You’re Scaling all Wrong! Why Leadership Debt Can Kill your 10x Growth!
Note: The models presented briefly in this article are taken directly from my book Evolving Digital Leadership, Apress, 2018. More information can be found here: https://evolvingdigitalleadership.com/
The Problem with Growth Hacking
10x Growth, Growth Hacking, Scaling, Hyper Growth… These are the goals and language of founders and leaders in today’s digital ecosystem. Every organisation needs a solid, sustainable customer base and market penetration/share to be successful. However, all too often founders and CEO’s ONLY focus on scaling the tech platforms to support this growth, at best paying only lip service to the culture and leadership required to support it. Whilst, it is possible and in some cases necessary (because of limited resources) to only target the development and refactoring of the core tech, the leadership debt that occurs over time, impacts organisational performance in such a significant manner that at some point more time is invested in culture change, process change, practice change etc. than is in developing new customer features and offerings (see figure 1).
When leadership debt reaches a certain level, productivity breaks down, culture breaks down, employees disengage, and attrition levels rise sharply. If left unchecked, this situation can lead to an inability to get anything done and hire new talent (who wants to work in a toxic culture?) and thus the reverse of growth happens as the organisation’s offerings in market stagnate and reduce in quality, leading to a 10x shrinkage! (see Figure 2)
Focusing only on technology to achieve 10x growth can, over time lead to a 10x shrink and the demise of the organisation when leadership capability is ignored.
Hockey stick growth is beautiful and dangerous! Throwing more people into the mix to deliver more product can cause more harm than good. All too often as capability is scaled, star performers are promoted to lead delivery teams. In some cases, this works well, in others promoting someone to lead people because they are great at delivering technology is akin to promoting a formula 1 race car engineer to drive the race car. The two roles are fundamentally different. Being good at delivering great tech is not a precursor to being a great people leader.
The shift from technical expert to people leader involves a number of key transitions, where the focus shifts from building of technology, to the processes used to deliver (think Continuous Delivery, Design Thinking etc.) and lastly a complete shift in the personal definition of success, as we focus on building teams and growing individuals. (figure 3)
When a leader is promoted to a new role without guidance, support and training their transition is usually a difficult and uncomfortable one for both them and their team. My research showed that people who make this transition well, have either had early leadership training and support and/ or held leadership roles in their childhood (either as sports team captains, or community leadership roles.)
For a subset of leaders, the anxiety and discomfort with their new leadership roles are sufficient enough to cause them to resign and take on new delivery roles at other companies. The organisation then loses key talent and knowledge through lack of support of these new leaders. When left un-supported, an unfortunate number of individuals repeat this pattern more than once, following what I call The Sawtooth Resignation pattern as shown in figure 4. Not only is this a highly inefficient way for an organisation to operate (constantly losing talent and knowledge), more importantly, it is a stressful and difficult experience for the individual, who with more support could have had the ability to become a great technology leader.
Scaling leadership has two components 1) The growth and support of new leaders under your direction and 2) The growth and scale of your own leadership.
The growth and support of new leaders, requires an investment, just like the scaling of a tech platform. Irrespective of whether you got supported as a new leader, the chances of your new leaders succeeding are dramatically improved if you invest the time and energy in guiding, growing and training your leaders. Helping them to make the transitions from technology to people and to understand what it means to be a high-performance digital leader.
A tool I use in supporting the growth of digital leaders is the Digital Situational Leadership model (see figure 5)
This model takes the rather fluffy and confusing domain of digital leadership and codifies and model that allows new (and existing leaders) to understand what is required for success. The model is based on my definition of success for a digital leader which is:
Success for a digital leader involves building a motivated, high-performance capability that tactically and strategically delivers value to customers in a sustainable way.
All four modes are essential to success and all are dangerous if we spend too much time locked in one. Digital situational leadership requires leaders to understand the current situation and maintain agility to move around the four modes as required. In a particular meeting of stakeholders, ultimate success may mean navigating all four modes over the space of an hour. In another scenario, say a one-on-one meeting, it may mean sitting singularly in one particular mode and focusing our frames and conversation around that. We may find ourselves in situations where it’s not clear which mode is appropriate; in that instance, it’s useful to try on a mode and ask questions related to it. For instance, stepping
into the Futurist role could mean asking about future tech trends and their impact on what’s being discussed.
Becoming aware of this model and discussing it with your new leaders facilitates a new awareness and clarity of leadership. There are two powerful questions that you can ask your leaders and indeed yourself in order to develop your digital situational leadership agility, and they are:
- Which of the four modes of operation is your preferred mode and why?
- Which mode do use least and why?
Scaling your own leadership
Scaling to 10x and achieving market share, requires a shift in your own leadership operation. It’s likely that you know more about the organization: its vision, it’s products, it’s customers than your people do — if you keep it that way you will burn out and kill the growth of the organization that you are striving for. Scaling your leadership involves being aware of larger perspectives, the bigger picture and usually longer timeframes (being more strategic) than you are used to. All too often founders and early leaders don’t scale at the rate of the organization does and as such, they become the bottleneck to growth they strive for.
More often than not, your leadership operation will need to shift and develop the deeper capacities of the Futurist and the Utopian simultaneously. In these leadership modes, you should be spending more and more time looking farther into the future, at industry and technology trends at international and multi-year horizons AND taking steps to build a sustainable, high-performance culture.
Remember: To achieve sustainable 10x growth, you must scale both your technology systems AND your digital leadership.