What are the differences leading a start-up vs an MNC?
Having started my career in an MNC and leaving it to start my own companies, I see two main differences between leading both: company focus and people management. At start-ups, experimenting with the business model is encouraged, risk-taking is promoted and failure is embraced as part of the learning process. At MNCs, the company has reached a stage of sustainable growth so leaders are often more focused on adhering to proven processes. Leading a start-up will require one to know how to empower a team that is cross-functional and often involved in multiple jobs, which can be confusing. In MNCs, roles commonly have clearly defined responsibilities so a leader there will have a more structured team.
CEO, Y3 Technologies
There fundamental differences between a start-up and an MNC that would necessitate a different leadership style/focus, and this would typically be in the areas of cash management, scale, and focus. For start-ups, there is an existential need to manage cash well, while scaling and building value/IP. Thus, the start-up leader would be juggling everything from revisiting business plans, fund raising, selling, project management and hiring. MNCs tend to be run based on managing shareholder forecast and earning expectations. The MNC leader, due to the scale of the organisation, would typically be running more from a quantitative and management perspective.
At start-ups, there is greater flexibility to create a unique culture, vision and strategy from the ground up, but constraints such as a lack of funding and resource shortage can create setbacks in the planned growth journey of the firm. Leaders in startups have to be adaptable and accept an open-ended approach towards challenges. On the other hand, leaders in MNCs can count on more stability and are entrusted with driving the company forward with the existing vision of the company in mind. As MNCs already have an established system in place, leaders in MNCs tend to play a small part in the wider ecosystem, where their decisions and actions have less of an impact on the company’s overall growth.
CEO & Founder, Glispa Global Group
Start-up leaders need to adapt rapidly by keeping a ear to the ground and relying on gut instincts to ensure they’re in the fast lane to market dominance. This involves making quick decisions involving multiple team members. In the beginning, all start-up decisions are about survival. This innovative, bootstrap mentality sticks around in successful teams as a part of the culture, which must be nurtured in selecting staff who are a good fit, to grow the company from a startup to a sustainable business. MNCs are often more complex in nature due to their size and their rigid hierarchies. Decisions take much longer to be made and this results in a culture that can be resistant to change.
Start-ups are very mission driven, and the leader has to continually demonstrate conviction and belief to the rest of his team, in order to bring out their collective strengths. Due to the very lean nature of start-ups, we need all hands on deck to work seamlessly together. However, in an MNC, there is more structure and resources, so you have different tools to incentivise your team, although one will also have to work within the culture that has already been set. Leaders of start-ups also typically play a variety of roles from marketing and operations, to even customer service and human resource whereas MNCs usually have the resources for specialist functions to be put in place.
Compiled by Rumi Hardasmalani (firstname.lastname@example.org)