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How to Overcome the Leadership Challenges of Rapidly Scaling Your Startup

By Pratip Biswas,
business.com writer
|
Dec 16, 2019
Image Credit: Fizkeys / Getty Images
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Dig into how to face the top leadership challenges that startup owners face.

  • Make connections with all your employees.
  • Set up small, yet realistic goals that my employees could see themselves achieving. 
  • Hire the right experts.

Almost all startup owners, believe that the flexibility and spontaneity of the early startup days are going to be everlasting. But soon enough as the company starts to grow, we realize that to reach that Unicorn goal, we need stronger and better leadership to keep up with that progress.

The transition from a small scale startup to a big company is a crucial point of time. Without a strong leader at the helm of the ship, things can go seriously amiss, and the company can fail even before it reaches that 5-year mark. 

It is from my personal experience I’ve realized, in order to take on a proper leadership role one needs to understand the ways they can fail as a leader and what steps they need to take to stop them from making those mistakes. 

In a scalable startup, the leadership can fail quickly

Why do leaders fail? This question has haunted me. Almost all startup owners think of this question when they are faced with a challenge. From the experience, I have gathered that any startup leader can face four distinct kinds of problems. These problems may seem to be too complicated at the beginning, but they all come with simple enough solutions. And for the startup owners out there, I have tried discussing these challenges and how to solve them in the below points. 

Entrepreneurs often lack one-on-one contact with employees

All startups begin at a small scale, ideally with 5 to 12 people. At this stage, as a CEO, it is quite easy to manage everyone while keeping up a healthy CEO-employee relationship. This personal touch, however, is lost when the company begins to grow. 

As more and more employees are hired it is quite impossible to keep track of everyone. Soon enough leadership responsibilities are delegated to the managerial positions around the office. As a result, the CEO only becomes a vague figure at the head of the pyramid, who people have heard of, but never seen. 

This lack of one on one contact could have serious repercussions on startup success. Not only are employees going to be less empathetic of company goals, but we would also be blindsided if any issue arises since we have been so absent. This absence from the office place and our employees’ work-life is going to make them indifferent about the company and its success, because who is going to care for a company that doesn’t care for them. 

Being present among your employees. Now I know as the CEO of a growing company it is not possible for us to connect with every employee and learn all about them. But a small shift from leading to coaching is going to help to connect with the people who are working for the company. 

And this is why rather than shoving all the employees in the same room in the name of the employee meeting, I approached the matter differently. 

I found out that one on one meetings work the best when it comes to connecting with the employees. It is through asking well thought out and open-ended question the employees would be able to talk about their issues openly, expressing ideas and opinions that they think can be important to the company.

Entrepreneurs often set lofty goals and ideals

It is a natural thing to set bigger and better goals as the startup succeeds. All of us are given to set lofty goals and ideas as we realize that our small startup is slowly becoming a bigger company and it needs bigger goals, this, however, has its own consequences. 

For example, we can look at the history of the rise and fall of Powa, a U.K. based ambitious startup company specializing in technology. It has been said that the company stands as a prime example of how to NOT run a company. The CEO of Powa Dan Wagner failed as a CEO because all he gave his company is confused management, exaggerated claims about their goals and an irresponsible attitude with money. 

The main downfall with Powa happened when Dan Wagner made exaggerated claims about their deals with China UnionPay. And this explains to us how setting up lofty goals can actually do our businesses more harm than benefit. 

As a strong believer in the theory that the company goals should match the growth of the company, I don’t really see the point of setting up the goals of changing the market with the visionary ideas of the startup. Making sure that the initial goals of the startup are realistic, milestone-based goals will make the employees believe that they are actually working towards something concrete and achievable, rather than something too unachievable. 

More often than not these lofty goals are actually the result of ego and hubris, the exaggerated belief in the company’s ability to scale. Taking on too much pressure is a fatal mistake any CEO can make. And that is exactly why rather than setting high and mighty goals, I recommend setting up a small, yet realistic goals that my employees could actually see themselves achieving. 

Some entrepreneurs are unable to grow as a leader

Starting a business is wildly different than running an established one. It’s mostly because we don’t really need a lot of knowledge and experience to start a business. But as the business starts to grow, we also need to grow as leaders. 
 
Along with the inability to grow as a leader, what can hurt the company’s growth, even more, is the unwillingness to accept it and hire the right help. There are many examples in the market where the startup owners who are confused about a certain aspect of the business, yet do not accept the most obvious solution to the problem, which is to hire the right person to deal with the problem. 

It is not possible for us to become the jack of all trades, let alone the master of it all. There are some areas of a growing business we can learn about but ultimately we have to go ahead and start hiring the right experts. 

Accepting limitations and letting an expert take the lead in a specific area of managing the business is the most emotionally intelligent decision a CEO can take. I have observed many budding CEOs who are always under the impression that since they have built this thriving business, they can micromanage all aspects of it without any experience. It is a toxic mentality to have which eventually prevents the business from scaling

Entrepreneurs haven't recognized and trained the right leaders

If there is one thing that I’ve realized is the importance of selecting the right lower-level managers, especially when the company is going through that transition from startup to a big company.

These managerial positions are going to hold the fort when the CEO has to be away. Of course, when the company started to grow I realized that I can not deal with every task required to run a company. I had to hire the right candidates to do the right jobs.

Evaluating the potential leaders and training them properly is more important than it might seem at the beginning. It is crucial in order to create a strong leadership structure for the growing company. I had to make sure to judge these future managers of my company based on their emotional intelligence, how invested they are in my company and how well they could guide the other employees. 

Failing to choose the right candidate for these tasks can really hamper the growth of the startup. They are the ones who are going to be in direct contact with the rest of the employees, clients and everyone else related to the company. Without proper skills, they would fail to boost company growth. 

And that’s why I invested in proper leadership training for the candidates I chose for the important managerial position in my company. This training helped them to understand the responsibility they were going to take on and be well prepared for it. 

The skill of meaningful communication is to be prioritized during leadership training. As the company grew, I was not able to sit down one on one with all the employees of the company, so this communication training made sure that the employees could communicate and talk to the people in the management position. Investing in the leadership position will not only make sure that they understand the requirements of their job, but they also learn the powerful method of communicating with both the clients and the lower-level employees of the company.

At the end of the day, creating a powerful and long-lasting leadership structure is all about being present. It is the duty of the CEO and startup owner to know about what is going on with the company and how to deal with the challenges it is facing. However, if anyone finds themselves to be lacking in the right skill, they should definitely put themselves through the previously mentioned leadership training. Strong leadership is the base on which a scalable startup is built, and the owner should do everything to provide their business with it.

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Pratip Biswas
Pratip Biswas
See Pratip Biswas's Profile
In the last 18 years, I have built a successful technology venture, Unified Infotech, which is now a team of 150+ full-time employees, supporting 350+ startups, Fortune 500 companies, and Enterprises globally. I have helped entrepreneurs launch incredible tech products and get investments.
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