How to lead a scaling business

Growth: it’s the universal business aspiration. But delivering it is only half the battle. As any business leader will tell you, managing it is just as much of a challenge. When a company morphs from a few hires into an established enterprise, potentially spread across multiple geographies, leadership styles must adapt accordingly.

For practically any organisation, there are proven strategies for managing complexity. Two-way feedback sessions between managers on different tiers can be helpful, so too careful goal setting to align every individual’s development with what the business is ultimately trying to achieve.

But not all advice is so one-size-fits-all. Mike Henderson, HSBC UK’s Head of Leveraged Finance, says that ‘‘businesses need to consider the unique dynamics of their industry, market, organisational structure, culture, and ultimate ambitions to determine which leadership strategies will yield the greatest results.’’

Here, three experienced business leaders offer leadership advice for different growth scenarios...

Cockburn admits he was reluctant to accept how his relationship with the team was evolving.

“It’s particularly challenging to realise that you’re no longer one of the gang; people see you as the boss,” says Cockburn. “And that is challenging personally, because you think you are still one of the gang.” It’s paramount you let that go, and embrace your more “grown up” role. “As a founder, you are synonymous with the business, and as the company matures, so must you.”

As the business gets bigger, you’ll no longer be able to control everything. One way to balance company standards with employee autonomy is to foster a culture in which employees are likely to act in the way you expect.

“I like everybody to align with some core principles of how we think things through at the company before they get full autonomy,” he says. “Because if you don’t calibrate, and then you give people autonomy, you dilute the organisation, especially at 50 people: It’s very easy to tip the culture into something that it doesn’t intend to be because of a powerful personality.”

He admits that this process itself might feel like micromanagement initially but, he says, once everyone is on the same page it means the boss doesn’t have to constantly intervene. How best to “calibrate” people? Communication is key, and it should incorporate multiple channels. In addition to training and coaching, consider newsletters, videos, webinars, posters, or meetings. Reward those who best exhibit the desired behaviors.

See yourself as a work-in-progress

A scaling business should be seen less as a vindication of your leadership abilities, and more as a prompt to work ever harder on them. “I’m constantly trying to understand what makes a good leader,” says Cockburn, “and constantly speaking to folks who are way ahead of where I am.” Cockburn says that one area he is working on is humility. “It’s the most important trait that I have had to develop in myself as a leader,” he says, noting that it isn’t just about being “a nice person” but warding off complacency. If leadership constantly assesses its own strengths and weaknesses, then so will employees, promoting creeping excellence within the organisation.

It might seem counterintuitive, but a founder stepping down for the good of the business is relatively common in startups. As they scale, the direction, priorities and requirements of a business can shift radically. And since the founder is almost certainly a shareholder, and therefore incentivised to think commercially, many take such a decision in their stride. The crucial thing is to remove ego from the equation and dispassionately assess the situation for what it is.

Pedraszewska was serving as COO, moving her focus between product management, people operations, and marketing as the company grew, but by the end of her tenure was spending most of her time covering the CFO role. As the company geared up for larger funding rounds, however, “our investors’ profile was shifting from tech-driven to finance-driven,” she says, “reinforcing the need for a formal CFO role.” What’s more, as the scale-up phase tapered off and the focus shifted to more sustainable operating income, distributing responsibilities among fewer senior executives could help the bottom line. To her, the decision was obvious.

Pedraszewska highlights two other scenarios where founders may wish to consider choosing the business over their own position. If the company is preparing for its next stage of growth, she says, it is not unusual to bring in a CEO with previous experience of taking a business to the next level. Another is when a disagreement among the cofounders, or between the cofounder and a major shareholder, about what the future should look like starts to impact the company’s stability. “Here, parting ways could also be a better solution than trying to sail the ship in different directions. That's what usually sinks”

Leaving a business which in many ways is “your baby” is hard enough, but adjusting to a routine that isn’t defined by an all-consuming job can be even more disorienting.

So, remember: If you’re leaving because the role is no longer aligned with where you can add value, this is an opportunity to get back to what you’re best at.

What excites Pedraszewska is the thrill of the scaling journey. Since leaving VividQ, Pedraszewska has joined Founders, a Cambridge University strategic initiative, as an Entrepreneur-in-Residence. She has been mentoring startups and helping academics turn their innovations into commercial products. “I love building and wanted to seek opportunities where lifting things off the ground and scaling them up was the main focus,” she says. “That’s where my skills are the most applicable.”

Keep your options open

Pedraszewska spoke to many founders before leaving, and found that a number of those who had made a similar decision had returned to their old businesses later.

If that’s your plan, make sure that you leave on good terms, and keep relationships with former colleagues alive after departure. “Like for any other first-time founder who spent years building their startup, VividQ will always hold a special place in my heart,” she says. “I like to think that in the future there might be the right opportunity for me to step back in.”

Moore joined the company having spent more than 25 years in the semiconductor industry. When you’ve got proven experience in a field, it can be tempting to immediately start forming judgments and making changes. Instead, Moore embarked on a listening project. He heard from the board and executives, understanding their views on the business and canvassing their opinion. He also stepped out of the C-suite—crucial to avoid groupthink—to spend time with both the wider business and its customers.

Listening has another virtue. “When you’re the incoming CEO, everyone is looking to you, and showing that you recognise and respect the talent in the organisation sends an important message,” he says. “Though it is essential to balance listening with a sure-footed sense of direction to give people confidence in the roadmap you draw up.”

... And you will need a clear roadmap

Moore cautions that he’s seen companies with a great value proposition grow too fast, losing sight of the company’s goals and culture. For a company like Pragmatic, that’s a particular risk. “Pragmatic is what’s called a foundry,” says Moore, meaning they specialise in manufacturing chips on behalf of other companies. “So, that means that we can satisfy a very wide range of applications and customers. We can take a customer’s design and produce chips against that within weeks. But that also means there are so many different strategic directions the company could pursue.”

It’s vital to define parameters with a roadmap that serves the company’s mission. Moore’s mission is all about impact. “That’s just a big part of Pragmatic: A compelling vision for how technology can be applied by everyone, everywhere, for good in their everyday lives,” he says. “And that’s inspiring for people. And so, you have to make sure that even as you look at all of the transitions and changes that you’re driving, that you don’t lose that essence of what drives the culture and motivates people to make a difference and have an impact.”

Give the leadership team a tune-up

If you’re tasked with taking an exciting business somewhere even better, the existing leadership team will be critical for success. Your task is to work out the optimal way to complement that team to ready the business for its next chapter. Moore has a process for that—and advises against taking shortcuts. “It’s vital to invest in spending time together, you really do reap what you sow here.

“I find regularly gathering offsite and in-person as a leadership team is imperative. The goal here is to understand the dynamics of the team, our strengths and challenges, and how we can best work together, communicate, collaborate, and challenge one another to raise the bar. Engaging in open and honest dialogue is incredibly important in helping a team bond and solidify around a mission.”

What we learned

Six one-line takeaways

1. If you foster the right culture, your staff will make the right decisions.
2. Humility avoids complacency.
3. Stepping down can itself be an act of leadership.
4. When you leave a business, it doesn’t have to be forever.
5. Great leaders are great listeners.
6. Invest in spending time with your leadership team.