What do Leaders need to do to Scale-Up a Company?
This article will take you about 4 minutes to read
In this article, I am going to focus on leadership — specifically, what it means in the context of scaling-up a business.
The definition of good leadership is unclear. Most of the time it gets confused with ‘positional authority’ — just because someone is at the top, doesn’t automatically mean they’re a good leader.
This makes it hard for people to understand the value of good leadership — and even harder to buy a service which will improve the performance of their leaders.
Good leaders align people behind a common aim. They build strong relationships and engage their people. The effect of their behaviour has a measured impact on the performance of the business.
The best leaders create a legacy of high performance, which outlasts their time in the business. They build systems that create a culture of continuous improvement.
Companies that are well led are able to innovate faster and do more with less — they don’t just outperform their competitors, they demolish them.
So, how do we achieve this in a rapidly growing organisation?
I am going to highlight three things that leaders must do if they want to increase headcount and scale-up the business.
The foundations set the context for success. These three elements must be set early in the growth journey. They provide the framework for the decisions you will make in the future. Getting them right at the start will save you a great deal of time down the road.
A Reason Why
There needs to be a reason why the business exists. It needs to make people feel something. If your reason to exist is ‘to provide excellent customer service and return for your shareholders’ you have not taken the conversation far enough. This reason does not engage people or get them to deliver discretionary effort.
The reason why needs to relate to ‘making the world a better place’ in some way. If you get this right, you will attract the sort of people who are excited by your cause and willing to push themselves in pursuit of it.
What do we do and who do we do it for? This needs to be so clear that it can be summarised in one simple sentence that can be relayed by everyone in organisation. In this instance — less is more.
If you think you have this right — ask five people in your business. If they give you the same answer, you’ve got it. If they don’t, you haven’t.
Where do we want to go? What does success look like? How will we know when we have made it?
The vision is a statement of what the future will look like once we have achieved our aims. It tells everyone where we are going. I have written about visions before, specifically, the importance of creating a nine-year vision which tells everyone where we are going. See Creating a Vision for more information.
Values and KPIs
The foundations lead to the creation of your organisational values (or behaviours). These set the standards for how the leaders behave.
You lead by example — it is up to you whether it is a good example or a bad one.
Your professional standards and how you behave are being assessed from the moment you walk into the office. It is worth making it clear ‘what the right behaviours are’ because they’re rarely obvious.
The foundations also lead to the creation of your key performance indicators (KPIs). Most companies focus on the ‘lagging KPIs’. These are historical such as revenue and net profit etc.
What are the ‘leading KPIs?’ The ones that dictate our behaviour in the future and have an impact on how we plan.
For example, a leading KPI for a sales manager might be ‘how many new people did he meet this week?’ Out of these new people, how many expressed real enthusiasm for what he was offering vs. polite interest?’
These are two examples of leading KPIs. If the sales manager focuses on these, he will improve the performance of the business by increasing his sales.
Make Performance Visible
In a manufacturing organisation, it is easy to see how the business is performing. There is an assembly line that is making things. If the line gets interrupted, you know it will have an impact on your figures. It makes it easy to spot bottlenecks and problems because you can see them on ‘the line’.
In a service organisation, there is no assembly line. This makes it harder to see how we are performing and where the bottlenecks and problems are.
If you can make the performance visible — it will make a significant difference to how your organisation performs because you can focus on the areas that are having an impact on your performance.
Get a whiteboard up in the centre of the office — work out what everyone is working on and when it is due by and put a red, amber or green status next to it. This will make it much easier for leaders to divert their attention to areas that need support.
How often do you talk about performance?
Monthly? Weekly? If you talk about performance monthly, you’re having 12 conversations about performance every year. That is not enough.
A daily 15-minute brief is better than a 1-hour meeting monthly or even weekly. A short, sharp brief with everyone standing and focussed on short-term daily tasks means we get real clarity on ‘who is doing what today’.
This drives a faster decision-making cycle and makes it easier to spot when you are starting to go off-course. Agile project management uses this approach and it is far more effective than traditional types of PM.
Standards make it clear ‘what good looks like’. How can you train or develop anyone if you haven’t made it clear how to do something?
If you don’t have clear standards, you will have inconsistent performance. People hate inconsistency and it will damage the reputation of your business.
If I go to Starbucks and order a mocha, I will get the same drink if I go to a Starbucks in London or Bristol. The person making the coffee doesn’t decide ‘what good looks like’ and make me their interpretation of a mocha — they make me a Starbucks mocha in accordance with their standard. I like their standard and I know every time I go there, I get the same product.
Some people don’t believe that this applies to creative industries. Go to the Netflix website and download their ‘culture slide deck’. This is an example of a standard. They have standardised their culture in a creative industry. They have made it clear ‘what good looks like’ so that they attract the type of people who want to work in their organisation.
Transparency and Consistency are vital to business.
Say what you are going to do and then do it — to the same standard every time. If you fail on either of these, you’ll create a ‘dislocation of expectation’ with your customers.
There are plenty of other things that leaders need to do in order to scale-up a business but I believe that these are the most important.
Set the foundations — create a reason why, a mission and a vision.
Measure the right things — create some leading KPIs.
Standardise — what does ‘good’ look like?
If you’re able to implement these, you will go a long way to limiting the impact of the ‘growing pains’ that will occur as you scale-up the business and increase the number of people in the organisation.
The elements I’ve written about above are part of our systems-based approach to leadership.
Traditional leadership development programmes focus on improving the capability of one person — the leader. This is part of the process but it is not the end-state because any benefits go out the door when that person leaves the company.
Leaders are (or should be) measured on the performance of their people.
We have created a system that makes it easy for people to lead and create high-performing organisations. We focus on improving the capability of the whole team instead of one individual. This is why we are able to generate such enormous savings in capacity — typically a day per week per person — sometimes more.
Our changes remain long after we have gone because we change the behaviour of your people — and this is the only way to create a truly high performing organisation.