Why fast-track leaders lose their mojo, and how to gain it back
Congratulations! Your company made Inc. magazine’s 500/5000 list of fastest-growing companies.
The invitation to go to the grand induction ceremony is on your desk. Your baby, Rocket Inc., is now on the map. Local papers have printed the announcement on the front page. The phone has been ringing off the hook from potential investors.
Wooohoooo!!! You, the founder/executive/ CEO/leader, made it into this fast-track exclusive club. What could be better?
So…….Why do you feel like a phony as you cut the celebratory cake? Where is your elation of the accomplishment? Why are you engulfed with fear that the whole facade will come crashing down and hit the dirt?
You know and the statistics show that fast growth generates a myriad of new problems. The fast road to success is not littered with rose petals alone — there are many, many thorns embedded in between.
Founders/executives/leaders of most fast-growing companies are inadequately prepared for the many financial, operational and personal risks that pop up and become killjoys. I can safely bet that you relate to at least a few, if not many, of the following:
Risks that rob your mojo
Cash flow crunch. The ebb and flow of cash in and cash out gets extremely complicated. Fast-growing startups burn money for years before generating positive cash flow. Your monthly expenses may exceed the inflow. A common scenario is exceeding your credit line and suddenly one bad sales month spells disaster.
Turnover. You funded the last few cash flow shortages by postponing payment of your salary and that of some of the other senior team members.
Some of the employees, including your right-hand people, are polishing their resumes. Contractors and suppliers are threatening to stop providing products/services and may actually follow through.
Need to spend to become a big company. Your team is pushing for more robust processes and equipment to deal with the present load and the growth trajectory. All this requires cash, but cash is scarce.
Finding good investors. Those who can partner with you and be supportive to help you grow and prosper. They exist but, where are they? How do you screen them?
Sometimes, smelling blood in the water, what you are getting are offerings laced with crazy conditions. These predators-masquerading-as-investors want their pound of flesh even if the venture fails. You want to say “no.” Are you in a position to say no?
Investor relations is cutting into `productive’ effort. You had collected enough investment dollars to tide you over the erratic cash flows. You are now indebted to many people who demand your time whenever a thought occurs to them.
Every week, new cash flow projections have to be prepared in “their” format, not the one you winged last week. When do you do real business?
Trying to race a VW Beetle at the speed of a Ferrari. VCs have invested big money in you to grow fast and become a “unicorn.” You have to keep going faster and faster. The more you speed up, the more is required from you. Where is that money coming from?
Operations and customer service problems. When you started everyone and anyone could handle all aspects of the business. The processes were simple and one-person-smooth. Now you have silos, and the left hand does not know what the right does.
Meanwhile, the internal team is praying for a slowdown so that they can catch their breath. You can already hear the stress level and petty fights in the voices of customers and employees.
Over-reliance on early customers. The growth that put you on the map was from the few early customers. They know it and are continuing to tighten the screws. In order to be successful, you are now trying to diversify your product line, expand geography, and increase margins.
The early customers are not agreeing to change to the new programs. Do you let them go or continue to serve them as a loss leader?
Star salespeople bomb out. To keep up with ever-expanding sales requirements you hire many new salespeople. They were stars in their previous positions. In your venture, a good percent cannot deliver for many months.
They incur costs of on-boarding, training, travel and any “guaranteed” bonuses. The costs pile up. However, sales are a promise in the future.
Responsibility for the entire value chain. You meet the family of your team members in the company picnic. You smile dutifully but cringe inside at the thought of how many people are dependent on you.
You worry about everyone in the complex value chain of suppliers, customers, business partners, and stakeholders. You must keep them engaged and successful. The burden of the entire chain is on you.
I could go on, but you get the idea. Passion, what passion? This was your dream, your energizer. What happened? Your enthusiasm is waning. You are killing yourself physically, mentally and emotionally.
You question whether all this insane effort was worth the physical and emotional pain. How are the problems of rapid growth better than those when you had little growth?
