Business and internal politics go together about as well as oil and water. Yet, grow your company to any size, and you’ll inevitably be dealing with this unsavory mixture.
Just this year, former head of Viacom Sumner Redstone cut out company CEO Philippe Dauman and another board member from the trust that dictates how Redstone’s shares are to be distributed after his passing. Now, Dauman is accusing Redstone’s daughter, Shari, of attempting to manipulate her aging father to gain control of the company. Whatever the case may be, tensions are visibly at an all-time high, and Viacom’s stock has plummeted as a result.
While startups rarely have their dirty laundry aired so publicly, they can still suffer from political infighting as much as the biggest corporations. And when founders disagree with their co-founders or investors, small problems are quickly magnified.
Luckily, the early stages of building a company are not only exciting, they’re also a golden opportunity to establish values and practices to prevent discord down the road. No matter what stage your startup is in, these five strategies will ensure you have a solid foundation upon which to make decisions for years to come:
1. Be brutally honest.
Early conversations about the company’s goals set the tone for everything else. The startup stage is the time to hash out exactly what the company's vision should be, especially as it relates to culture, values and management style.
For example, management style is typically an amalgamation of the founder's past experiences with managers, personalities, values, confidence and even upbringing. So, if as founder you’ve personally experienced success in a traditional environment, you probably prefer a hierarchical structure. But what if your co-founder is more attracted to free-flowing management?
Both styles have a litany of proven successes, so instead of squabbling about the details, have an honest discussion around what management style makes sense to the two of you based on your company’s goals and values.
That way, when disagreements inevitably arise, you can point to pre-established ground rules for how to deal with the situation. Whatever you do, don’t let fundamental disagreements fester. Employees do better when their leaders are transparent and in agreement.
2. Heighten your senses.
When deciding who should have which roles, be conscious of your own strengths and weaknesses. If you want to be CEO but tend to be introverted and hate sales, you might be better suited for something else. Reflect on your past experiences to determine how you can best help the company grow, and let your co-founder(s), investors and senior managers fill in the gaps.
Just as you need to be self-aware, you need to be acutely in tune with outsiders. You’ll likely establish early relationships with accountants, lawyers, marketers, developers, designers and other partners. If something seems off, or you feel that someone is trying to take advantage of you, trust your instincts, and see if the people you trust feel the same way.
3. Look for shared values.
All stakeholders must agree on some core principles early in the company’s life to ensure that decisions made later are based on the values of the company, not just the wishes of individuals.
For example, Kickstarter could have maximized its publicity and revenue early and allowed investors to cash out, but all involved parties agreed that becoming a public-benefit corporation was more important. The goal ultimately was met because the company's leaders and investors held similar values about serving the public and agreed on how those values should shape the company.
On the other hand, the music download service SpiralFrog squandered $45 million in funding because its founders and investors could not agree on the company’s direction.
The nature of the values involved is not as important as achieving widespread agreement on what people's roles should be; that's why it's important to find partners who share your style.
4. Align incentives properly.
Equity and compensation discussions are hard. No one wants to be the sucker who left millions on the table after the business took off. Leave the Hollywood drama out of the room, and just think about what sounds fair. Ideas aren’t worth much on their own compared to the ability to execute them, as well as build existing networks and your ability to make early sales. So, focus on aligning incentives with people's key capabilities.
Remember, you can iterate upon your compensation model as the company matures.
5. Don’t be afraid to leave if you have to.
Too many people ignore multiple warning signs before the first line of code is written, thinking they’re too far in to quit. Leading a startup is a huge commitment. If something doesn’t feel right and can’t be rectified, there’s no shame in leaving the company early if you can’t agree on values or strategy with other decision-makers.
No one likes to deal with politics, so set your company up from the beginning to defuse these sticky situations. Be honest and open, and communicate constantly with your fellow leaders to ensure your company continues to grow in the right direction for everyone.