Navigating Common Growth Problems
The leadership edition
👋 Hello! This is Suzan. I write essays about leadership and interview leaders from tech companies like Etsy, Github, Google, Netflix, and Spotify who share their insights on how they overcame a challenge.
This post is aimed at founders, CEOs and COOs entering a growth phase though leaders at startups might find it useful as a peak down the road. Today’s focus is on the the leadership layer. If you’re interested in scaling decision making, this post might interest you or this interview with James Trunk.
Dear CEO,
You’re making an organizational shift, catalyzed by market conditions, the evolution of your business or reaching an important milestone. Getting a business to this point can take herculean effort, this is a tremendous accomplishment.
Along with the success come new wrinkles — new problems to solve. While there are many things to think about, I want to focus on organizational matters at the leadership layer.
As you enter a growth phase, there are more people around the table, communication becomes harder, and you need new areas of expertise. You know the org needs to change, it’s the what, how and when that can trip us up. Here are a few things to look out for.
Be mindful when adding leadership layers
As you grow, leaders’ workloads become untenable. More support is needed, especially those who can carry out and translate strategy. This often means adding VP, Director and/or Head of roles. While more leaders are needed, extra layers create more distance between the CEO and the rest of the team. It also creates more distance between the leadership team and the people doing the work. Finally, more levels adds more complexity and bureaucracy which slow you down. While adding a layer is likely inevitable, be mindful of how many you add. Go slowly, keeping the org as flat as you can, adding only when necessary.
Be wary of becoming too top heavy
There are two common reasons this happens.
1) Our new business strategy means we need to hire people with different expertise which often means adding folks at the exec level. Knowing which roles to add to the leadership team isn’t always straight forward.
2) Orgs can get too top heavy when the CEO is having a hard time keeping up and their role needs to change. This is normal at this phase. It’s tempting to add someone between the CEO and the rest of the leadership team like a Managing Director, COO or President. This extra layer creates more distance from the rest of the leadership team. You may have less work, you also get less information about what’s going on.
If you’re feeling the crunch as a CEO, look for things to give away to others. You may also consider whether you need to reduce the size of the leadership team. Knowing who should be on that team and who should report to the CEO is tricky but it’s worthwhile to give it a good look.
Build your leadership pipeline
While you need to be careful not to add too many layers too fast, you do want to pay attention to having a robust leadership pipeline. As the org evolves, leaders will naturally leave — they want new challenges, they’re no longer a fit for the role or any host of reasons. This is part of the business cycle. Don’t worry about it, plan for it. While you can, and will hire some new leaders, you’ll also want to promote from within. Here’s why: they have institutional knowledge, come in with a built-in trust bank, and because it demonstrates there’s room to progress at the company. Keep your eye out for emerging leaders and be conscious about building their capacity.
Consciously craft a leadership culture
Cohesion is critical for this next phase. A leadership team that’s a cohesive unit is far more productive than a collection of individuals — there’s less friction, goals and OKRs are better aligned and conversations are productive.
Leadership teams have their own culture. These cultures can run the gamut: fear-based, competitive, supportive, driven, transparent, curious, innovative, etc. There isn’t necessarily a “right” culture for your team — it really depends on the industry, business model, mission, historical org context and people on the team. The key is to be conscious about the kind of culture that creates the kind of environment that allows you to achieve your goals.
At this phase you’ve probably changed out or added at least one or two leaders. This is a great time to draw your team into a cohesive unit at next offsite. Then plan for how you’ll maintain that culture.
What’s next
Chaos reigns at startups. To suceed at growth, order is needed. It’s a matter of how much, how fast and where. Be mindful of how you tame the chaos.
Shifts in businesses phases are funky times. They require that we go through them in a conscious way. Make changes slowly. Think of these changes as experiments. Listen across the org after making a change. Don’t be afraid to make tweaks — iterating is extremely common at this phase.
You’ve got this,
Suzan
P.S. If you want to learn how I can help your team navigate common growth patterns grab a spot on my calendar or read more about my work.