Running A Company Why Communication Determines Startup Success Posted on April 14, 2020 Written by Droplr Communication is a key factor in determining startup success. Investing in your startup, and not necessarily financially, should be your focus when building out your company. Let’s set the scene. 2016 is coming to an end. Mark Zuckerberg and Sheryl Sandberg, Facebook’s CEO and COO, are sitting on a sofa, summing up the year. They’re having their bi-weekly one-on-one. The meetings are the product of advice Sheryl received from her late husband when she took on the post. The advice was not to worry too much about the business model and frameworks, but rather to make sure that she and Mark would start and finish every week together. This conversation that I watched got me thinking about the importance and the power of communication in startup success. If being on the same page right off the bat was secondary to being able to talk things through, companies should not denigrate the idea of having proper communication procedures and tactics in place. As Mark Zuckerberg points out, it’s a crucial element in helping his company move forward. I work for a startup, so naturally, my focus has shifted towards communication in startups. My intuition tells me, however, that the issue of communication is even more pertinent for small and fast-growing companies with fewer people responsible for more things than for large enterprises – they usually have tried-and-tested methods and a financial cushion to help absorb the blow of potential flops resulting from miscommunication. The business is taking off. This shouldn’t be a problem As a startup, you’re initially operating out of the mythical garage. Most likely there’s only you and the co-founder on board. You’re not two random people. Chances are you know each other fairly well and enjoy mutual trust. It takes trust to kick off a business venture. Hopefully, you differ in terms of personality and the skills you bring to the table. What you do share is a goal and a commitment to making it happen. That’s the right stuff to make a foundation for your business. You start up. At first, the venture is a hassle for both of you. You’re not always equally available. This creates tension at times, but your determination lets you jump over this minor hurdle. You take off. Product development, sales, and marketing, handling customers’ questions and looking for investors quickly become too much for just the two of you. Sooner or later you’re going to take on more hands to help out. First hiring is critical hiring Matt Jonns, the founder and CEO of ucreate.it, a fantastic startup studio that helps non-tech startup founders validate their business ideas, states: “As there’s a small number of people in the business, each hire has a dramatic impact on the culture and growth. As a founder, it’s your job to ensure that every new person who joins your team not only has the required skill set but also fits the company’s culture. Hiring both quickly and correctly will amplify your chances of success.” This is, of course, easier said than done. Your first employees should be the core of your company. So you need to strike a balance between hiring quickly and taking the time to find people who have the brains you need and are the right fit for the company. They will make a rich soil to cultivate your company culture in. Related: 6 Communication Best Practices for Startups What Makes a Good First Hire On top of a track record, these people should have drive – not necessarily to climb the career ladder, but to learn, to act, and most of all to be part of a team working towards a common goal. You’re looking for people who can do more than build and sell a product: they need to build a company, a community of people working together. You’re looking for team players. When you’re trying to get the ball rolling, the last distraction you need is dealing with conflicts within teams or tensions caused by big egos. This is why people joining Droplr hear right from the start that we like to keep our egos in check. Selecting the right people for the job is one thing. Onboarding them is a different story. Lack of proper communication hinders the onboarding process and leads to unnecessary confusion which can hinder startup success. The onboarding stage and communication culture of a successful startup Megan Cunningham is the founder and CEO of Magnet Media, a company that does a terrific job helping the creative community (their impressive list of clients includes Airbnb, TED, Puma, Sundance Film Festival, and National Geographic) to tell their story through video content. Talking to Droplr, Cunningham admits: “The biggest challenge we had while building the company was during an especially fast-growth period. In this short window, we were building our brand new facilities to hire new team members while we were also hiring a large number of new people (during an already very busy time), and we had no standardized ‘onboarding’ process for the new hires in place. That meant that new staff members, which took time and energy to recruit and hire, were finally there to assist; but they had a lack of knowledge about the company. They had varying levels of understanding about our larger business, how their role contributed to the firm’s mission, how to talk about different services we offered, how to operate between departments or get done what they needed to get done. It was very