4 Ways to Efficiently Manage Employees in a Lean Startup


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4 Ways to Manage Employees

A lean startup is an approach marching towards constant progress with frequent trials and errors involved. The methodology in a lean startup has the entrepreneurs experimenting, investigating, iterating and testing their products and services as they gradually develop.

The idea of a lean startup contradicts that of the traditional startups in terms of approach. A normal business functions methodically – based on plans, strategy, and long-term vision. The traditional approach of regisetring a new business and developing multiyear business plans to raise money is now replaced. For example, a lean startup will move things faster and may just register a business online to shrink compliance troubles and have the entrepreneurs moving at a tangent from the traditional principles and developing a product in stealth mode. This keeps the information about the product and service ideas limited to in-house employees and investors.

Going lean means widening the opportunities for managers to discover organizational inefficiencies and in turn deliver value to customers.

Creating a strong bond with peers and A-Team

A lean startup leverages on Building an A-team that involves getting the right person at the right place. It is about the skills they possess and attitude towards your startup that is adaptable enough to fit in a lean startup. As your startup grows, you will want to retain a large part of your A-team to rely upon. For lean startups, their first batches of employees are brand marketers who would go on to speak about the business to others. This initiates a marketing chain reaction without any monetary investment that builds the confidence and revenue, gradually.

A fresh team in any lean startup succeeds only if there is a unified faith in the vision and goal of the entrepreneur leading it. And that is why picking the people for a startup gets tricky at times since they all should be working collectively towards a single goal.

One of the key elements in getting the A-team ready in a lean startup is hiring only for the positions required, keeping efficiency in mind. Another element lies in picking up the people who could be an ideal culture fit for a lean startup.

Offering ESOPs

Involving equity in a compensation package is not the ‘in thing’ amongst startups. That is why the decision of offering ESOP involves everyone having their fair share of contribution and not just co-founders. The same set of questions is asked to both the co-founders and new employees when assigning ESOPs. The key liesin how a new employee can bring in a distinctive value that is unique. Is equity the only mode of payment or does include a part of the salary as well?

Experienced employees are taking as big a risk as a Founder when it comes to joining astartup, leaving the comforts and security of a corporate job. Thus the onus is on you to let them feel that they too have something to gain. On the other hand, you would want to keep protecting the company and carry out business activities in a professional manner.

Offering equity to employees will require following a proven structure, thereby making way for a smooth process. BabakNivi suggests a ballpark level on rational equity levels that can be shared with the employees in a startup. It applies to each of the below-mentioned roles hired during a team development. There is a percentage of equity that is paid over and above a certain predecided salary. The higher the position, the higher will be the range of equity stake that goes in descending order:

CEO: 5-10%
COO: 2-5
V.P: 1-2%
Board Member (Independent): 1%
Lead (Engineer/product development): 0.5 – 1%
Director: 0.4 – 1.25%
Sr. Lead/Manager: 0.33 – 0.66%
Jr. Manager/Employee: 0.2 – 0.33%

The above bracketing is meant for employees while it also serves as recommended guidelines for the founders as well. It is best to review this and get a precise understanding of various types of equity compensation.

Offering Flexibility to employees

Chances are that two people might not be functioning optimally at the same time. This means that some might just wrap up a big task in the morning while some may just hit peak efficiency in the evening.

Of late, companies have started catching on to the fact that the 9-5 schedule is fast fading. Engaging top talent requires something more than just a financial offering and <a href="https://www.flexjobs.com/blog/post/survey-parents-rank-work-flexibility-ahead-salary/flexibility in work timings is seen as one of the biggest factors.

Not only is this important when it comes to hiring, but engaging and retaining top talent requires a certain amount of flexibility in terms of work hours and holidays. Kick this off by offering a flexibility week if not flexible hours. Maybe a lean startup can afford to have a team working in rotational mode or allow employees to come anytime convenient. Also, remote working can be experimented with and employee feedback taken experiment to check their happiness and productivity levels.

Lean Startup can implement the following to gauge productivity levels:

• Team members must have the option to choose from flexible working hours depending on whether they start early in the morning or stretch the day till late evening.

• Agile roles that can fit their schedules for example, new parents who opt to go for part-time for a few weeks, role-sharing based on dependency levels and also extending their workplace to homes.

• Lean startups can also adopt the self-management model like the one implemented at Buffer . It works with no set hours for team members. The working is based on the project and timeline set of the task wherein they have set hours to finish the job. This might sound like a little too extreme for the ones who would like to stay in charge. But then, this is what motivates employees and help them stay agile and focused on a lean startup.

Lean startup culture is one of continuous improvement

Things won’t work the right way if you are tactically stubborn. In fact, change is the lynchpin around which a lean startuppivots – just like Kaizen — constant, small improvements.

While implementing change, be it policies, methods, or strategies, being a lean startup entrepreneur, it is your duty to keep everyone informed – from the top down. The reason behind the change is that you plan to benefit not only the business but the employees too. This will have get you their active support in creating the change.

That’s the thing with implementing the lean methodology – moving inch by inch with the entire team and not alone. There is a shared purpose and it is fundamental to employee’s commitment that creates high levels of engagement to sustain a culture of improvement. Any change is hard and lean startups work in constant dynamism and agility that requires changes more often than not.


One of the core fundamentals of a lean startup lies in openness to evolving with time. Startup founders and employees need to be more dynamic and receptive to changes for the idea to grow. Globally lean startups around the globe scale up keeping efficienciencies in mind and hence it is likely that startups may take a practical, hard approach while growing. But that is not what lean startups do. They prosper taking along everyone who contributes to its success.

Shrijay Sheth
Shrijay Sheth is the co-founder at LegalWiz.in. Legalwiz provides legal consultancy and accounting services for Indian business entities; ranging from registering a business to bookkeeping. Shrijay is a seasoned entrepreneur and a serial Startup evangelist with interests in eCommerce, legal services, and business consultancy.


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