Five organisational mistakes that start-up founders should avoid

By Olivia Hart

Five organisational mistakes can weaken a start-up even when recruitment succeeds, according to Ayobami Esther Akinnagbe. Her list addresses the stage when founders move beyond an idea, clients and a customer base to bringing people aboard with clear responsibilities, reporting lines and shared objectives.

Akinnagbe says the employer process extends beyond hiring: onboarding, defined roles, HR policies, performance management and standard operating procedures determine whether people can work effectively. “Recruitment is not all a business needs,” she writes. Early professional services can help founders prevent avoidable challenges and build a reliable base for growth.

What happened when reporting lines remained on paper?

Her experience involved a business establishment reopening after restructuring. She hired a manager before filling the remaining vacancies. The manager would oversee daily operations, implement company policies and periodically train employees for their roles.

During recruitment, Akinnagbe communicated each new employee’s responsibilities and reporting manager, then repeated those details in offer letters. Yet an accountant personally known to both co-founders had previously led the existing workforce. The founders wanted a new operating arrangement and included it in the recruitment brief.

New employees understood that they should report to the new manager, but existing employees retained their loyalty to the accountant. The founders had not properly implemented the new structure, leaving the manager without enough authority and cooperation.

That mismatch produced recurring friction and required Akinnagbe to mediate disputes even though she had been engaged only to handle recruitment. She explained: “communicating reporting lines and responsibilities during recruitment was only one part of the process.” The organisation also needed to implement the structure, clarify authority and secure understanding and respect for the changes.

The founders believed they could resolve matters themselves. Akinnagbe eventually distanced herself from the continuing back-and-forth, and the episode became the basis for her five-part warning.

What does recruitment alone not solve?

Founders often seek to contain costs while establishing a business, but savings achieved by skipping essential processes can become more expensive later. Akinnagbe says a functioning employer process also requires:

• Proper onboarding
• Clearly defined roles and responsibilities
• HR policies
• Performance management systems
• Standard operating procedures, or SOPs

The right professional services from the outset can prevent avoidable problems and give the organisation a more reliable base for growth.

How do personal relationships distort appointments?

Founders can employ relatives, friends and other people they know personally; the relationship itself creates no automatic problem. Trouble begins when personal loyalty overrides professional responsibilities, qualifications, reporting lines and accountability.

For example, a founder may appoint a relative to oversee a department without defining the role properly. If that appointee exercises authority beyond the designation, or staff must report to a position the founder never communicated, tension follows.

The result can be weaker management authority, harder accountability and employees who do not know where to report. Every worker should understand the role, operate within the established structure and meet the same professional standards, regardless of personal ties.

When does an organisational chart fail?

An organisational chart, job descriptions and reporting lines in offer letters establish intended arrangements, but paper cannot implement them. Founders must communicate changes across the organisation, delegate the necessary authority and ensure employees understand and respect the new structure.

Each operating arrangement should answer five questions:

• Who makes decisions?
• Who supervises each department?
• Who approves expenses?
• Who handles employee grievances?
• Who ensures company policies remain implemented?

Without those answers, managers struggle to exercise authority, employees remain confused and founders repeatedly resolve operational disputes. Restructuring therefore requires more than recruiting replacements or assigning duties; leadership must put the structure into practice.

Can the founder step away for two weeks?\n

A founder who approves every request, resolves every disagreement and oversees every small detail may have built a company that cannot operate without their presence. The practical test is simple: can the founder leave for two full weeks, or 14 days, without constant concern that everything will fall apart?\n If not, the founder should reconsider the business structure. Delegation means more than distributing tasks: leaders need clear processes, authority and resources to perform their responsibilities. With those systems operating, the founder can devote more time to business development, strategic partnerships, expansion and other strategic decisions.

What should employee development include?\n

Experienced employees still need training because each organisation has its own processes, expectations and standards. New hires and established staff need periodic instruction to understand those requirements and perform their roles effectively.

A performance management system should provide regular feedback, explain performance expectations and identify improvement needs. Practical mechanisms include:

• Quarterly appraisals, providing four formal review cycles a year
• One-on-one check-ins
• Skills-gap assessments
• Learning and development programmes

Treating development as continuous can improve productivity, support retention of good employees and build internal capability. Hiring does not remove the need to train employees or manage their performance.

Taken together, the five mistakes form a readiness test for any growing start-up: authority must work beyond offer letters, accountability must survive personal relationships, and development must continue after recruitment. The forward-looking measure is whether the founder can take two full weeks away while managers, policies and performance processes keep the organisation operating.