There is more unpredictability, and hence more failure and disappointment in startups

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In this edition of “Leader’s Talk” series in Venture Upbeat I interview ‎Abhoy K Ojha, Professor of Organizational Behavior & Human Resources Management at India’s Premium Management Institute –Indian Institute of  Management Bangalore (IIM-B).

Prof Ojha has been involved with academic administration in various capacities at IIM B. He has served as Chairperson (Admissions), Chairperson (Post Graduate Programme in Software Enterprise Management), and Chairperson (Executive Education). He has also been an active researcher, having presented his work in conferences of repute and published in domestic and international journals, and has contributed to several book chapters.

In an upbeat startup ecosystem trying to scale up in the India and Asian context how important is organisational structure, and at what stage founders should focus on the same?

Organisation structure is important at all stages of the evolution of an organisation over its life cycle. The organisation structure that adequately supports organisation’s strategies varies during different stages.

At the first stage, the founders should ensure that formal roles and reporting structures are kept to a minimum. The systems and processes should initially be ad hoc to allow for “everyone to do everything” without any silos so that the organisation may pivot quickly. The key strategic decisions should be taken by the founder(s) or a core team and the rest of the organisational members should be focused on operational decisions to implement the strategic decisions.

As soon as a product/service find acceptance in the market, it is time for the founders to introduce the formal structure, typically a functional structure.  While retaining the strategic decisions, the founders should delegate the operational decisions as well as the strategic decisions related to the product/service to the next level of leadership. Also, roles and processes need to be introduced to ensure reliability and quality in dealing with the external world.

Also read: Scaling is hard: Here are 7 things Human Resources can do to manage it

Finally, be it a corporate or a startup it comes down to people. Do you think handling people in startups should be any different from handling people in a large corporate company?

Handling people in startups is even more critical than that in large corporations. There is more unpredictability, and hence more failure and disappointment in startups. It is rare for the first product/service to be successful or profitable, and keeping motivation and morale of employees high is a big challenge when things do not go as planned.  The founder or a close confidant needs to be an excellent people person and coach to guide the others through the ups and downs.

What is the importance of the role of Human Resource in a startup context and handling the so called Gen Y and now Gen Z?

Dealing with employee issues in a start-up is a big enough issue, which gets even bigger when the employees are from the Gen Y or Gen Z groups. While the earlier generation was conservative and fearful of failure staffing startups was a challenge. Now most startups are facing the opposite challenge. The young seem to be attitudinally more adventurous and are willing to join startups but have little or no experience of failure. Hence, managers have to devote extra efforts to manage their optimism when things seem good and the pessimism when the failures occur.

How can academic institutes like IIM-B can help in the Indian startup ecosystem? Anything you would like to share which is already being done?

IIMB is already at the heart of the Indian startup ecosystem through the NSRCEL. It not only incubates start-ups but provides access to mentors, financiers, and potential customers, and an environment for rich interactions among entrepreneurs. It also has executive education programs sensitising entrepreneurs (typically technology geeks) to issues that they need to attend to be successful.

Finally, your advice to startup founders on handling people and mistakes they should avoid doing or be wary of?

Founders should be very careful who they hire to ensure only those who are passionate about the idea are recruited – they will be better able to handle to difficult times and lack of financial benefits in the early days. Avoid hiring people from large organisations at the earliest stage. These people may be relevant at the next stage. They should also share information as transparently as possible.

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Pavan works for a Bosch startup HQ in Bangalore and writes for his Venture Upbeat column in e27. His interests lies in philosophy, yoga and theatre. “Leader’s Talk” Series is a special series in his column where Industry and academic stalwarts share their journey.

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