Are you a Start-up?
The transformation from start-up to scale-up is not always easy. We look at how leaders can equip their businesses with the tools they need to facilitate rapid growth.
Not every promising start-up succeeds. Even those with the most innovative products or services can fail to thrive, as the task of establishing a small business gives way to the challenge of building a strong scale-up.
In recent years, Britain has created more start-ups than ever before, yet many fail to reach the next level. The entrepreneurial drive that carries successful start-ups through their infancy becomes less relevant as a business grows and faces new obstacles. For a business experiencing rapid growth – often fuelled by external investment – the entrepreneur’s natural journey from artisan, to hero, to meddler, to strategist, has to be accelerated. Where a start-up needs an innovator, a scale-up needs leadership, management and process. As the business faces each scale-up challenge, it can quickly become apparent that the entrepreneurial owner is not at the right stage of the journey to take the helm.
When it comes to accelerating expansion, success hinges on how well an entrepreneur can address managerial pain points, delegate tasks and professionalise to scale, laying solid foundations for growth.
Leadership vs. management
Leadership is not the same as management. A scale-up needs the skills of both to drive sustainable long-term growth. It’s up to the entrepreneur to address their strengths and weaknesses to decide where their skillset is best placed, which can be a challenging task. While some founders like to maintain a hands-on approach, taking care of the day-to-day running of the business with support from a dedicated senior team, others prefer to step back and focus on corporate vision. While this does mean relinquishing day-to-day control, it can provide a better vantage point to steer the business as it scales up.
Vision and purpose
A business without a clear vision for its future quickly loses sight of its purpose. A business without a sense of purpose quickly loses momentum. Through each stage of expansion, it’s crucial to communicate corporate values and the fundamental purpose of the business to those driving its growth, from senior management to junior staff.
As a business scales up, its needs become more complex. Whilst a start-up relies on the entrepreneur, or a few talented individuals, a scale-up needs the support of a fully developed management team and a network of experienced professionals: a scale-up ‘dream team’.
The scale-up dream team should consist of the Board, including management and non-executives, and the company’s trusted external advisers: its accountants, taxation specialists, corporate finance advisers and lawyers. Where appropriate, other key specialists – IT, regulatory, property or environmental consultants -can play a crucial role. Having a team in place to advise on these issues provides access to ‘best of breed’ advice and business practice, both of which are essential in the professionalisation of the business.
The Hero’s Journey: an entrepreneur’s path to leadership
Artisan Most entrepreneurs start a business in an area they are skilled or experienced in. They refine their craft, and build the business’ reputation for excellence by playing to their natural strengths.
Hero As the business grows, they need to manage increasing numbers of staff to cope with demand, while simultaneously working for the business and maintaining quality. At this stage, entrepreneurs assume the bulk of the responsibility, fighting a lot of fires along the way.
Meddler Habitually putting out fire after fire can lead some entrepreneurs to become wary of relinquishing control, holding back growth by failing to delegate management tasks. Others, accustomed to firefighting, seek out new business ideas and diversification before setting the business on solid ground.
Strategist Make your meddling days short lived by taking a step back and looking further than the day-to-day running of the business. Look forwards, upwards, outwards: delegate to people who excel in each area and focus on the larger task of steering the business towards success.