Your organization is growing at a fast clip. Where you used to have a small team of entrepreneurs (founders) who quickly made broad-reaching decisions and contributions, you now have an increasingly more specialized talent pool bringing unique expertise to bear. One of the trials HR leaders of scaling organization’s face is enabling the evolution of the organization’s structure and leadership to deliver the growth and profitability desired while lessening the associated pains and inevitable complexity. Founders in particular experience “scaling pain” well before HR and the C-suite are able to make calculated organizational development decisions.
As Verne Harnish states in his book, Scaling Up: How a Few Companies Make It...and Why the Rest Don't, scaling is when the business shifts from “a handful of employees to something significant…” (Harnish, 2014) Few start-ups actually survive and those that do never scale to achieve the continued 10X growth that entrepreneurs crave. Harnish suggests one of the reasons organizations don’t scale is due to their inability to grow leaders who have the capabilities to delegate and predict, yet I have found that there are other significant challenges founders experience.
What have I identified? Founders are confronted with:
- Lack of role clarity and defined accountabilities as specialists are brought in
- Diminishing feelings of worth and value to the organization
- Ambiguous decision rights among functional leaders
- Inexperience in influencing and leading up, down and across a more complex organization
- Insular focus and a lack of peripheral vision and strategic thinking
Even if you aren’t in a scaling organization, you may recognize some of these challenges as being applicable to any significant organizational change or business interruption/disruption. For example, every time a new executive is brought into an organization, leaders struggle to know their place, how to get decisions made and certainly feel as though their contribution is being questioned. So, how do you address these challenges facing founders?
HR needs to take a more strategic role in the organization. Managing the day-to-day activities of a scaling organization can be all-consuming. You are spending your days thinking about attracting and onboarding talent as quickly as you can and upgrading your systems to support your growth while also doing what you can to create new organizational structures that are agile. You may even be building onboarding programs and supporting some team development. These are all important tasks, and they can become all you can handle with the HR team you have in place and the financial resources available. Still, there are some additional actions you should take.
Get out in front of the scaling challenge. Don’t let business strategy be developed absent a thoughtful conversation on what talent needs you will have over the next months and years to execute on the strategy. Too often, HR is trying to catch up to the staffing needs rather than having a measured plan in place to achieve hiring targets using the best available resources to address:
1. Lack of role clarity and defined accountabilities as specialists are brought in
When bringing new talent into the organization, proactively work with the founders to define roles and accountabilities. Leverage a “from-to” approach to help founders appreciate that bringing in more talent doesn’t just mean more resources, but it means the jobs of the existing team and leadership needs to move from a generalist mindset to one defined by more explicit areas of responsibility. By being more attentive to the change up front, leaders can begin to shape their expectations for how they will need to lead and perform.
2. Diminishing feelings of worth and value to the organization
Provide development/ coaching to your founders who are now assuming new leadership responsibility. Part of that development should be on making the transition to a leader of others in a growing organization and on managing vision and purpose. In addition to providing much needed skill development it also demonstrates a commitment to those leaders, which can immediately help them feel valued as part of the future of the organization, rather than “the old guard” from the early days.
3. Ambiguous decision rights among functional leaders
As more “chefs join the kitchen” it is inevitable for leaders to struggle with ambiguity and loss of control. In a small organization founders have a large sphere of influence. As the organization grows, decision making gets distributed and it isn’t often clear who owns which decisions. As part of the roles and accountabilities work it is imperative to keep that component in check. Who owns brand voice decisions? Who owns capital expenditures? Who owns staffing?
If you want to retain the speed of an entrepreneurial organization, you have to constantly revisit decision rights as you build and alter the organization’s structure. Nothing is more disempowering to a founder than having the authority to make decisions taken away. While that may still be the end result, if founders are part of the conversation up front and understand the context, then scaling pain can be averted.
4. Inexperience in influencing and leading up, down and across a more complex organization
As the organization grows, the challenge among founders to balance their inquiry and advocacy skills becomes greater. With more people in the organization and more complexity, leaders need to make a shift in how they build cross functional partnerships, manage up to a leader who may be spread too thin and lead a team that is constantly in flux from changes in priorities, membership and maybe even direction. Helping the founders recognize the changes they need to make to have a 360-degree influence is crucial to ensuring their continued effectiveness and contribution. Access to the most senior leaders, including the CEO, will become less and it will be up to the founders to lead and influence in ways that drive the best decisions and ideas forward. There are training programs that can be used to address this shift in the organization and of course coaching can be very powerful in supporting behavioral changes.
5. Insular focus and a lack of peripheral vision and strategic thinking
You might imagine an insular focus on the business would be something that strangleholds only mature organizations. In fact, it is something that can destroy an organization in its infancy and as it is scaling. Little is more dangerous among your founders than to have them become so absorbed in the day-to-day product and business development, that they miss the arrival of new competitors, and changes in consumer preferences and market conditions. While you may be tempted to support a laser focus on achieving business plans, it is essential to also promote an environment where leaders are continuously keeping a pulse on the marketplace. Plans can be altered, but missing a significant market change can be disastrous.
You can teach the skills of strategic thinking and hone skills in peripheral vision (seeing what is around you even before it is in clear focus) through regular strategic business planning. As part of that exercise, done quarterly, require leaders to include an assessment of the external market, the competition, and the consumer. By keeping this broader, strategic view, you are less likely to be surprised or surpassed by others. It’s obvious and yet founders can get tunnel vision on their objectives and miss the obvious signs that show a threat.
HR can be a formidable partner at the table by proactively looking ahead at the risks and opportunities facing founders as well as the new leaders integrating into the organization. By clarifying roles and accountabilities, providing development, establishing decision rights, enabling founders to lead 360, and keeping a broad focus on the market, you can ensure your founders and business thrive.