“Your business can’t grow, it lacks “Systems and Structures”
Building a business is like establishing an institution, a combination of complex systems and structures that ensure the feasibility, viability, and sustainability of a product or service you want to offer. Mostly these complex systems related to having the ability to managing people, building great products and having sound processes. For first time entrepreneurs, it is not something easy to figure out. It requires a series of mistakes and some lucky before you figure it out.
Listening to an interview of an old friend, one of the smartest guys I have ever worked with I learned from day one why you need systems and structures for growth. Startups without systems and structures are designed to fail from day one. Without systems and structures; you can’t raise fund, you can’t make sound decisions, you can’t attract talent, simply you can’t do anything.
Most businesses think having systems and structures is encouraging red tapes and limiting innovation. While this might be true, one thing for sure, you can’t grow without them. No matter how good your idea, team or product is no investor will want to put money in a company without proper financial and administrative systems. No one will want to work with a startup that doesn’t keep records, not clear who owns the assets, no legal existence, no clear team roles etc. This is the fine line between businesses with average products that raise funds and businesses with great products that don’t raise funds.
Without systems and structures, you will make a lot of “strategic mistakes”. Mistakes you can’t recover from. It’s okay to make “operation mistakes” since they are easy to fix but one “strategic mistake” can kill your startup or left it heavily wounded. It’s okay to forget asking for a review from a client. Signing an exclusivity deal with your potential competitor without informing your management that is a “fatal mistake”. Startups without systems and structures in place make these mistakes every day. It’s enough for one mistake of this nature to kill your startup what if you make three of them.
Systems and structures are also designed to protect you as a founder from making emotional decisions based on your personal interests and relationships. I always tell people this is not for me to decide. I will present it to management. They have the last say. It’s not easy and sometimes can even jeopardize the relationship you have with your peers, family, and friends. One thing for sure, they will always respect the decision of “The Management”. The management is not you is a group of people a system that is designed to keep you in check and protect you from making the wrong decisions. Always make your peers understand your institution is not you. That will save you from yourself.
The only difference between a four years old company and ten years one is the systems they have developed over the years. If a four years company put some extra work to get everything that a ten years company has, then they can compete equally. All you need is to innovate as fast as possible, recover quickly from mistakes, recruit talents and use technology to your advantage.
Elephants (big businesses) can’t shake, you can.
PS | You can listen to my podcast on Startup Geeks Swahili about “Systems and Structures”