challenging because there was a false sense of relief when new staff members started… but a whole set of other problems ensued due to the lack of formal onboarding.” What Megan & Magnet Media Did to Improve This lead to a series of “miscommunications, confusion, and resentments that built up temporarily shortly after the new employees started, due to their lack of orientation” which the company managed to solve by setting up a strong onboarding process. “Our process includes a review of the basics: social meet-and-greet, review of the org chart, company mission, history, executive background, etc.,” explains Megan. “But we also pay special attention to the specifics of that staff member’s role: what are the 30-60-90 day expectations, how is your management leading you through the process of being oriented as a new team member, who do you go to if you have questions, etc. Setting this process up in a ‘checklist’ fashion and then making sure that every manager sees it through is critical.” It may sound overly procedural for a startup. In a fledgling company, people tend to have varying responsibilities. You need a basic structure, though, so as to avoid resentment coming from uncommunicated expectations or confusion over the roles in the company. Communication not aligned with your organizational structure If your goals are to operate around startup success, communicate your organizational culture clearly. Decide to what extent your organizational structure is hierarchical. Make it clear who reports what tasks to whom. Have you gone for a flat organizational structure? Be consistent and make sure everybody buys into and respects that. A flat structure entails being accountable for your tasks to the whole team, having more say over how tasks are done, and discussing jobs democratically as a group. Communicating the effects of your work should be aligned with the company culture. As a leader, you want to make sure everybody is on board with the flat structure communication style. How can you teach your staff to think as a group and speak in a group? On top of daily meetings where people bring one another up to speed on their workflow, make sure some jobs are done through teamwork. By doing the actual work as a team – making decisions together in meetings or during problem-solving brainstorms – your staff members will learn to communicate. You don’t want to overdo it with meetings, and when organizing them you follow Steve Jobs’ rule of allowing only people who actually bring something to the table to take part in them. Nonetheless, meetings and group work are necessary if you want to build a team that communicates clearly and has a strong sense of belonging. Such gatherings will also give your staff a greater understanding of what stage the company is at. Additionally, they add transparency to the way your business is managed. This will go a long way in creating a startup success. Lack of transparency threatens startup success As Matt Jonns from ucreate.it points out: “As you grow, the pool of communication widens increasing the chances of information slipping through the cracks. I make sure we have a transparent setup and a strong core vision that is over-communicated to all staff. Effective communication enhances creativity, spreads responsibility and increases workplace morale.” It stands to reason that insufficient communication affects your staff’s motivation and may lead to conflicts in the team. Robin Reshwan, the founder of CS Advising, a consulting and a staffing firm, sees eye to eye with Jonns on that as she indicates the link between the company’s take on transparency and its success: “It became very important to keep employees aligned with bigger picture growth. People are looking for meaning in their work and in their company. Taking the time to ‘rope in’ everyone to my goals and mission can help achieve greater results.” Steven Benson, a Stanford graduate and the founder of Badger Maps, the provider of software that finds optimal routes for sales reps, agrees: “The key to great internal communication is to be clear and transparent. When the founder and CEO don’t communicate well, employees sometimes assume the worst. It’s easy for rumors and suspicions to develop around the water-cooler. The management team can quickly lose trust by either poor or a lack of communication so you need to make sure you put the right communication tools and processes in place early on.” What this Means for Founders By the lack of transparency, I don’t necessarily mean not disclosing certain things about the business. Being in charge, you have every right to keep some of your strategic moves to yourself. It’s the ability to decide what to disclose to your staff and, most importantly, when to do it that makes you a good leader. Insufficient transparency is also the lack of feedback. As Benson notices, your employees will assume the worst. Communicating negative feedback is very often difficult for young leaders. Remember, however, that people sense when things go wrong, your silence will provoke concern and tension. The subject is so vast that, to ease your reading, I’ve decided to split this post on startup success into two parts. I’ve just tried to convince you how important strategizing your communication is and pointed at the critical moments you should pay extra attention to. The next part will present strategies you can put in place to create a thriving working culture. Stay tuned!