5 Pitfalls CEOs Must Avoid to Scale Successfully Reaching the next level of growth and profits requires strategic planning.
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Fast growth is both highly coveted and difficult to manage.
Beyond the headlines of large funding rounds and star hires, Inc. 5000 designation and Fortune 500 clients, fast-growth startups are often hot messes thriving despite themselves.
If you've never worked in one, you can hardly be blamed for not knowing how the proverbial "sausage" is made.
A typical day might start with a big client leaving you for failing to deploy an important feature in a timely manner, as promised. One of your top coders takes an offer at Facebook. Your CFO tells you our last funding round is running out, leaving you five months of runway.
According to your HR manager, the top-producing sales director is poisoning the company culture by openly disrespecting product and marketing peers. Company processes and protocols are poorly documented, sometimes non-existent. Job descriptions change overnight. Engaging employees remotely has become an acute challenge.
And yet, you can't hire fast enough or get enough quality candidates through the door. Press is abuzz about a celebrity Twitter endorsement and your vaunted investors. Meanwhile, those investors are doubting you in board meetings, diluting your equity, even daring to discuss a professional CEO to replace you.
In short, you've already moved fast and broken lots of things. Product-market fit may have been achieved, but competition is heating up, and your insane growth looks ready to taper off later in the year without strategic funding and a few key management hires you haven't pulled the trigger on from FAANG and more mature competitors.
As a founder, you've made a lot of the right calls, so far. But you love building things, not managing processes or divas. You've dealt with complexity before, but it seems to be dragging you down lately.
As the company enters its awkward-teenager stage, your mindset must become more "adult-like." Advice from mentors and VCs is often conflicting or irrelevant, so you're often left having to figure it out yourself, as you go along.
Here are the five major pitfalls to avoid on the road to success.
1. Getting too comfortable
Get clear on — and remind yourself regularly about — your mission and values before you pour all your energy and resources into scaling.
Success often breeds complacency, which breeds failure. Make sure you live said mission and values in every single interaction and apply them equally to everyone in your company and orbit. Otherwise, success will distort everything and make you forget who you are and where you're going, as well as dilute whatever "special sauce" your team and company used to get here.
2. Not hiring professional managers and coaches
As your company matures, you need tighter policies and procedures to enable new people to onboard effectively and get up to speed quickly with how you do business. And as for coaching, it's no longer the province of executives and managers only. If employees don't feel that you truly care for them and want them to do well as professionals and humans, they'll pick up and leave for greener pastures.
Related: Why Everyone Needs a Life Coach
3. Hesistating to hire and fire quickly
Many founders are either too slow to hire or too slow to fire, missing both a clear hiring philosophy and the processes to onboard and train new recruits properly. Skill fit is important, but culture fit, potential and hunger to succeed may be just as (if not more) important. Test candidates accordingly for behavioral cues and coachability in interviews, rather than just check off lists of skills and experience by rote. Once they're in, create excellent conditions for new employees to succeed. Those who don't respond by producing great results may not belong on your team or in your company, so evaluate quickly and move quickly to reassign them to another team or let them go. Speed and quality are both critical in business, and the right combination of talent on your team means everything for speed and quality of work and decision-making.
4. Taking your people for granted
Treat your employees like gold, and they'll treat your customers and each other like gold.
There is no magic tech or clever words for creating and maintaining employee engagement if you don't fundamentally care about — and regularly demonstrate said care — for your employees' personal and professional welfare by creating the right conditions for their success. If you create excellent conditions for employees to thrive, the vast majority will respond with great work, high productivity and loyalty. Don't forget who you are or where you came from. And don't hire a-holes or treat high-maintenance high performers differently, or you risk your best people leaving.
5. Getting complacent and too busy to learn and improve
Constantly challenge yourself and help your people grow with you and your company, both as humans and professionals, financially, careerwise and spiritually.
Constant learning and development are not just a tool for employee retention, but rather a lifestyle for both successful founders and the best teams to constantly improve and grow and feel a part of something greater than themselves. This doesn't just mean learning to code or becoming a new manager, but also understanding themselves and others, and becoming more empathetic and effective communicators, coaches and leaders.
The temptations along the way to building and scaling a large and profitable company are many, including all sorts of experiments and misadventures misaligned with your mission and values.
Your ability to get and stay clear on your mission and values, to empower and trust your people to do their life's best work with you, and to bring in the right people and processes will determine whether you scale successfully.
As you continue to grow and see the results of your efforts, make sure to enjoy every moment and stop to smell those roses.