How Leadership Must Change as The Company Scales
I don’t think that there’s an excitement that beats the rush of starting your own company. Entrepreneurs will agree that the adrenalin rush to get an idea off the ground and to reality is quite unlike any other experience.
Most management writings are dedicated to the early days of an entrepreneurial journey…how must you innovate, how to go-to-market…the list is quite exhaustive. And then your startup starts to grow up. While this is a very exciting time for startup leadership, this journey also presents some interesting lessons on how the leadership has to scale in pace with the company growth. Because unless you do so, this growth cannot be sustained.
So how must leadership evolve once their startup grows up?
The move from generalists to specialist
In the initial days of the startup, everyone is part of one team. It is like one small happy family. Almost all hires at this point work as generalists – handling a little bit of everything. Your engineers not only develop code but also test and deploy it. Marketers manage every marketing channel, PR, and social media included. The CEO is the jack of all trades – product owner, delivery head, sales head, administrator, facilities manager…the list is long.
As the startup grows, however, you need to move from a generalist mode to the specialist mode. So now you have to demarcate your teams, build solid job descriptions, and assign KRAs and KPI’s. You have to organize the company efficiently by balancing the resources at hand and then hiring the right set of resources.
The leadership, the CXO’s, then have to shift their focus on working ‘on’ the company rather than just working ‘in’ the company. Their key activities have to be on strategic initiatives that will help the company move forward.
Focus on building organizational culture and market identity
Until now, you had been focused on getting your product off the ground. You’d been busy making financial plans and forecasts, building a customer base or looking for funding. Now that your company has crossed that barrier, how will you establish yourself in the market?
Leadership in a scaling company has to make deliberate and focused efforts to build real market identity. A real market identity is not just about having a mission, vision or value statement. It is about identifying what your ‘purpose’ as a company is. Why are you making what you are producing? What makes you different? What is your inherent positive valance? What would be the factors that would attract your customers to you? How can you build your market personality?
Organizations that have a deep-rooted culture are built on a foundation of values. These values are deliberately linked to the mission of the company. And all these things have to tie in seamlessly to build your company culture and will define who you are as a company. This helps in establishing a real identity – both with your external and internal customers.
Adopt a ‘strategy -first’ approach
Clearly, as leadership, you have to focus on gaining a clear understanding of competitive positioning, conduct threat analysis, identify new opportunities, and assess how you can utilize your company’s unique capabilities to leverage them.
What worked so far in a small organization might not work in the scaled-up version of your company. In most cases, the ‘rinse and repeat’ model does not work as the company scales. Now, you might have a product or a service that has its own nice market and thus, success might come riding the early tailwinds. However, your long-term growth strategy can’t be riding this wave alone, can it?
So, while you bask in the glory of the initial success, you have to take focused steps on how to manage growth. How will you respond to competitive threats? How will you expand your footprint?
Your move has to be towards developing a functional strategy that looks beyond the current moment and focuses on initiatives that will help the company achieve long term success.
The transition from ‘presence’ to ‘process’
When you have a small company, managing everything, and being completely ‘hands-on’ is a given. But as the company grows, keeping the same approach will limit the growth.
In the initial days of the company, you can interact with the workforce on a daily basis. You are more available and definitely more visible. But what happens when the company grows, and you are no longer in a position to afford the daily fist bumps with your employees?
Transitioning from presenceto processtherefore become essential as leadership has to focus on initiatives that have an impact on the company’s long-term value. Standardized and repeatable processes and proper delegation of tasks have to be the replacement so that the workforce is not lost. The employees then get invested in the company and not with the leadership alone. And this flexibility fosters growth.
Design the organizational architecture
As a company grows, you have to define and design your organizational architecture – who form your core team, who your suppliers and third-party vendors are, who your business partners are.
Identify the right people, who your key players will be, companies who will foster your company’s growth, how will you ensure their success? Now get them in place. And then, you need to move out of their way as quickly as possible. Unless you do so, you’ll run aground.
Build a leadership pipeline
So, by now, you have your departments, divisions, teams and team leaders in place. Everyone is working well. Work is happening. What should you do next? As leadership, you need to now focus on building a leadership pipeline. Establish a framework for leadership development so that the organizational status quo remains unchanged.
There are many ways to develop such a pipeline. I have noticed that creating a model that nurtures leadership and builds an internal stepladder that moves eligible candidates from one position to another to work wonderfully. The basic focus of this model is to look inwards rather than externally to find suitable leaders.
And finally, it is important that you begin to focus on employee satisfaction and not just on performance. By doing so, you will ensure that your workforce won’t be fearful of failure because they will see that failure goes hand in hand with growth. And this growth comes from trying out new things, failing at them, accepting that sometimes some things don’t work and then trying again. It also helps in building trusting relationships with the workforce which encourages them to work well even when the leaders leave the room…Because after all, the leaders can’t be present all the time.