Getting your Company Ready for Continuous Growth
If you want your company to power through the startup stage and into initial growth, you will need to change from doing everything yourself and taking all the decisions on your own
Many entrepreneurs are surprised when they discover that their companies, like their children, require different kinds of leadership at different stages of growth. When starting up, your company is an infant and you have to do everything for it. Initial growth, on the other hand, is similar to childhood where you try to embed good habits and delegate some of the responsibilities for your child’s development to others. Rapid growth is like rock ‘n roll years of the teen-age, and continuous growth is similar to adulthood with its many life-changing events.
Some CEOs get stuck in the startup stage, thinking the way to be successful is to do everything, tell others what to do, how to do it, and take all the decisions themselves. But, if you want your child or your company to power through the startup stage and into initial growth, you will need to change from doing everything yourself and taking all the decisions on your own to setting the direction, clarifying the decision rules, and delegating parts of your job to others.
Rapid growth requires you to play a different set of roles because you will need to hire people smarter than you in departments like finance, HR, marketing, product development, sales, technology, and then mold them into a well-functioning executive team. As the company accelerates up the growth curve, your job is to coach them to work together as a team, plan, and communicate effectively with employees, customers, and stakeholders.
Assuming you and your team pick the right growth strategy, you will need to play four very different roles when your company moves into continuous growth, which are:
Strategic Innovator and Change Catalyst
One of your roles in the continuous growth phase requires you to look outside your organisation for trends in technology, new competitors, new market opportunities, changing customer demands, and changes in the externalities. Once you have identified the opportunities or threats to your company, you and your employees will need to get ready to capitalise on, or repel them. And that often requires change.
Most people don’t like change. They don’t like to think that what they have been doing is no longer relevant – or that the systems, products or markets they selected and worked so hard to develop – will need to change. Many people fear change will “make things worse”. As behavioural economists have noted, the psychological pain associated with loss is twice as powerful as the joy from gain – or even the prospect of things getting better. CEOs should not underestimate the importance of their role as change catalyst. Teaching and enabling employees to change is one of the secrets to growth.
Organisation Builder and Chief of Culture
As the company continues to grow into new markets, with new products or services, or merges with/acquires other companies, the organisational structure will need to change. Some team members may move on, some will be promoted, and you will need some new people with different skill sets and experience in order for the company to continue growing. Avoid the temptation to replace the person who left with someone like him/her, doing the same job. Reassess the position, determine whether someone internally can do some or all of that job; and when you hire someone new, make sure he or she not only meets your current needs but has the capacity to grow and take on additional responsibilities in the future.
Although the definition of a company’s mission, values and vision during initial growth is essential, that alone is not sufficient for growth. Selecting people who share the mission, embrace the vision, and fit the values – and getting rid of those who don’t – brings values to life. Company culture is the manifestation of values at work in the day-to-day, and if the CEO and management team don’t live the company’s values and continuously move the company toward the vision, awesome employees become cynical, lose faith, and eventually leave.
Candidates are attracted to companies with well-defined values and strong cultures. Getting the right employees on your bus – and in the right seats on the bus – will enable your company to operate at a lower cost, perform at a higher level, and accelerate growth. Your role as “chief of culture” requires that you identify, communicate, live and challenge others to perform in accordance with the values, mission, and vision of the company.
Each stage of growth has its own unique challenges. But the ability to shift and take on new roles; to make decisions in accordance with the mission, values and vision; to hire people who fit the values; and can move the company forward is what enables the CEO to take a company from start-up to continuous growth.
Jana Matthews is the ANZ Chair in Business Growth, Professor, and Director of the Australian Centre for Business Growth at the University of South Australia’s Business School. She has a doctorate from Harvard, has founded five companies, and was on the founding team of the Kauffman Foundation’s Centre for Entrepreneurial Leadership. Matthews is an expert on entrepreneurial leadership and business growth, has written eight books, and designed award-winning programs that teach CEO’s and executives how to lead and manage growth companies. She was selected as one of the most influential women in Australia in AFR and QANTAS100 Women of Influence Awards 2018.