Building companies is about choices.
In the early stages of a company – especially in the intense beginning of an evolving startup – there are daily choices being made about the kind of business being built.
In the busyness of getting a company up and running these choices manifest in:
- The kind of culture that is built
- The way people are grown
- The attitude toward customers that is fostered
- The strategic direction that is chosen
- The work ethic that is instilled
- The attitude toward growth, innovation and expansion.
Such choices are often made unconsciously – culture, for example, is generally cued by the founders and the way they conduct themselves. Whether conscious or unconscious, the die is often cast and is usually hard to change down the line. Such is the ‘sticky’ nature of organisational change.
Each one of these crucial decisions is played out daily as startups rapidly expand. So, it stands to reason that it is important for the leader to devote the appropriate time and energy to getting these decisions right.
To name the crucial areas for start-ups to focus on, our experience has shown that the following are key:
- How leaders lead
- How culture is set and adhered to
- How profit is thought about (this is a more nuanced topic these days)
- How growth is managed (particularly how sales is systematically driven)
- How training and development is handled
- How the business stays connected to customers
The central issue regarding the above is how they are approached in a context of scarcity: time, energy, resources and skills. Seed funding conditions don’t allow for the fancy, rigorously interrogated, expansive, outsourced processes that are the norm in larger, more established businesses. So, it’s a given that these concerns will need to be addressed effectively to set the direction-of-travel, without taking one’s eye off the ball.
Fortunately, there are minimum-requirement ways to attend to these key questions that can provide immediate impact and value to a business that won’t stretch it beyond what it can manage. In fact, a relatively small amount of engagement and thoughtfulness will likely get you 80% of the way there.
The lens through which we’ve been looking at this at Lockstep revolves around which leadership contributions will best enable growth. The rationale is that startups don’t have the luxury of time. Venture Capital Funds’ hurdle rates and investment horizons mean that success has to be proven quickly, so that funding isn’t withdrawn. Because of this, the conditions of implementation are different and require a more time-sensitive approach.
We’ve been trialling a scenario-specific leadership approach for startups at Lockstep which we’ve implemented within a handful of clients over the last year.
Here are our some of the key insights we’ve learnt:
Insight 1: Leadership skills can be learnt fast. The CEOs we worked with picked up the practices of leadership quickly and were able to implement some game-changing initiatives in a very quick, easeful way.
Insight 2: The businesses responded incredibly favourably and with spoken gratitude from staff for the CEO taking the time to focus on their own craft. It seemed to set a healthy, vulnerability-friendly tone for the rest of the business to also approach their own development with gusto.
Insight 3: The leadership development the CEOs undertook opened up crucial, previously unsurfaced issues that might well have otherwise been left uncovered and would very likely have caused damage to the business down the line.
Insight 4: Although hard to quantify over a relatively short period of implementation, the business as a whole felt more stable, sure-footed and clear about where it was going across the board, all employees included. The hourly and daily benefit of this is hard to overstate.
Insight 5: By spending a relatively small number of hours per week on deliberately building culture, CEOs can make a real impact – disproportionate to the amount of time spent.
Insight 6: Given the rapid pace and intensity of running a startup, co-founders or joint leaders often don’t find time for even the most rudimentary relationship maintenance conversations. By creating an intentional space for this on a monthly basis we were able to markedly improve the quality of these relationships.
Insight 7: Although startups don’t necessarily have the time or resources to follow a strategy to the letter, if they ignore it, they risk stagnating as a ‘small business’ – we’ve helped leaders navigate a middle road where strategy is kept top of mind whilst acknowledging the compromises that need to be made.
To sum up, we believe that leadership development for startups is worth pursuing and a lot can be achieved with a few light touches to the rudder at this early stage of a business’s development path.
If you are leading a startup company and looking to develop your leadership capability, connect with Richard Jamieson to have a further discussion.