HOW START-UPS are DIFFERENT FROM TRADITIONAL ORGANIZATIONS?

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According a 2014 NASSCOM report, India has become the third largest startup base in the world. Startups have been mushrooming in the country with so many people entering the market as entrepreneurs. But it is to be noted that there is a stark difference between how startups run and function as compared to the traditional organizations.

This is the set rulebook for every startup which entrepreneurs swear by stating that the initial phase demands a lot of attention, cautiousness and hard work. It is followed by the scaling up phase where the owners seek to add to the net worth of the enterprise. Poor execution of these two phases would lead to failure, which implies that presence of a strong CXO level in these startups is a mandatory factor for the success. The top level has to be such which can motivate the workforce, inspire them, lead from the front and show zeal about the innovative ideas that come across from anybody who is part of the organization. This is way different from how C Level or the executive level works in a traditional organization, where there is little room for being free in ideation and innovation.

If we peel off the upper lid to sneak into how different environment do startups share with their employees, the findings would suggest following things:-

Flexible Vs Rigid Framework

A traditional organization has a very robust yet rigid framework while a startup is flexible to accommodate changes. At an executive level as well, the growth somehow reaches a stagnant pause with no creative inputs being welcomed by the owners. On the other hand, a startup runs on the fuel of creativity and innovation. Every successful startup facilitates an environment to breed the ideas and innovations and passion while 100% involvement and vigor exhibited at every level in the organizational structure adds to the success mantra. Thus, startups are best to work with, in order to grow professionally and personally. As Bill Gross puts it, “I believe that startup organization is one of the greatest forms to make the world a better place. If you take a group for people with the right equity, incentives and organize them in a startup, you can unlock human potential in a way never before possible. You get them to achieve unbelievable things.”
After all, for any startup uniqueness of the idea matters the most, followed by its right execution by a strong senior executive level.

Horizontal Vs Vertical Hierarchy 

Startups run on a horizontal or flat hierarchy system as opposed to the vertical hierarchy system followed in a traditional organization. Both of these hierarchy systems have evolved out of the respective frameworks and requirements that these separate forms of organizations have. A horizontal framework is instrumental in making all levels of an organizations more accessible to each other, thus helping in better sharing of resources and ideas. A flat structure relaxes the hierarchical constraints thus bringing all the layers of a startup (which is in its nascent stage) closer to each other. On the other hand, a traditional organization (already reached a maturity phase) has many layers and many departments within and vertical hierarchy is the preferred system of administration and functioning for it. However this approach also tends to stifle the budding ideas and innovations (which breed within multiple layers).

These two differences carve out different sets of roles for the CXO guys working in the respective organization. While the senior management in a startup has to be all the more active, miscible and involved with other layers by being accessible to them; the top level guys in a traditional organization are rather detached, running the company with a systematic hierarchical administration.
So, when a CXO guy makes a switch from a traditional organization to a startup or vice-versa, rulebook gets revised. In a startup, CEO is responsible for the success or failure of a company and on the top level lies the responsibilities of-

  • Taking care of the cash flow as the capital management is most important for a startups
  • To set the vision and direct your entire team in that direction by leading from front keeping them motivated and inspired
  • To take care of the team building and team performance
  • Managing the investors
  • Building and managing the brand which has just started to blossom
  • Continuously strive to position your company in the market and connecting with the key players
  • In a traditional organization, a CEO deals with an established setup and recognized brand name and there is little to worry about capital management and investors. Here, the task is to administrate and manage the existing position to scale it to further heights.

Nevertheless, both kind of organizational setup (Startup or Traditional) are good in their own way, mainly in terms of the approach they follow towards achieving overall growth & success of products, services, brand, its people, clients & suppliers. However, the NEW AGE Start-Ups surely seem to be changing the way corporate world works in terms of modern mindset, freedom, creativity, innovation and people orientation.

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