Decrypting how startups manage things

If you work in a startup you’ll probably agree with me that there are few processes and procedures in place, that communication and customer relations are rather informal. In other words startups have a more flexible structure that allow them to do things differently –and sometimes more efficiently- than big companies.

Entrepreneurship research has long identified those flexible processes. Yet I was lacking a clear definition of the mechanisms used in startups to achieve that flexibility. It is René Maurer, Université of Aachen, who proposed an interesting set of definitions.

Different ways to manage uncertainty

The flexibility above is required to manage the uncertainty. Uncertainty is at the heart of the definition of the entrepreneurial act; overcoming the uncertainty is indeed a required step to start a venture.

Three mechanisms co-exist to manage uncertainty. For those interested in put between brackets the scientific reference pertaining to each concept :

• Improvisation (Brinckmann et al. 2012)
• Bricolage (Baker and Nelson, 2005)
• Effectuation (Sarasvathy 2008)

We already talked about the effectuation process. Let’s now have a look at the other two concepts.

Effectuation, Bricolage and Improvisation

Effectuation is used to manage the lack of goal. It is the opposite of the causation process where you define the path in function of the goal you want to achieve.

Bricolage is used to answer a lack of resources. A piece of the puzzle is missing; you’ve to quickly manufacture it to complete the picture.

Improvisation results from a lack of time. The result promised to your customer can’t be finished on time; you have to deviate from the standard ways of doing to reach the goal.

Conclusion

Chances are high that you will recognize yourself in at least one of the processes above. The beauty of startups lies in their capacity to innovate and to find news ways of doing things. Sometimes they are forced to do it and engage in mechanisms that can lead to worthwhile discoveries.

By Pierre-Nicolas Schwab Dr. Pierre-Nicolas Schwab is the founder of IntoTheMinds. He specializes in e-commerce, retail and logistics. He is also a research fellow in the marketing department of the Free University of Brussels and acts as a coach for several startups and public organizations. He holds a PhD in Marketing, a MBA in Finance, and a MSc in Chemistry. He can be contacted by email, Linkedin or by phone (+32 486 42 79 42)