Growth risk is an important issue. It is equally as relevant as economic downturns or technology obsolescence. Those issues are also on your mind While others celebrate the growth of your company, many organizational, professional and personal issues have formed a twisted rope that is slowly strangling you.
You were dreaming of a smooth upward curve, like the one you saw in the PR documents of winning companies. Instead, you are riding a scary roller coaster of evolution and revolution. These are strewn with risks that ebb and flow and are constantly changing. You are bogged down and losing your mojo. You cry out, “I need help!”
You are definitely not alone. I have been there. I have felt that. My last company was in the Inc. 500/5000 for five years in a row. At one time or another, I have felt the pain and agony of many of these issues and more.
Don’t despair, you are not alone. There are many groups in your area that can help you and share some of this burden with you. In hindsight, I wish I had made use of that resource when I was struggling with these very issues while building a fast-track company.
Who can help?
Your team: It is their role to do a good job and tackle problems. You have hired very carefully.
Board of directors: It is their fiduciary responsibility to look after the interests of the stakeholders, particularly the shareholders.
Board of advisers: It is their duty to be the domain experts and augment the skills of the team.
Investors: They invested in you because of the past rapid growth. They can provide casual, often contradictory advice.
Professional service providers (accountants, lawyers, etc.): For a fee, they provide services in their area of expertise.
Consultants: They are hired for a specific service that may be needed. They are the domain experts.
Mentors: Your mentors can provide objective feedback and support.
Trade groups: They provide industry-specific non-competitive information and lobbying services on behalf of all members.
These are all the people who can help you shoulder some of the tasks to do it right, outsource your load, and reduce the risks associated with growth.
You are already familiar with these resources and are taking advantage of their help and counsel to lighten your load. And yet, your problem persists.
The intense and convoluted nature of issues faced uniquely by the CEOs of a fast-growing enterprise is not fully tackled by all of these supporters.
The cry for help remains muffled inside. You cannot bring many of your issues to anyone in these groups. You are the boss, after all. You have to appear not just strong, but also invincible. Many of your issues either remain unresolved or are sub-optimized.
As you set out to change the world and your biggest home run is yet to be hit, you may have an unsettled feeling that there are even more problems coming ahead. And, you are stuck as it is. What about what is around the corner?
It is very lonely at the top. Help!
A higher resource
The biggest challenge is your lack of connections with people who are in a similar situation and through grit and trial may have made inroads on some of the very issues that are causing you lack of sleep. In turn, you may have ideas for them.
It behooves you to consider an additional, often neglected, source of help.
A peer group of CEOs can make the most impact on you and your business for tackling the issues that you face. Each group is purpose-built to help members help each other mitigate risks and improve performance and outcomes of their businesses.
The peer group can help you move from fear-based and response management to purpose-driven leadership. The members are selected so that they are not competing with you. They have no ax to grind. They can be truthful, however harsh it may seem at first. They are there for you and the group’s welfare.
The rapid pace of growth creates a certain emptiness in the leader. A peer group of CEOs has the capability of filling that emptiness with renewed potential. Such a group can help you get your mojo back like no other group can.
I am presenting this bald advocacy because I wish I had made use of this resource when I was struggling with these very issues while building a fast-growing company. You can take advantage of my hindsight.
A peer group defined
A peer group of CEOs rests on a solid premise. It comprises of ambitious and hard-working leaders who are committed to helping every member of the group continued success through shared experiences and mutual support. If you decide to add such a peer group to your mix of support, here are a few things to look out for:
Leaders only: The peer group is made up of leaders of companies. All of them are founders, presidents, CEOs and business owners.
As equals, they can openly discuss and support each other with strategies that enhance personal life and personal freedom while continuing sustainable growth and profits.
Empathy: Group members are more likely to understand and empathize with your life and work situation because they are all in a very similar situation.
