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Why Leading a Startup Differs from Leading an Established Business
October 18, 2019 | Category: Blog, Executive Coaching
Leading a startup from concept through to success means overcoming countless challenges.
With startups, the path to success isn’t clearly marked.
And once a startup is operational, not all founders want to (or should) become CEOs of the company they created. Having a CEO is essential, and startup founders who are unwilling or unable to make that transition will need to choose executive leadership for the business.
These executives will face some challenges of their own with a new business, and the challenges are different from those executives encounter when they go to work for a long-established business, according to a paper in the Journal of Leadership Studies. With startups, executive leadership must develop a long-term vision, they must develop “optimal persistence,” and they must be able to lead through times of chaos.
When businesses are new, relationships with suppliers, partners, and the community at large are new, and executive leadership must ensure that all these relationships grow in a healthy manner. The leadership qualities necessary for leading a startup aren’t quite the same as the qualities necessary for leading in an established organization.
Why Humility Is a Key Quality of Startup Executive Leadership
Dave Carvajal, who has helped companies like Tumblr and Shutterstock build out their executive leadership, says that humility is a key quality he looks for in executive candidates for startups. This may seem counterintuitive in the startup world, where new companies must project strong confidence to win the funding and visibility necessary to gain traction.
Carvajal, however, says that in order to learn and grow in the context of startup executive leadership, leaders must “have an openness that humility allows.” This humility is closely linked to agility and adaptability, which are also mandatory in an environment where best practices have not yet been established.
Building Structures vs. Operating Within Existing Structures
Working within leadership structures doesn’t confer the ability to create leadership structures from scratch.
He also says that the ability to build leadership structures is more important than the ability to work within previously established structures. Executives who have spent years or decades in established corporate environments may not have the skills necessary to create the leadership structures that startups need. It can be difficult to predict what type of leadership structure will work in a new business, and executives who have experience in creating such structures have an advantage over those who do not.
Qualities That Don’t Serve Startup Executives Well
Likewise, there are some qualities that may successfully fly under the radar at established businesses that are highly detrimental in the startup environment. Arrogance and self-centeredness are two of them. Indecisiveness is another. Making a startup successful often means making decisions quickly, while established organizations often have the luxury of more time in which to make decisions. And arrogance and self-centeredness can affect decision-making in harmful ways.
Finally, micromanaging is a practice that is detrimental to executive leadership in every company, but it is particularly destructive in a startup. For one thing, there simply aren’t enough hours in the day for micromanaging to work. For another, micromanaging implies that “best practices” have been nailed down, and this is rarely the case for a company that has only operated for a short time.
Executive leadership must mesh with the corporate culture, and it must be the right kind of leadership for the type of organization. Sometimes an executive who excels in the environment of an established business isn’t right for the highly changeable and often experimental nature of a startup.
Asked his advice to those looking to pursue leadership roles, Cronofy CEO Adam Bird tells The Startup, “Find a coach,” and I concur. Startups are different beasts than businesses that have been around for decades, and working in startup executive leadership can feel like going into the big game without a playbook. Executive coaching can help the startup executive navigate the leadership path of the startup even when the “map” is unclear.
Leadership development has many established processes that work in any business, but there are certain leadership qualities that must be emphasized or developed in the startup space.