7 things to know before scaling your start-up
Updated: Apr 22, 2021
Previously on Scaling Start-Ups...
We followed the fictional account of Chen and Olga, two start-up founders, who took their business from local start-up to global expansion. They came up against frequently experienced crisis points as they journeyed through the 6 phases of growth in Greiner's Curve. If you are going through similar growth phases, here are the 7 things to know before scaling your start-up.
They were experiencing 6 phases of organisational life-cycle growth depicted in Greiner’s Curve. Each growth phase was made up of an evolutionary and stable growth, followed by a crisis where revolutionary changes were needed for their start-ups to carry on growing.
Founding leaders and HR folks, you need awareness of the growth phases and crisis points you will most likely encounter. Knowing this can help us anticipate the challenges ahead, make sure we’re ready and have solutions at hand.
Greiner's Curve: Organisational life-cycle and growth journey
Here are 7 things to know before scaling your start-up
1. Ready or not, funding inevitably pushes the business into the next phase of Greiner's Curve
Each round of funding acquired (or any factors contributing to growth), naturally pushes the business to the next stage of growth in the Greiner’s Curve. This inevitably triggers a 💥crisis point (revolution stage) to the way the business operates. This is regardless of whether the evolution and revolution of the previous stages are complete.
Businesses in hyper-growth may find themselves knee-deep in the challenges of various phases at once - so you will either need to slow growth down or speed up the evolution and revolution process. Ways of working that got you to this point will not necessarily work in the new phase of growth. The important part is to embrace the one truism: change is the only constant in business growth.
2. Management layers are inevitable as start-ups grow
Many founders hate ‘hierarchy’ in an organisation (with the best intentions!). What they’re often resisting is bureaucracy🤯: excessively complicated processes that slow down the growth of the business.
At each growth phase, everyone cannot do everything: we need to start playing to people’s expertise, experience and strengths - this will get things done quicker and better! Organisational structure will naturally grow with the introduction of new roles - some specialist and some aggregator roles (e.g. managers).
If you are allergic to the traditional management role, think of this role as a router of an increasingly complex network of people. The manager nurtures and connects multiple groups of people for alignment towards common goals. The type of leaders you would like them to be? That is up to you to define!
3. Roles in start-ups expand and multiply, not divide or shrink
Moving away from everyone doing everything as the business grows creates more roles and responsibilities. This means roles increase in depth and may lose the breadth of responsibilities. As someone new is hired, be cautious that employees may feel like they’re being demoted or losing their value. Although this may not be true, be mindful to communicate this transparently so no one is sitting in the corner thinking ‘someone else is taking my job’.
4. It is not about who makes the decision; it is about how and where the decision is best made
In the journey of growth, decision making will go through a rollercoaster of ownership from the founder to the senior leaders to the managers, to teams and so on. If you rely on decision-making being about the ‘who’, then naturally it becomes the HIPPO’s (highest paid person’s opinion) decision.
If you start with the where and how decision should be made, you will most likely find the best solution for your organisation. For example, you may decide people who are closest to the problems is where the decision should be made. And you can provide the right data, skills training and perhaps even guidelines on how to make great decisions.
5. The key to communication is alignment
It is not uncommon to hear about the good old times when people ‘used to know everything that is happening.’ We fret about who tells who what, who should hear it from the CEO, should it be on Slack or email, when it should be communicated….the list goes on.
If we dig a little deeper, people want information that can help them do their job effectively (‘It would be good to know if someone has left the business so I don’t sit there wondering why they have not responded to my request’), and to be informed of updates to feel a sense of belonging (‘I didn’t know we recycle mugs, that is so aligned to my personal values and beliefs!’).
Communication to create alignment helps each individual to support each other to focus on what is most important for the collective.
6. Be prepared to go through a ‘speed learning’ experience in letting go
If you are a first time founder CEO or working with a founder CEO that does not have years of work experience, this will be the quickest leadership development in action as your business grows! 🚀
Typically, CEOs take 10-20 years in the making; here’s an example of General Electric’s CEO journey. Every job rotation, stretch assignment and mistake provided the depth of experience, skills and insights needed to lead an organisation.
However, what a founder CEO has in common with someone who has undergone a more traditional CEO pathway is that they have the vision and a following of people who believe in that vision. The biggest learning a founder CEO (or any CEO) might need to prepare for is how do you let go and empower, enable and trust your people to achieve your vision? (without you having to point out how the code should be written!)
7. Don’t solve what you need now, solve what you need in 3 years’ time
For systems and tools selection, be mindful of not being wowed by shiny features that may not solve your future problem(s). From the Greiner’s Curve, you know what challenges are around the corner. If you take this into consideration, you can avoid the need to change tooling to meet your ‘most current needs’ by already meeting the needs of the future. Is it possible to be even more future-proofed? Think integration with multiple other systems as well as the ability to raise a ‘Chinese wall’ for your future acquisition or mergers (I am sure all start-ups would like to get to Phase 6 of Greiner's Curve 😉).
Embrace crisis points ahead, just don’t do it blindly!
Crisis points are inevitable in every growth journey and it is not necessarily a bad thing. It may throw us into unchartered territories, but it is necessary for growth. How long you will remain at each crisis stage depends on how ready you are as an organisation to weather the crisis ahead.
In the next episode...
Are these all the challenges that lie ahead in a start-up’s growth journey? No! We explored organisational changes and crisis points as our fictional founders, Chen and Olga journeyed through the 6 phases of growth in Greiner’s Curve.
Now it's time to explore an equally important facet of growth in start-ups: employee's needs. Stay tuned for the next episode!