Founders flounder, as the saying goes, and scaling up is much harder than starting up.
At TechCXO, we’ve worked with hundreds of startups and see ample evidence to support these truisms, but must the cratering of a startup be the rule?
While startups can draw on pure entrepreneurial energy, creativity, tenacity and downright heroism to start a business, it’s also true that the initial force of will to get started eventually dissipates and new momentum must be created and properly applied to grow a business and refine a viable business model.
In his seminal Harvard Business Review article, “Why Entrepreneurs Don’t Scale,” John Hamm, wondered if there is there an “entrepreneurial personality” and an “executive personality” that are naturally at odds.
He didn’t see that there was, and neither do we. The problem to meeting the scaling challenge are tendencies entrepreneurs frequently display. Hamm sees them as excessive loyalty to early teams; task orientation; single-mindedness/tunnel vision; and working in isolation.
We define the common barriers a little differently and place them in these buckets:
PEOPLE — This materializes as putting the wrong people in the wrong seat or dysfunction due to lack of role clarity and accountability.
PROFIT —In the form of cash crunch/cash management issues, margin squeeze, and inappropriate responses to shifting markets.
CONTROL — Time wasted in issue discussion and inertia, misalignment and siloed behavior.
TRACTION— It’s been said, “implementation without vision is hallucination” and endless, tactical focus on putting out fires verses discipline, repeatable, effective process is a scaling killer.
Growth, then, is the only option. Where to start?
We have found that the initial focus on internal processes actually allow the company to grow faster externally. By taking some time to step back and focus ON the business rather than being buried IN the business, the leadership team can break through to new levels. We’ve operationalized this with an adaptation of the Entrepreneur Operating System. By focusing on 5 key elements and putting them in the context of their business, they can improve execution:
5 Key Elements to Scaling
- SIMPLIFY—If one can simplify process, procedure, level 10 meetings, and reporting, new checklists become part of the DNA focused on results.
- DELEGATE—Building enough trust to speak openly and establishing a learning culture will allow leaders to “delegate and elevate” embedding growth for succession
- PREDICT— Breaking down goals and information into manageable quarterly pulse helps to frame trends and targets for 1 year, 3 year 10 year blocks.
- SYSTEMATIZE—By identifying and documenting the core process you will then be able to integrate them to leverage your unique way of doing business.
- STRUCTURE—Creating accountability and reducing complexity can be done by clearly defining critical roles and the assigning a number that represents or drives their output can improve the coordinated contribution of everyone. We’ve seen this come to fruiting with legendary coach Bill Belichick’s frequent admonition: “Do your job.”
Often leaders and their teams are pushing ahead in completely different directions. When growth stalls, they may have lost momentum unwillingly by not having the adequate systems, process, or org structure to even know where to start to ‘optimize for growth’.
Just imagine the energy if all of the arrows are pointed in the same direction. To accomplish this, we help companies implement a TechCXO Operating System using the tools of EOS. With over 5,000 companies worldwide using EOS, it is now clear to the TechCXO consultants that those companies that have moved from just running fast to cohesive management teams now have the competitive advantage to win. In The Advantage Patrick Lencioni confirms “Organizational health will one day surpass all other disciplines in business as the greatest opportunity for improvement and competitive advantage—it is the single greatest factor in determining an organization’s success.”
Those who are able to break through the ceiling have built a cohesive leadership team, agreed on core issues solved problems, and been open enough to get the right people in the right seats. The ability to shift from stopping to scaling up is both a mindset and a discipline.
To work on the six key ingredients of business– vision, people, data, process, issues, traction—the CEO or president should be at the table with his or her leadership team. A TechCXO experienced leaders serves as an implementer who provides education, facilitation and coaching. A third party voice can help with course correction and progress.
It takes commitment, but those who want to can catapult their organization to greater profits, productivity and traction.