Next Level Planning
Many startups struggle to adapt to the changing circumstances they face once they start to gain some traction and begin growing. Conceptually it makes sense that the skills required when the company is struggling, underfunded, and understaffed might be very different from when the company has investors, a strong leadership team, and is starting to pick up serious steam. The question for the founders is if they were the right leaders for the startup stage only or if they can also adapt and continue to play a valuable role as the company’s needs change. Embedded in that question is whether the founders can yield some of the control they enjoyed to access the funding and leverage the human capital available to shift into growth phase.
It is not unheard up for a self-aware founder to recognize that it is time to make a transition and turn over the reigns to the professional team. More likely, however, is that the board will initiate the transition and the founder will resist. This can put the whole organization at risk, distract the leadership team, and deflate some of the growth that the company is enjoying. A better approach to the selection process is to identify what this stage of the company’s life requires in a leader and carefully avoiding the tendency to either choose someone very similar to the founder or someone who is diametrically opposite.
Open conversations and planning for succession is a best practice. This allows everyone involved to have time to process the change, rather than it coming as a complete shock. Even still, it is likely that it was either misunderstood, not taken seriously, or completely missed by the founder. Ideally, the founder can get ahead of the board and initiate the succession themselves on their terms.
Next Level Thinking
Glenn Soloman’s Fortune article Transitioning from a Startup to a Growth-Stage Company gives some sage advice for startups that are on the brink of transition.
- Hidden Gems – Identify who your stars are and what they are doing differently to see if it can be taught to others. Carefully consider if this star is someone who needs/wants to advance or if they are happy being rewarded well for playing their starring role. Doing more of what is working really well can help take things to the next level.
- Find your flywheel – Cultivate and nurture sources of rapid growth that you can unleash when needed to propel expansion. Pressure to grow and continuously hit financial targets means you need to have some aces in the hole.
- Stay focused – Don’t get distracted from your core business. Stay tuned into the market for growth opportunities, but don’t bet the farm on whatever is new and shiny at the peril of your main business activity .
- Professionalize your process – It may be contrary to your startup culture, but finding ways to improve processes and add structure will position the organization for success in the longer term.