Scaleup Essentials Part I – Great Leadership
Why Leadership Matters
Leaders of scale up businesses face a seemingly never-ending set of challenges and tasks – and their roles constantly change over the course of their tenure. There are a number of key aspects to leading a scale up business, but the following are among the most important.
The difference between scale ups and start ups
A start up and a scale up operate very differently – and scale up businesses face many unique challenges across their entire operation. This can require a variety of new skills and experience in finance, IT, human resources, production, and more. In a start-up, the entrepreneur has to pick up many of these skills himself. In a scale up, bringing in specialists is more likely to be the answer, possibly on a part-time basis to start.
It also means knowing when to say “I don’t know.” Leaders who choose to get outside help when needed, seek input from other talented individuals, and work hard to grow and improve alongside their business are far more likely to succeed than their peers who opt to go it alone. Getting a Non-Executive Director building a Board can help.
Continuing education, such as weeklong courses or even full degrees, can help fill in your knowledge gaps, as can having a mentor or advisor.
Think in terms of transformation
Scale up businesses don’t just make minor, incremental changes to their organisations over time – they sometimes go through total transformations. If a company is growing at a rate of 10%, they are likely improving their financing, business systems, and everything else simultaneously. Scale ups are constantly examining their strengths and leveraging them to find ways to set themselves apart from their competitors.
Share your vision
Growth happens organically, but scale up growth is often the result of careful planning for years to come. Scale ups become significantly more complex organisations as they grow, and this often distracts employees – especially those with extremely specific functions that may not always be in complete alignment with the business as a whole.
Scale up leaders aren’t just bosses. They need to be able to tell the story of their company, make sure their employees understand it as well, and give a sense of progress, growth, and forward momentum to the business as a whole, even when facing massive challenges.
Make plans and have a strategy
In a scale up business, every piece of your business plan has to be part of your greater vision. As an example of this, consider the fact that once you begin to scale up, you will likely need significant investment to continue growing. Price cuts, new hires, and other factors can affect your profit margins, and you will need to be able to explain to your team how these potential short-term disadvantages position you for future success.
Don’t try to do everything
As a leader of a scale up business, you simply can’t do everything – and need to focus on what you’re good at.
Position your business to operate and function successfully without you. In fact, some business leaders recommend that you spend at least one day a week off-site or out of contact to ensure that your organisation can operate autonomously. Hand off crucial responsibilities to trusted individuals, and only hire for senior roles when you’ve found individuals you would be comfortable delegating your job duties and responsibilities to. Again, in the early stages this may be senior people but on a part-time or fractional basis, such as a part-time Commercial Director or COO. Better to have part of a heavy hitter who can take responsibility than downgrade the role to someone more junior who can’t.
This strategy also helps determine your day to day workflow. It allows you to work on – rather than in – in your business, allows you to see things from the top down and from a wider vantage point, and gives your developing business the best chance to excel.
Pay attention to details
Delegating job duties is no excuse for missing key details. Entrepreneurs who only focus on the big picture rarely succeed at operating scale up businesses. Think about how a CEO like Apple’s Steve Jobs was relentlessly hands-on with product design throughout the entirety of his time with the company. In fact, he even went so far as to respond to individual customer emails when he felt it necessary and appropriate to do so. This strategy is by no means ridiculous – many business leaders and consultants recommend that CEOs spend a little under half their time determining exactly what their customers want and need, what they’re thinking, and how to better serve them.
Make the tough calls now – not later
When a scale up business identifies a major problem, there’s no time to waste in addressing it. For example, if an employee – even someone who has been with the organisation for a long time – proves that they are no longer up to their tasks, this needs to be solved quickly to stop it from creating other issues. This doesn’t always mean ending a relationship with an employee, however. They could simply require new training or a new role that better takes advantage of their skill set.
Furthermore, not all entrepreneurs are suited to meet the challenges of a scale up business. The many, many different roles a scale up CEO faces are not always in alignment with what made the CEO excel in the start-up phase, and these entrepreneurs sometimes end up bogged down in the day-to-day when they need to be providing a bigger vision.
Some of the most successful entrepreneurs in the world build start-up companies to a specific size, sell them in the scale up phase, and start over again – and there is absolutely nothing wrong with that approach. But an option is to get a Managing Director or CEO to run the engine room, even on a part-time (or fractional) basis to start with.
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About The Author
John Courtney is a serial entrepreneur, and Boardroom Advisors is his seventh business. He is highly ranked in the Top 100 UK Entrepreneurs list by City AM and is a winner of the Lifetime Achievement Award from techSPARK. John has been a Board Director himself for over 40 years and first started placing Non-Executive Directors over 25 years ago. Boardroom Advisors is on Stand C10.
He is also a very experienced business Mentor, with Microsoft Ventures then Microsoft Accelerator (now Microsoft Scale-Up), Pitch@Palace, SETsquared (scaleups spinning out of the Universities of Bristol, Bath, Exeter, Surrey and Southampton) and Entrepreneurial Spark (now NatWest Accelerator).| Monday 21 October, 2019