How are you scaling up as a CEO
In the past few weeks, I’ve had in-depth conversations with startup CEOs who have led companies from the very earliest stage of proving the business has a right to exist, to being well funded, to now needing to demonstrate they can scale profitably. One recurring theme I hear from CEOs is that it is incredibly challenging to adapt their leadership styles, and mindsets, as the company grows. The type of CEO mindset that is best for an early, scrappy startup is very different from the one needed to scale up an established, growing company. Most great CEOs bring vision, smarts, charisma, and a strong work ethic to starting their businesses, but what needs to change for a CEO to take a company to the next level?
Below are the five key questions we discussed with our CEOs, which can help any founder evolve his or her leadership approach to better support a scaling, high-growth company.
1. How willing are you to let go of control?
All startup founder CEOs see themselves as builders. But to scale your company, you need to step away and become the General. As an early stage CEO, everyone wants a slice of you: customers, employees, investors, and the media.
You’re constantly grinding, making sure you’re “always on” for these audiences, while also acting as a source of inspiration and example for your team. It’s exhausting, and it is not a sustainable approach to maintain when your company has moved into grow-and-scale mode.
The best CEOs in this stage adopt the mindset of a General: delegate to accelerate. It’s hard. You don’t want to lower your standards and you still feel like you’re the best person in the room to fix the problem. As your business grows and you bring more people in, your role shifts away from the hands-on CEO of your startup days to that of a strategic planner and decision-maker. Loosen your grip on the reins of control and trust others to get the job done; lean into the “executive” part of the CEO title. When you do that, you will grow both strategically and emotionally. And so, will your company.
The best CEOs in this stage adopt the mindset of a General: delegate to accelerate
2. How comfortable are you saying, “I don’t know”?
Scaling your business requires a new set of skills. Are you an expert in developing three-year strategic plans, entering new markets, developing go-to-market strategies, managing multiple investors, seeking alternate sources of capital or organizational design? As your company grows, the variety of skillsets needed will also multiply and you will increasingly find yourself dealing with areas you are learning about for the first time. It’s ok to say “I don’t know” and ask for help.
CEOs don’t need to be the smartest person in the room — they need to have the smartest people around them. This can be a very hard shift for CEOs to make. Many want to present a bulletproof image or pride themselves on being the best idea generators/problem solvers, and that ends up stunting the growth of the entire organization. This is one reason why B Capital Group built an in-house platform team focused on strategic and operational advisory: to provide hands-on guidance in specialty areas where startup CEOs and their management teams have limited knowledge or expertise, and help our portfolio CEOs hire the smartest, most seasoned executive talent available.
3. How important is empathy to you?
As the CEO, you lead through your values. Empathy unlocks desired outcomes. One of the best CEOs I’m currently working with said to me, “I was emotionally arrogant and unavailable, and it nearly cost me my business.” Saying that out aloud took real strength and maturity. But admitting that to his team, and focusing on being more empathetic, did wonders for his company. Internal meetings went from feeling like barbarians were storming the gates to having open conversations that were outcome-based. Whenever conflict started getting emotional and personal, people showed the courage to confront the situation and resolve it.
This didn’t happen overnight, but it was a sign that the business and culture were maturing. No, the empathy this CEO and company shows to employees and customers has motivated these stakeholders to go above and beyond to help the business grow, at a time when other companies are fighting just to survive.
Empathy unlocks desired outcomes
4. How much time are you spending with your co-founders NOT talking about work?
If you’re a CEO, ask yourself: when was the last time I had a two-hour dinner with my co-founders that wasn’t a working session? If you haven’t in the past month, schedule it now.
CEOs often don’t allow themselves enough time to reflect and create space for the things that are not urgent, yet extremely important. A non-business dinner gives you all the opportunity to talk about the business in general, but also talk about sports, families, your personal lives, or whatever else is going on. Just sit there and have a conversation between friends, like you probably used to do before the hectic early days of running a company.
These conversations are critical to the evolution of your leadership team because they give you a chance to remind yourself why this business is so important to you and why you’ve chosen to build it with one another. In his book, The Founder’s Dilemma, Harvard professor Noam Wasserman studied 10,000 founders and learned that “65% of high-potential startups fail as a result of conflict among co-founders.” Constantly dismissing small issues can be dangerous. “Oh, it’s nothing. Don’t worry about it.” Relationships end when all the small conflicts build up over time to a point where it becomes impossible to align and a relationship can no longer be salvaged. Your company started with you and your co-founders and you need to invest in that relationship to realise your company’s mission.
“65% of high potential startups fail as a result of conflict among co-founders.” — Noam Wasserman
5. Will your team go the extra mile for you?
Your team will go the extra mile for you when they know and believe in you. Does your team know the real you? Try this: next time someone asks you to introduce yourself, instead of your name and title, say your name and two things that they might not know about you. It will generate a discussion and help others understand who you really are and what drives you.
As a CEO, you set the tone of the company. Being relatable is important, and you should be aware of which different parts of your personality are most accessible to different people in the organization. We’ve all been to those awkward happy hours or team lunches where everyone is present, but no one talks about anything substantial. As the CEO, you need to be the first person to open up. Showing all sides of yourself requires some vulnerability but will generate enormous faith and confidence in your leadership. When you choose to let your guard down and allow your team to see you as a person they know and can trust, you increase the likelihood that they will go the extra mile for you and the business when things get tough.
Scaling up as a CEO is a unique experience
As your business grows, your role as the CEO must continue to evolve. This is a lifelong journey of learning, reflecting, and building yourself and your organization, and to become more of who you already are and who you have the potential to be. Enjoy and embrace it.
At B Capital we are more than just investors. We recognise that scaling up your business is a unique experience. It’s not one size fits all. We are a lot more hands-on with our portfolio companies to find the best path to expand their businesses. One way we support our CEOs is access to mentors, coaches, and peer groups to help them prepare strategically, mentally, and emotionally. This article is part of a series from our B Circles CEO peer learning group facilitated by PERSONNA.