Start-Ups That Last

by Ranjay Gulati and Alicia DeSantola

Why do so many promising start-ups go off the rails? Often they have trouble scaling. Founders may resist imposing discipline for fear of losing agility and control — but the price may be chaotic operations and unpredictable performance.

Drawing on extensive case studies and 75 years of research, the authors outline four activities that can help companies handle greater complexity as they seek new avenues for growth. Firms should:

  • Hire specialists in functions such as sales, HR, marketing, R&D, and manufacturing. This lets them tackle work more efficiently and catalyzes future growth by creating slack in the rest of the organization.
  • Add management structure. A few people at the top can’t effectively supervise everyone’s increasingly specialized daily work — and it’s hard for employees to stay focused and engaged without guidance and processes.
  • Establish a framework of plans and goals. Otherwise, improvisation may amount to aimless riffing.
  • Sustain the culture. Articulate the founding values in mission statements and job descriptions, and hire and reward for cultural fit.

Between the extremes of ad hoc and prescriptive organizing lies a useful middle ground — and leaders who can find it gain an important edge on their rivals. (Read the full article)

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