The case for learning startup management
Success rates for startup businesses are staggeringly low. Yet, everyday thousands of people around the world make the decision to engage in business or start a non-profit and believe that they will defy the odds. After all, one of the most effective ways to change our world, create value and be well-compensated is through engaging in business. An organization gives us leverage to do many things that we cannot do by ourselves.
Individuals who run successful businesses gain power to shape their own destiny. Though operating an organization can be challenging and perilous, it is often a powerful way to fulfill our God-given purpose. An organization must address both future growth and exit strategies. There are times when our purpose will advise us to dissolve the business. Though just as likely, we may get ready to move on to yet bigger and better ways of creating value.
Entrepreneurial management gives us the tools to unleash our potential. It is the discipline of consistently covering all the bases, while focusing on the important. Management is stewardship of resources on behalf of owners to the greatest benefit of everyone. Management principles can help us be effective in everything we do. But what if we need to start something new? Traditionally, this was left to the few entrepreneurial types, who, we were told, are very different from the rest of us in their innate abilities. Yet, at the current rate of technological change, it may no longer be an option to rely solely on these natural born entrepreneurs. Today, to be effective stewards, we must innovate and initiate in business and in life.
Flexibility and speed of change are forcing more and more of us to start and manage various aspects of our lives, rather than rely on someone else to do it for us. It is no longer acceptable to leave the entrepreneurial tasks to others. We must learn the skills that will help us succeed. While management is something that is traditionally taught in colleges around the world, it has proven to be a hard discipline to truly master. The fact that traditional educational system has failed to produce consistently successful managers does not negate the need for learning the discipline. Rather, it points to the need of hands-on learning that is typical of other hands-on trades.
It is possible to learn and apply management principles in order to improve business performance. At some level it is for everyone, since all of us need to manage time, money, resources and relationships. There are a few people that naturally gravitate toward making decisions and being responsible. Nevertheless, many of us need basic understanding of business subjects should we ever need to navigate the waters of business and find business partners with skills to succeed. Studying all aspects of entrepreneurial management will help spare the headaches of learning by trial and error and allow the advance to more complicated challenges quickly.
The foundation of any business is a team of entrepreneurial managers who are willing to try new things and have a long-term vested interest in the prosperity of an organization. Ownership and management are fused in many startups, but they do not need to be. It is often practical to have people with management skills manage a business that they do not own. Much wealth in the world is managed by managers who have no or limited ownership. Owner’s interests are the same as investor’s interests, and that is generating a return on investment. Management, however, chooses how to go about generating the return.
Management team, not the owner, arranges resources for the greatest common good. Management team attracts resources and controls them day to day, while owners exercise limited control. While interests of the business typically represent interests of its owners, a manager is held to a higher standard. Beyond responsibility to the investors, management team has responsibilities to the community, customers, workers and business partners, just to name a few.
In a lot of startups there is no clear distinction between managers and workers. The problem is that when the organization gets busy doing, it has no longer any time to be thinking. Even in the startup environment it is practical to set particular time aside for specifically managerial functions – planning and making sure plans are being followed. Some organizations even rely on outside consultants to meet with the team just to keep things on track.
Management is as much about working with others as about anything else. To be successful, a manager needs to function as part of a team. Managers must gel together and work as one unit. Working as a team offers the opportunity to make business fun. It is enjoyable to add value, especially when it is done in the fellowship of your peers.
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Oleg Tumarkin, JD, MBA, CSSBB is an Adjunct Professor of Business at Lakeland College and Concordia University of Wisconsin. His firm, FutureWorks, in partnership with Bucket Brigade and AKS-Labs provides business coaching and Balanced Scorecard implementations. His life’s passion is the development of a universal business measurement and management system that would cause management in to the realm of a repeatable, replicable, yet humane and flexible science.
