4 Ways How Leaders Should Manage Major Changes In Their Startup


By Shrijay Seth

If the breed of pumped-up entrepreneurs feel that growth is the only constant, then they must also take into account how change is associated with growth.

Startups undergo a plethora of alterations before stabilizing. Sustaining a startup in a fast-paced environment means quickly adapting to changes without affecting the prevalent state of affairs.

As technology entrepreneurs lead the change, here are 3 major changes that a startup undergoes – Change in team, funding and business structure. Also, what is important here is how leaders communicate the change. 

1. Managing the Team

Changes in workforce may create people issues. Making people adapt to change becomes an emotional experience for everyone involved.

This is because of the role changes, alteration in responsibilities, inter-personal relationships and even the capacity to adapt new skills. Technical change is still manageable.

But if a startup is experiencing a leadership change then it must be dealt with cautiously.

Most of the leaders in a startup are associated with traits like integrity, dynamism, visionary, consistency, etc.

Any new leader who replaces or gets included in the hierarchy will need to demonstrate these traits to be accepted.

They need to walk the talk especially when it comes to espousing values and acting accordingly.

Regardless of which stage it is at, keeping the cultural integrity intact  while managing a new is of paramount importance. Founders need to ensure that the new team demonstrates the fairness and work culture that is imbibed in the organisation.

It is also crucial to how new leaders within the startup reflects this in their day-to-day business activities.

The key is to have employees valuing the team change and looking up to their leaders for guidance, understanding, direction and clarity.

How entrepreneurs deal with this change is also important. One way to do so is to have lateral assimilation without affecting the old staff.

This involves strategizing new hiring and lateral assimilation where new hires are valued by the current staff for the amount of experience and expertise they bring to the table.

2. Managing New Fund Inflow

Some of the startups are bootstrapped. This means founders, start their business with their savings and borrowed money.

It may start with the pre-seed where angel investors test waters. Here is when startups begin to expand and founders divert their attention to different things.

Managing new funds is easier said than done since all the investors would hope for some returns.

Founders then need to bring in more agility emphasising on ROI where the sustainability is shelved and profitability is the priority.

The inflow of funds requires the  structuring the business from top to bottom by redefining internal processes.

It is quite common for entrepreneurs to rope in the new team and bring in more experience – those who can scale the business.

With scalability as the topmost priority, businesses may change the way they function due to high expectations.

This change will require the standardization of the process and creating the accountability workflow in the business.

Founders must make tough calls here as to how s/he wants the processes to function and with a researched forecast on how it will create the desired impact.

3. Change in Business Structure

Startups often chose to go with Private Limited Company registration as it allows them to receive funding from various sources.

Few businesses initially start as an LLP and shift to a Company format later on. This is to avail the benefit of having a separate legal existence and offering ESOPs to employees.

Many startups opt to convert themselves to a Public Company to broaden their prospects of fundraising and achieve market penetration.

If stakeholders chose to make the company Public then necessary compliance must be followed to raise funds through public issues and even accept deposits.

Again, a change in the business structure like this will create brand awareness triggering the need to register trademark online as a measure for brand protection.

Staying aware of the business’ structural changes is the key to stay compliant and avoid accruing hefty penalties during the growth stage.

Also, this involves altering the company’s MoA and AoA. For such major shifts in the business structures, hiring business professional services is highly recommended.

 4. Communicate the Change

Entrepreneurs looking to build the buy-in and commitment should lead the change by communicating their vision precisely to the team.

They are the ones responsible to bring the vision to life. Any change in vision, mission and objective should be communicated to the team which motivates every individual throughout the organization and even to stakeholders and customers.

Communicating such vision change to stakeholders will involve defining the roadmap and laying down the strategy to execute the plans that turn that vision to reality.

One can associate a couple of leadership behavioural traits when it comes to communicating the message.

This involves the way how consistently the founders or leaders of a startup communicate and the level of instrumentality they adopt while communicating. Instrumentality involves the founders’ ability to structure, plan, take control of and implement the communicated change.

Aligning the organization will require all the members of an organization receiving consistent messages from their leader(s).

Any inconsistency between the action and the message will draw flak and cynicism from the stakeholders and employees alike. Communicating the larger strategic change will require the founder to engage substantial instrumental skills to ensure that the message is executed successfully.

This makes it crucial for founding leaders to choose the right means of communicating the message which should be well-bred, planned, purposeful and engaging.


Take note of these points if you are a founder and expecting some changes in the business. Already implemented changes in your business? Do share your experience on the transition journey in the comments section below or send feedback on email.

(Feedback: authored@startupanz.com)

About Author: 

Shrijay Seth is an entrepreneur with more than ten years of experience in working with hyper-growing digital commerce companies across the globe. Currently, he runs an eCommerce strategy and Analytics consulting company, along with a LegalTech venture in India called https://www.legalwiz.in/