Leadership in Startups and VUCA Time

In September 2011, Ambareesh Murty was on a flight to Goa drafting an email which he intended to send to his wife. It was an email explaining to her that Pepperfry, the furniture e-tailing venture he had co-founded six months ago was about to run out of money. "In fact, we were down to our last Rs 10 lakh. Ashish (Pepperfry co-founder) and I had dug into our personal savings, our mutual funds and it had all burned through pretty quickly," says Murty, who had quit his job as Country Manager of eBay India to found Pepperfry.

Ashish Shah, too, had quit his job as head of eBay Motors India. "We had commitments, in terms of investment term sheets from investors, but actual investments were yet to come," says Murty. The six month old startup was also facing a crucial HR conundrum: most parts of its operations were working in silos. For example, the folks who crafted furniture were based in Jodhpur and had little idea about how the internet worked. The employees in the Delhi office who understood retailing did not understand the nuts and bolts of the furniture business. The company's HQ in Mumbai had ecommerce experts who knew little about retailing or the furniture business. As result, communication was down. And money was running out. "Ashish and I had a chat and decided that if this wasn't going to work, let's at least fail spectacularly," recalls Murty. "So we decided to spend most of our last Rs 10 lakh on an offsite in Goa." In the end, it was money well spent. "People got to know each other and understand how other parts of the business worked. Almost overnight, communication improved," says Murty, who sees that offsite — which 150 people, including suppliers, attended — as a turning point in the company's fortunes. In the end, he did not send that email and Pepperfry is eyeing revenues of Rs 400 crore by the end of 2014.

Image: pixabay

This is the story of Ambareesh Murty CEO & Co-founder, Pepperfry, a furniture e-tailer. This shows how much complex for a leader to handle the situation in this VUCA time. India is booming with the startups. As per NASSCOM estimation, there are 3100+ startups in India. The work culture of these startups is altogether different from the typical matured organizations where organizational processes and HR functions are typically defined.

VUCA definition can be highly related in the context of the startups.

V – Volatility: Startups are so volatile that the leaders generally are unable to judge the dynamics of the change

U – Uncertainty: In the startup, you never know what is going to happen on tomorrow. Issues like whether investor will agree to pour his money in your venture or not are the daily stuff for the startup leaders.

C – Complexity: Complexity of issues due to lack of mature processes always be there for startup leaders

A – Ambiguity: Since the startup leaders are not used to work independently, they will find ambiguity in the decision that they take on a day-to-day basis

Apart from the typical leadership models that we have in the organizational behavior study, we need something more for the leadership in this VUCA time. Being a startup leader one should know the functions of leader by being the member of the team, not being the boss of the team. In this case following types of leadership becomes very important for leader working in the startup.

1. Adaptive leadership

2. Transformational leadership

3. Inclusive leadership

Adaptive leadership and to do list for adaptive leaders:

Adaptive leadership can be defined as the ability of the leader to adapt the situation and find the solution according to it. Being in the team of few people it is very necessary for the leader to keep the team member motivated and feel them that they are also the part of the team. This is the most difficult task of the leader. Though there is horizontal organizational structure in the startups, there are the chances that people may fail to communicate properly due to lack of belongingness in the team. The key attractions of a start-up are all about 'small', 'agile', 'young'. Many leaders in the startups are high level executives at multinational organizations. They generally persists mentality of processes and criteria of success in typical organizational performance management models. This mentality won’t work while working in the startups as there may be the chances that startup may fail. Other quality that adaptive leader should posses is to keep an eye on his ego and control it. Being the small organization you can’t take pride on the short term success of the organization. As a leader once small success is achieved he should look forward for the other ways to sustain the organization. Learning is the key to success. Therefore being leader of the small organization, he should be able to learn each and every day from the mistakes as well as from the other leaders. As a leader you should be open to work with people apart from taking the strategic decisions. As a startup leader, you lead the people directly; therefore it is very crucial for the leader how you make your teammates think.

Transformational leadership and characteristics of transformational leaders:

Transformational leadership is centered towards the transformation of himself, others and his organization. As the size of the workforce of the startup increases, the leader should be able to transform the culture of the organization as well as the thought process of the human capital. Due to increase in the size of the organization, the leader should be able to recognize the dynamics of the change in the organizational behavior as well as should be able to transform the processes and develop holistic aspects to cater to the need of management of the human capital. Being the transformational leader, a person should posses following characteristics:

- Building shared values: Inspire others to build shared values and also motivate the employees to possess the same

- Vision setting: Transforming the startup into the medium sized company, the leader should be able to develop vision for the organization

- Enabling: Leader should train, educate and mentor the employees by engaging with them through various channels like seminars, brainstorming sessions to ensure the growth and effectiveness in the workplace

- Intuition: By using creative techniques leader should be able to recognize the need and change in the organization

Inclusive Leadership and characteristics of inclusive leaders:

Inclusive leadership can be defined as a leadership which uses balanced strategy of meeting employees’ needs for uniqueness and belongingness that can be more impactful in increasing employee innovation and engagement than a strategy focusing on only one or the other of these needs. Inclusive leadership involves the people from different background and help to build team citizenship which will lead to more innovation and productivity. It is found that team citizenship is the directly affecting the innovation process in the organization. Team citizenship can be defined as a belongingness of an employee in the team. While working as a startup leader this is the must requirement to be an inclusive leader. Leader should be able to understand the need for an inclusion and according to the need he should be facilitator to build and develop team citizenship amongst employees. The characteristics of the inclusive leaders are as follows:

- Inclusive leadership positively impacts everyone – no matter whether you are a man or a woman, old or young, or of a particular race, color, or nationality. Anyone can be an inclusive leader, and everyone benefi¬ts from inclusion

- Inclusive leaders value the diverse talents and experiences of people they influence or who are their teams. Being the leader of the startup, he should value the diverse talents and must respect the point of views of the experienced person.

- Inclusive leaders do not stereotype or alienate people they influence or who are on their teams, or make them feel reluctant to share ideas that set them apart, which can lead to groupthink.

- Inclusive leaders are aware of their own biases and assumptions, take action, and execute the EACH method: Empower your direct reports and team members, hold them Accountable, be Courageous, and show Humility as a leader.

This article has been authored by Pratik Dilipbhai Ghetia from International Management Institute – New Delhi


1. The Economic Times, Bennett, Coleman & Co. Ltd. (2015) Five valuable leadership lessons from startup founders. [Online] Available from: http://articles.economictimes.indiatimes.com/2014-12-12/news/56990046_1_chumbak-pepperfry-shubhra-chadda

2. Catalyst Inc. (2015) Inclusive Leadership. [Online] Available from: http://www.catalyst.org/events/inclusive-leadership-training-becoming-successful-leader

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