Start-ups that last / Ranjay Gulati, Alicia Desantola

Start-ups these days grow so rapidly that it's difficult for them to correct course once they recognize missteps. They can improve their prospects by understanding the mechanics of effective scaling before they reach that moment of truth. Venture capitalist Ben Horowitz compares scaling to a "black art." He and others have proposed useful ideas for demystifying it, but start-ups still lack a cogent framework for transitioning to mature firms. That's what this article provides. Firms must hire functional experts to take the enterprise to the next level, add management structures to accommodate increased head count while maintaining informal ties across the organization, build planning and forecasting capabilities, and spell out and reinforce the cultural values that will sustain the business. Culture is typically a big part of what draws people to join start-ups -- and what keeps them going. It helps the organization keep its values alive by hiring for cultural fit and rewarding desired behaviors through recognition and compensation.

Business