Recently, I was speaking to a start-up founder who has built a sustainable, innovative business model over the last couple of years. The organization is a small team of 6-7 individuals working out of one location. Given their success, they are now looking to expand to multiple cities/locations and add to their service offering. An obvious implication of this is that they need to recruit more people, create an organizational structure and have some of their existing/new people take on leadership roles.
As we were speaking, I thought to myself - pivoting from an initial product design/business model seems to have become a given in the startup playbook. However, as startup leaders expand their businesses, they sometimes fail to apply the same logic to themselves – that is, the need to pivot their approach given the change in context.
Here’s what a few start-up leaders I spoke with have to say
“As the company evolves from a start-up to a small organization, its needs are different, the needs of the team are different, and therefore expectations from the leader shifts. The role of the leader becomes two fold as the company begins to expand – external (business & expansion) and internal (people & culture)” -
Punya Raheja, Founder and Owner at Syncworks.in
“As the idea evolves into an organization, it’s important to shift from doing to direction…and that is a difficult transition especially because startup founders are attached to what they are doing and they want it done a certain way” –
Sumit Shah, Co-founder and Director at Bombay Hemp Company
“As a founder, the hardest part is evolution of not just processes but your own mindset to accommodate growth and balance. Situations demand you to become more proactive than reactive, to let go of emotions and be more practical to survive the cut-throat competition that's out there. As a founder, the biggest challenge is bringing in this transition (within you and the organization) as you gear up but at the same time keeping the DNA of the company intact (values, vision, culture)” –
Kanika Khanna, Founder Olready
Given this, here’s an observation and a key challenge
Observation: It isn’t about choosing between one’s current skill sets/behaviours or those needed for the future. In fact, it is about combining the two, in order to both retain the uniqueness of the idea and scale up/expand the business.
Challenge: Recent Harvard research has found – whilst most CEOs and founders will tell you that people are their most important asset, a majority of them feel like they don’t have either the investment capacity or time to address the need for talent/leadership development. However, most of us are aware that the common denominator for any successful company (regardless of industry or size) is strong leadership, with the ability to attract and retain the best talent.
There’s a lot that needs to shift as the context shifts – right from culture to organizational structure, process, talent management etc., however, it ALL begins with the leader making the right changes. So, as your context shifts, what are some areas you need to be focused on as a leader?
Purpose/vision - Purpose is not what a group does but why it exists. It’s about a collective identity. Purpose makes people willing to put discretionary effort, take risks and do the hard work inherent in driving growth. As the business expands, and the number of people increase – it could be tempting to move away from keeping your purpose at its core and grabbing opportunities when they arise. Whilst it is possible (and perhaps natural) for the purpose to evolve, letting go of one’s own and organizational purpose may not be good news over the medium/long-term. As a start-up leader, stay true to your compass and leverage it when making key decisions!
Embrace the paradoxes of leadership - At the heart of being a successful start-up leader is the need to embrace some key paradoxes of leadership, and to make a shift from the EITHER/OR mindset to the AND mindset. Here are 3 key paradoxes
Foster experimentation AND drive performance
Display patience AND urgency
Encourage bottom-up initiative/ownership AND intervene top-down
Leaders who stay on the right side of these will be unable to build a conducive culture for growth and/or a cohesive team. Those who only stick to the left may risk driving performance for generating ideas and/or encouraging people. The correct position at any moment will depend on the circumstances/situation.
Create the right context and ecosystem for performance – As the organization expands, performance won’t depend only on ideas, strategy or the ability of individuals/teams…whilst these are important factors, another critical (yet often ignored) aspect is the right organizational context and ecosystem – an environment that encourages ownership, innovation, provides flexibility and so on. Therefore, as start-up leaders, it is important to reflect on –
What is the culture we want to create?
How does this align to our vision and future strategy?
What behavioural changes do I/we need to make to create this culture?
Self-awareness – The all-pervasive ‘self-awareness’! I mention self-awareness in almost every video/article because it is just SO critical. Understanding one’s own purpose, strengths, development areas and aspirations is key to being able to manage and adapt one’s behaviour. Emotionally self-aware leaders are those that are attuned to their inner signals, recognizing how their feelings affect them and their job performance. Dr. Les Parrott, a well-known psychologist, author, and a co-founder of eHarmony, says that entrepreneurs, in particular, can benefit from taking a close look at their own thought patterns, emotions, and behaviours.
In his words, “Self-awareness is at the pinnacle of psychological health. An organization can only be as healthy as its leaders. Lack of self-awareness can be toxic." Individuals who see themselves clearly are more likely to be able to grow, or "move the dial on their personality as needed. A self-aware leader is also likely to be more open to feedback, collaborate with people who bring diverse perspective/skills and hire teams with higher self-awareness/emotional intelligence.
Manage your energy – If you’ve read through this post (which is perhaps only 10% of the role of a start-up leader), you’re probably wondering – “wow, that’s a lot of work”. The only way to be able to do all of this over the long haul with the same level of passion, enthusiasm and joy as the beginning is to be able to manage one’s energy levels…As a start-up leader, you can’t reduce your to-do list, neither can you magically increase the number of hours in a day. The only thing in your control is how productive and energetic you are. One of the biggest derailers of high energy levels is poor lifestyle choices, which, unfortunately, I see a lot of entrepreneurs/leaders in start-up organizations make. And it’s no rocket science – exercise, the right diet, a few minutes of meditation can make all the difference. Recalling the fact, ‘I am bigger than the challenges that are in front of me’, will give you enormous confidence and energy to sail through tough situations.