Non-competitive: The members are selected so they belong to non-competitive businesses. Without that assurance, you may be reluctant to divulge critical details or ask for help. Non-competitive selection allows the discussion to be free and open and gives the chance for members to be honest and vulnerable.
Community: You are part of a community — a network of similar executives who want to grow their business and manage risks, just like you. The group members help each other gain perspectives, break down walls, and look beyond in creative ways.
Often you are not aware of your own blind spots. The other members shine a light on it. In group interaction, the members should be able to challenge and are comfortable in being challenged to take their business and personal life to the next level.
Diversity with commonality: The leaders share some degree of commonality in size and/or stage of evolution (homogeneous) and are different in other sets of skills or domains (heterogeneous). This homogeneous/heterogeneous combination makes it ideal to connect with the group. Such a group can provide an even and immediate exchange of benefits while being totally non-competitive and agenda-free.
Goal: In spite of the many benefits of a social organization, the peer group of CEOs should not primarily be a social organization. Its agenda is for business and personal development. The collective goal is to turn each other’s “What to do???” into “What to do.” Moreover, the group holds you responsible that you do it.
Psychic benefit: In addition to getting help for you, an additional bonus is an immeasurable fulfillment of helping other fellow leaders with your own experience and insights.
Role of a facilitator
With or without a facilitator, a group of leaders of fast-growing companies in one room presents enormous potential. However, with a competent facilitator leading them, it can add several key benefits to the dynamics.
Dedication: Facilitators are, often accomplished, individuals in their own right and are dedicated to increasing the effectiveness and enhancing the lives of fellow leaders. They have the capability of counsel because they have walked the walk. Their raison d’être is for the members to achieve personal and organizational results.
Curb the competitive streak: High-powered leaders are used to their lofty stature and may find it difficult to control their competitive streak. They are all soaring eagles, after all. Empathetic listening is not necessarily their strong suit. Without a facilitator, group dynamics can be dodgy, as in any unsupervised activity. It is the facilitator’s role to streamline the process, guide the personalities, and enable the best outcome to emerge in the group.
Wear many hats: The facilitator is an accomplished leader who has traversed this journey before. (S)he can wear different hats with the group. The facilitator is a coach, adviser and mentor rolled in one and someone totally committed to your success.
Thinking outside the box: A facilitator can dig down into the issue with the members so that they can start to look beyond their own comfort zone. This is where the magic happens — and start to explore areas of solutions that they may have never thought of before. That could be more illuminating and transformative than anything else they’ve done before.
Extract all the juice: A facilitator who moderates the group, and is not part of the group, can stimulate thinking, frame issues, guide discussions, keep the process on track, limit tangents, and ensure accountability in the group. Their role is to ensure that every bit of the experience and wisdom is developed, shared and applied.
Expand the moment: Discussions can get passionate and even heated before the Aha! moment for you. The facilitator can expand that precious moment to make it a broader learning for the entire group.
Complementary content: Based upon the need of the group, the facilitator can call in additional resources for learning and proven ideas.
Selecting the right members: The most important role of a facilitator is to select the right members for the group. Groups work best when the members have something to learn from the other members and they, in turn, can reciprocate with similar contributions.
Maintaining confidentiality is paramount. A dysfunctional member can dampen it for all members. The facilitator may ask a member to leave if that member is deemed not to be a good fit for the group.
A facilitated peer group of leaders, made up of fast-growing companies, can provide the members with a distinctive place for tackling tough issues, gaining esoteric wisdom and personal transformation.
Help is available. Such a group may be just the answer that you and your fast-growing company need. You can get back your mojo.
A version of this article first appeared in Upsize Magazine.
To see other opinion columns go to “Planting Seeds”.
Rajiv Tandon is executive director of the Institute for Innovators and Entrepreneurs and an advocate for the future of entrepreneurship in Minnesota. He facilitates peer groups of fast growth Minnesota CEOs. He can be reached at email@example.com.