By Gerry Valentine
A few weeks ago, I had coffee with a friend and got some bad news: his company is in serious trouble. The investors have ousted the CEO, the company has had massive layoffs, and the future looks very bleak. A lot of people were surprised because not long ago things were going very well. The company has a really innovative product, an impressive and socially responsible mission, and a track record of success. It seemed poised for rapid scaling.
But there have been some troubling signs for the last couple of years. As the company grew, its product quality started to suffer, and there were persistent delays in the supply chain. It added staff to meet demand, but many employees seemed confused and directionless. Then, the sales that had been growing so rapidly started declining just as quickly. Worst of all, as the pressure increased, many of the company’s leaders became overwhelmed — essentially they were deer in headlights. They were not able to inspire confidence, and company-wide morale collapsed.
My friend’s company has fallen into a very common trap for growing businesses: despite early success, the company was not prepared to scale. All entrepreneurs dream of runaway success — that time when they start seeing exponential growth and seem destined to be the next Twitter, Amazon, or Uber. For socially responsible businesses the allure is even greater. Reaching significant scale not only brings financial reward, but it also means we can have significantly more positive impact on the world. It allows us to make a difference at scale.
However, failing to put the right measures in place might mean that your company will not survive its own success. Here are seven critical things that, in my experience, companies need to do in order to scale successfully. Most should be done during the early years so the company is prepared for growth.
1. Establish Repeatable and Scalable Processes
Examine the key processes in your business: things like producing your product, servicing customers, managing finances, etc. Do they run smoothly, or are there frequent disruptions? Do your employees understand what to do at every step, or is there uncertainty?
In the very early stages of a business, uncertainty is normal, flexibility is critical, and you need to fight a lot of fires. However, as the business grows, firefighting becomes crippling. Look for opportunities to create repeatable processes, understand how scalable your processes are, and clarify any uncertainty among your team members.
2. Plan for Scale
As your company builds momentum, making changes becomes more difficult and requires more lead time. That is why effective business planning is critical. Unfortunately, planning is sometimes seen as the “castor oil” of business: it isn’t pleasant, but it’s for the best. That is because many planning processes are far too complex and not well suited to growing entrepreneurial businesses.
When done right, however, planning actually frees you up. It unlocks your creativity, helps
you anticipate the future, and lets you respond quickly to the unexpected — precisely the things you need as you build momentum and scale. For a lightweight and powerful planning tool, see my article “Conscious Business Planning” in Issue 4 of CONSCIOUS COMPANY, and available online.
3. Preserve Innovation
Conscious companies are highly innovative by nature, and if you are seeing rapid growth, your innovation is probably a big part of that success. However, as companies put in the structure needed for scale — repeatable processes, planning, additional personnel, etc. — they risk losing their innovative edge.
Leaders can maintain an innovative environment by instilling a few key practices:
- Encourage your people to continue challenging the status quo and experimenting, even when you have demanding growth goals.
- Create a culture of tolerance for failure (transform failure into a learning opportunity), because good experimentation means there will be failure.
- Make sure employees have the downtime to innovate: breakthrough ideas tend to happen when people have the opportunity to step back and think creatively.
4. Expand Your Talent Pool and Invite New Ideas
Teams that have worked together in the early stages of the company often develop close relationships. That is a very good thing and is often a key part of early success. However, these tight-knit relationships become a liability if the company is unwelcoming of outside talent, different perspectives, or new ideas.
Observe how easily new people are accepted into the company. Watch to see if ideas offered by newcomers are valued and evaluated or dismissed out of hand. If you see a problem, it is your responsibility to set a clear expectation that you value new ideas and talent.
5. Carefully Curate Your Culture
Katie Wallace, the assistant director of sustainability at New Belgium Brewing, has a great saying: “Culture is curated, not dictated.” She is absolutely right, because company culture cannot be tightly controlled or “managed.” Cultures typically evolve slowly over time. However, culture is critically important because it helps define how our stakeholders — customers, employees, the communities we work in, and others — experience the company.
Listening and observing are often the most important tools for curating culture, especially when preparing to scale your business. Take the time to carefully observe your culture. Ask employees how they would describe your culture. Note both positive and negative aspects, and think about the steps you can take to curate the culture over the long term.
6. Champion Your Mission
In many ways, your mission is the foundation of your company. Alignment around the mission is critical for motivating your team and operating effectively. However, as you add new people and face more complex demands, it is easy for the mission to get lost in the day-to-day demands.
As your company scales, it is critical for leaders to continually champion the mission, and to do so more strongly than in the past. This ensures that the organization remains dedicated to its core purpose.
7. The Evolving Demands on Leadership
Leaders in growing companies are often caught off guard by how rapidly the demands they face evolve. In fact, everything I have explained thus far is actually a leadership challenge and an example of evolving demands. The tough thing about leadership in a growing company is that there is no job description. Simply put, it is your responsibility to deliver whatever your company and your people need from you. There are, however, three foundational skills that tend to help leaders meet the challenge: listening, self-awareness, and high emotional intelligence.
In a lot of ways, leadership is the art of listening. Many successful leaders will say their most important lesson was to listen more and speak less. Good listening makes you more strategic and a better problem-solver, and it allows you to get the best from your people. Coincidentally, good listening is also a powerful tool for motivation. Leading a rapidly growing company also requires keen self- awareness — so that you are aware of your strengths and weaknesses — and the courage to seek help with your weaknesses.
Finally, it is critical for leaders in rapidly growing companies to remember that they are always under a microscope: employees are constantly looking to leaders for signals about what is expected, how to conduct themselves, and what is valued at the company. Leaders must have the emotional intelligence to defuse difficult situations and remain mindful of what they say and do. They must always be able to manage their emotions for the benefit of the company and their employees.
Gerry Valentine is founder of Vision Executive Coaching. He works with socially responsible leaders to build companies that can change the world - focusing on business strategy, innovation, and leadership. Gerry has 30 years of leadership experience with multiple Fortune 100 companies, an MBA from NYU, and a BS from Cornell University. Connect with Gerry: LinkedIn Twitter