Management in Startups
Sternberg feels that management styles at startups are very diverse. There are many management techniques that various stakeholders in the company can employ. These techniques can be used by the investors (such as venture capital firms) who decide how to allocate the necessary financial resources, how to build the company infrastructure and management style, how to structure it, and at what locations.
Raphael Avraham Sternberg discusses the management techniques employed at companies that any startup could easily use. They include the following ten techniques :
MBO (Management by Objective)
A style of management where executives make decisions based on the goals they seek to achieve. In an MBO, the customer is vital in making all initial decisions, especially planning and budgeting for growth. One unique aspect of this approach is that it is very unstructured.
Corporate Kinship Style
Corporate Kinship Style is where the company culture is very similar across all locations. According to Sternberg, “one of the least understood aspects of managing a business is how you manage the people who work there.”
Entrepreneurial Management Style
Entrepreneurial Management Style refers to the management style often associated with startups. This style focuses on the investment in human capital and developing an effective business plan.
Market Management Style
A market management style is one where the product is king. This approach allows the company to focus on meeting its customer’s needs, developing a product that meets those needs, and driving revenues from that product. This style also allows for market-based decision-making and less emphasizes a long-term vision.
Operation Management Style
Operational management is used when a company tries to become much more significant. What will make this work best is if the company starts with a well-defined and sustainable business model? This will allow for growth to occur in a sustainable manner that helps ensure future success for the company.
Vertical Management Style
A vertical management style places executives along a particular business function. For example, this could include a strategy group used to drive the company’s overall growth. Then there would also be functional groups called upon to help when needed for other functions in delivering successful products and services to customers.
Horizontal Management Style
A Horizontal Management Style focuses on the same strategy being used at all the different company locations. This can allow a company to have a particular culture and values spread out and remain consistent.
Networked Management Style
Networked management focuses on creating a network of alliances across many different organizations in an industry. Sternberg adds, “alliances are a compelling way to drive growth in various businesses.”
Relational Management Style
A relational style is where the company focuses on maintaining a good relationship with its customers and partners. This can allow a company to have an open line of communication with its customers, learn from them and counter feedback effectively.
Raphael Avraham Sternberg believes that any startup can use the management styles presented above. They can be used to help define and structure the company in a way that enables it to grow, last, and ultimately succeed.