How Indian startups are building to last: Hay Group India

Abstract

Decoding the organizational practices in Indian startups is important for investors and entrepreneurs to run their own startups better. This study identifies and analyzes key organizational practices, anchored in the employee lifecycle. Understanding the employee value proposition of startups is the first step in knowing them, and the study revealed that interesting work and growth potential attracts talent to them. Analyzing the channels used to hire this talent underlined the importance of networking for startups. The recruiting process revealed that Indian startups continue to use interviews and reference checks to select the best candidates. Moreover, trends in learning and development were dominated by experiential learning. We also found the growth in a startup directly links to formal systems and processes to manage performance. Finally, deconstructing the compensation structure showed how startups incentivize their employees. Analyzing practices across the employee lifecycle, the key theme emerged – a startup’s size and stage of funding are the true determinants of its organizational practices and structure. With growth, comes formalization. As startups grow, they tend to develop more formal systems to streamline their processes. They display the need for specialized teams with dedicated responsibilities in order to build expertise. In addition, increased delegation of the top team’s operational activities is in evidence, as the leader focuses on steering the business towards further growth.