How To Lead A Startup: Fake It ‘Til You Make It

Guest author Carol Broadbent is the cofounder and principal of Crowded Ocean, a Silicon Valley marketing agency. She wrote this post with cofounder Tom Hogan.

There is no single reason why employees join a specific startup. Motivations can range from the technology vision and track record of the founders to job titles and commute times. And the promise of an equity payday is always a factor. 

But regardless of the initial draw, the reason why these employees stay comes down to one thing: how well they understand, contribute to, and feel a part of advancing the vision/mission of the company. That adds up to some interesting initial challenges for startup CEOs.

Be The Decider 

There is no single style of leadership that translates into success for CEOs of early-stage companies. Founders can range from transparent to ultrasecretive in personality. Some create perk-rich environments while some go with spartan surroundings. Managementwise, they can be consensus-driven or top-down.

But one of the major predictors of long-term success is how decisions are made and communicated to the company. Not only are these initial decisions critical from a business and technology perspective, they establish a cultural tone at the same time.

Ask any startup employee and he or she will say that they not only want to be involved in these early decisions. More than that, due to their investments in the company—time, reduced salary, quality of life—they feel they deserve to be involved in these decisions.

That poses a conundrum for startup CEOs: Some of the people most valuable to a company in its earliest stages are also the last people you want helping you make business-critical decisions.

Don’t Hate, Participate … If You Can Afford To

Simply put, decisionmaking isn’t for everyone on the startup team. There are a number of factors that a CEO has to be mindful of before he or she makes that critical first major decision.

  • Early employees are often narrowly brilliant in their particular technical domain but are extremely limited in business acumen.
  • Many startups today have gone virtual, with key employees allowed to work remotely as a recruiting incentive. But even when a startup is mindful of this distance and tries to bring these employees in through videoconferencing (and this is a distinct minority of startups we advise), these remote employees are rarely as involved or as knowledgeable as their on-site compatriots. 
  • Startups are always on, always moving. It’s a pace and environment not given to deliberation or self-analysis. Making decisions is like changing a tire on a moving car—maybe it would be better to pull off the road and do it right, but who has the time?

Aim For Inclusion, But Keep Control

Given the above considerations, how does a CEO fulfill her obligations to shareholders while establishing a decisionmaking process that creates a sense of involvement and ownership within the employee base? 

 This is where things get a little cynical, where we advise our CEOs on how to open the decision process to the entire company while still maintaining ultimate control in the hands of the management team. 

 Here’s our four-step formula to participative decisionmaking:

  1.  Get as much diverse input as possible. It’s been proven that the more diverse your group—in background, ethnicity, and gender—the better the output. If you’re smart, you’ve already got a diverse team; now is the time to reap the benefits.
  2. Instill ownership across the entire team to motivate employee engagement. Ownership is a trait that startup leaders need to foster and reward, but only if it’s genuine. Even if a CEO is seriously top-down in her decision-making, we encourage her to find areas of genuine ownership, however narrow, for each employee.
  3. Make critical decisions with a small group of business veterans who’ve been around the block.
  4. Summarize for the entire team what you’ve learned in open forums with all employees. Be sure to communicate back to the company in another open forum—creating the sense that employees been active participants in the process all along. In other words, fake it ’til you make it.  

Ultimately, if employees feel like their ideas are solicited and considered, and if decisions and their results are announced on a regular basis, employees will feel engaged in their startup rather than excluded from the decision process. 

And once they get past the fake-it phase, we encourage our CEOs to hire professional managers who can build strong teams and move participatory decisionmaking from altruistic goal to active reality.  

Photo courtesy of Zendesk

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