Learning to Manage: A Field Experiment in the Indian Startup Ecosystem

While management styles and practices have been found to be important determinants of firm performance, there is far less evidence on the extent to which management matters for entrepreneurial ventures and whether founders can learn to be more effective managers. Using a randomized field experiment with 100 high-growth technology firms, we show that founders who received advice from other founders with more “hands-on” management styles were more likely to reorient their own management activity, and subsequently experience lower employee attrition and higher rates of firm survival eight months after the intervention. For founders who already had a more hands-on management style themselves, these interactions also increased their rate of hiring. Our study demonstrates management skill can be learned by young firms via networks and subsequently influence performance.

Policy implications 
Peer learning might be fruitfully leveraged to increase employee growth, but not without a deeper understanding of selection processes. Ecosystems should make it easier to find and highlight managers with useful knowledge, one-to-one learning could be leveraged to disseminate knowledge more effectively.
Reference 
Koning, R., Hasan, S., Delecourt, S., Chatterji, A. (2017). 'Learning to Manage: A Field Experiment in the Indian Startup Ecosystem'. Harvard Business School Strategy Unit Working Paper.