 pairs and focused on couples where a high-intensity manager was associated with a founder who described himself as a freelancer. (An active manager can use these intense exercises once a week, while others can only do it once a month.)
During the retreat, the founders discussed their business challenges and were asked to advise their partners on management and strategy.
On the last day, the founders made a list of changes they wanted to make when they returned to their company. Founders associated with IC managers tend to have elements related to management practices. Eight months later, the founders were interviewed to deliver the results of the changes in their businesses.
Practical advantages in practice
Founders who were advised by the founders rather adopted a similar style of leadership. The majority of these founders made at least one significant change after retirement. “The founders talked in detail about the implementation of certain actions,” says the newspaper. “The founders discussed, for example, hiring a new product manager or reorganizing their team to be more effective.”
“Nobody wants to work for a boss who does everything or gives (the workers) only the bad parts of the job”
Founders who adopted a more intense leadership style had positive results: these companies retained a higher percentage of their employees and less likely to graduate eight months after retirement. The founders, who were advised by a larger number of managers, found that 19.6% fewer employees left their company and that these start-ups would be about 20% less likely. Founders who already had a more practical management approach could increase recruitment rates.
Researchers point out in the paper that “we do not say that better management is always better, on the contrary, excessive” micro-management “could have a negative impact on business growth, and effective managers ensure that their employees meet the company’s goals understand and trust that they will take on important tasks and make important decisions.
It is easy to confuse micro-management with practical management, says Koning.
“The founders of start-ups are having a hard time getting rid of themselves, so they conduct interviews with customers and try to hire people, but nobody wants to work for a boss who does everything or gives the workers only the most difficult aspects,” he says.
Businesses should invest in peer learning
Companies often opt for formal training programs or consultancy contracts with trainers who teach entrepreneurs how to run their businesses. But these interventions can be expensive, do not work often, and are sometimes impractical for managers who work full-time in their business, the newspaper notes.
Koning hopes that research shows that founders need to search for mentor networks to find intensive management techniques that will enable them to more effectively manage and develop their own teams.
This type of exchange is often more personalized than formal training because the founders tailor the discussion to the specific situation of the company and share their own experiences. These discussions are unlikely to occur in networking cocktails. It may need another researcher to discuss it further, says Koning, whose research focuses on disseminating knowledge, technology and people. Companies.
“If you think about creating a network of boards to discuss the strategic direction of your business, it can be difficult, so think: If I talk to the people I know, who else should I talk to? “Who should choose to ignore?” said Koning. “It’s a big decision.”
In fact, it could even determine the performance of your business.