Why Start-Up's Fail: Solving the People Puzzle
As the CEO of TheFractionalCHRO.ca and a former Chief People Officer, I've seen firsthand the common pitfalls that lead startups down the path of failure. While factors like funding, market fit, and product development often take center stage, one critical aspect is frequently overlooked: people decisions.
According to CB Insights, 23% of startups fail because they don't have the right team. This underscores the importance of proper HR guidance from the outset. David Niu, CEO of TINYpulse, aptly puts it, "Your team is the foundation of your startup. Without the right people strategy in place, you're building on shaky ground."
Key Solutions
1. Work with a Proven CHRO or HR Executive: Engage an experienced CHRO or HR executive who can provide strategic HR guidance and implement effective people strategies from the get-go and then build your team slowly as you grow. What does that mean? They will help you think about what you need, challenge you to slow down and be deliberate, and create a strategy that will flex with your growth cycle. They will also help you figure out when something is not working and help you make faster decisions.
2. Create a Culture of Purposeful Work: Before you do anything, make sure you understand the role, and hold yourself accountable to demonstrating a role actually needs to be in existence. Foster an environment where employees see the impact of their contributions with updates. Regularly communicate how their work aligns with the company’s mission and goals. Make sure you understand the role, and hold yourself accountable to demonstrating a role actually needs to be in existance.
3. Prioritize Employee Well-Being: You are going to ask a lot of people when you are in growth mode, so offer flexible working hours, remote options, and wellness programs. A healthy work-life environment is crucial for sustaining productivity and reducing burnout.
4. Continuous Learning: Invest in your team's growth through workshops, online courses, and coaching programs. This keeps them engaged and loyal. Do not forget your future leaders- ensure they know how to lead your people in the way you want.
5. Transparent Communication: Maintain open communication channels. Regular check-ins and town hall meetings build trust and ensure employees feel valued and heard. But more importantly, at the start-up stage its critical for you to be engaged 1:1 - be accountable to the culture.
6. Recognize and Reward: Acknowledge hard work and achievements through formal recognition programs, bonuses, or simple thank-yous. Recognition boosts morale and loyalty. Remember, not everyone wants public displays of acknowledgement customize to suite your teams preference. And the most powerful - promote from within- with the right career path structure.
Don’t let poor people decisions be the downfall of your startup. Let’s work together to lay the groundwork for success and ensure you’re ready to conquer seed rounds and beyond. Reach out to TheFractionalCHRO.ca today and take the first step towards a brighter future for your startup.
