The 5 key differences between corporate and start-up management

23 of March, 2021

As a budding manager you may be asking yourself what the key differences are between corporate and start-up management. As you may now the start-up culture in western societies is catching on fast, and has somewhat different short and long term goals to a large corporate group. This has a profound effect on the management culture. We attempt to find this out here.

By learning about the different management techniques needed for different types of companies, we can help you find the right tools to make managing these organisations effective.

Resources

The most obvious of key differences between corporate and start up management is resources. A start up by definition is a company at the start of its like cycle and, understandably, it doesn’t start out with a good thousand employees under its name. It also means as a manager you need to use both capital and labour in the most efficient way possible, and maintain a tight personal relationship between investors and employees.

With a corporate group, you have way more resources but the key remains productively using these resources.

Recruitment

When start-up managers are recruiting, the lack of HR resources and the lack of resources in general gives them a different challenge to the corporate group. Start-ups need to hire all rounders

Start-ups need to maximise their efficiency. They can do this via a competency matrix to make sure a handful of employees have several skills, whereas in corporate groups more specialisation is required.

Pace

The start-up culture gives much more focus to the speed of how a company should operate. Start ups have limited resources and their employees time is of primordial importance to the success of the company. Figuring out what business and management model you need for your start up is much more vital than in a corporate group with plenty of resources and capital to do projects.

Corporate groups have processes that take time to learn and operate. These are often related to the project management cycle. Although start ups should also have clear structure in their project management, often the fast paced nature of the tasks mean that planning needs to be efficient, not time consuming.

Hierarchy

Corporate culture often has extremely vertical hierarchy structures. Staff meetings for example will be structured according to certain norms and not an open space for discussion. Junior employees often don’t have much to say in the overall strategy of the company. Additionally, processes are much more rigid as a result and employees follow a manual.

Start ups by contrast have much more horizontal structures than corporate groups. As a manager you want to involve all the employees and their input and identify who can do it. Start ups may reward creativity in solutions too : you need to be more understand of errors as a start up manager, as fundamentally making errors is part of the development of your start up.

Corporate politics

Startups often only have one or two stakeholders or investors to please. This can make management much more straightforward. Often start up investors simply want to see the bottom line working in the right direction and have a more personal relationship with the higher management.

A corporate group will have a board representing shareholder interests, and will be more likely to have diverse characters wanting to pull management one way or the other. As a manager of a corporate group you have to thus negotiate the difficult corporate politics at boardroom level.