When you first start a business, your job is to breathe life into your idea, and keep it from dying. Those first few months are exciting and nerve wracking as you go through the process of discovering who might be interested in buying what you have to sell. But once you figure out the product-market fit, your focus needs to change from survival to growth.
Here are five “must do’s” to keep your company heading in the right direction and achieving its growth potential.
Resist the temptation of power
The role of the CEO changes as the business grows and adapts. When leading their company through the startup phase, CEOs do almost everything themselves and make all the decisions. They look for people who will do what’s asked of them. Rather than letting 1,000 flowers bloom, the CEO decides which flowers will get planted and where.
Making all the decisions and having the world revolve around you can be very seductive. CEOs can begin to believe that they’re the most important person in the company, the only one who can or should make the decisions – and that belief can actually stunt the growth of a company.
Successful CEOs understand when they know enough about what customers value to “set the direction” and hire people that they can delegate to as quickly as possible. It’s not easy to change from someone who has been making all the decisions to someone who begins to delegate decision-making to others.
The role of a CEO needs to change from being in control of everything to hiring people and delegating to them – and as the company grows, to hiring people who know more than you do in the functional areas of the business such as sales, marketing, product development, finance or IT.
CEOs need to step back, share the power and stop dictating the direction of each of these areas, mold the team, and coach them to communicate, work together, plan and execute for future success.
Manage yourself through the ups and downs of growth
While we all wish that company growth was simply a straight line from bottom left to top right, the fact is that growth is often accompanied by transition points where significant turbulence takes place. Sometimes this turbulence is related to transitioning from initial growth to rapid growth, other times there may be external or environmental factors that will impact the company during rapid growth.
There can also be personal or health crises that take you by surprise. Personal, internal and external events can send a company into turbulence, but having a plan and a team can prevent your organisation from heading into a death spiral. The CEO who understands the “why” behind a company’s mission and hires people who share the mission, values and vision will have a much easier time managing these ups and downs.
Have the right people around you
Successful CEOs know that success is dependent on having the right people on board at each stage of growth. They continually ask themselves, “Do we have the right people on the bus, and are they in the right seats on the bus?” These people are mission driven, creative problem solvers, and teachers and learners who understand how working in a company enables them to achieve their own personal mission.
CEOs who have these kinds of people in their company need to make sure they don’t de-motivate them. CEOs also need to insist on diversity, since research has proven that diverse teams – and a diverse boards of directors – produce better results. For example, boards of directors that include women are more successful and profitable, and teams with people from diverse backgrounds come up with more innovative solutions.
Finally, successful CEOs understand that they have two options when someone’s not working out: They can either try to change the PEOPLE, or CHANGE the people.
Stay ahead of the competition
Companies that are growing rapidly must develop a strategy, analyse what their competitors are doing, and use this to plan their company’s future. Speed to market can be a real competitive advantage.
CEOs are often surprised by the need to reinvent business operations because the systems, processes, and procedures that served them well as they transitioned from initial to rapid growth are not strong enough to support their continued growth.
It’s not that bad decisions were made when those systems were purchased; it’s that the company has outgrown the systems’ capacity to serve the company. Just as a child outgrows their jeans when they go through a growth spurt of 20cm in a year, companies outgrow their systems when they are racing to stay ahead of their competitors.
Take risks and stay forward focused
Leaders are not timid. They take calculated risks and bet on people, markets, and ideas. They have a healthy paranoia, challenge assumptions and never let themselves get comfortable with the status quo. When things don’t turn out as planned, they take the time to discuss what went wrong with their team, they lean in, and learn to navigate through uncertainty.
Remember that snow melts from the edges, so watch what’s happening around the outside and look for emerging trends and new competitors. Rather than keeping all your cards close to your chest, use your networks to help workshop ideas and stay abreast of artistic, technological, social, economic, and political changes, as well as changes in customer preferences.
Going from startup to scaleup and moving into rapid growth can be intimidating. So be open to collaboration, seek introductions and advice from your colleagues, get the right people on your bus, delegate, share power, keep taking risks and work hard to achieve your growth potential.
Professor Jana Matthews is the ANZ Chair in Business Growth and Director of the Centre for Business Growth (CBG) at the University of South Australia’s Business School. Professor Matthews helps CEOs, executives and directors unlock their organisation’s growth potential, develop and execute plans for growth, attract and retain talent, develop products and services that meet customer’s needs, and improve their leadership effectiveness.
Featured Image | City of Melbourne/ That Startup Show / Photographer Wren Steiner