The People and Delegation Challenge >> Solving the Obstacle to Significant Scale
As a founder you’ll be wired to get it done. In the early days if you don’t do it then it gets left undone.
And so, it is not surprising that, as your enterprise grows, the intense focus on ‘shipping’ stays entwined within your very DNA and is part of the very fabric of your culture.
The problem is that the same superpower that got you this far could very well become your undoing, as you switch from start-up to scale up.
Let me explain why.
Let me start by saying that I know the above to be true as I’ve faced it. Having built a business as a single founder I have felt the urge to control and defend every output and outcome more than most.
In those early days it’s the reason you survive, but slowly, as you gain traction, the rules change and a founder that holds on to that control for too long slows growth and creates structural problems with staff retention and culture.
It’s for this very reason that most companies never grow past the ‘lifestyle business’ stage. Letting go is a skill few possess and even fewer understand that it is this getting in the way of growth. It has nothing to do with market, timing, or funding in the vast majority of cases. The issue is one of control.
Delegating process, delivery, and trust
The answer is delegation. And that doesn’t mean asking someone to file the latest set of monthly accounts. It means creating a hierarchy where people are given clear responsibility of specific specialist areas and are held accountable for delivery of clear targets and goals.
It seems simple when you write it, of course, but the reality is very different as not only is it a lot of work to create such a structure and the mapping of processes underneath it, but it asks many questions about you and your own value.
Ask someone that struggles to delegate, and you’ll often discover that they are ‘too busy’ to do it; arguing that the process of showing someone will take longer than if they were to do it themselves.
And that is true of course, but done well once it allows you to begin to transfer knowledge and scale the organization’s ability to perform specific tasks. Not only is this a great thing for that single task, but it also begins to change the culture of the organization, empowering employees and creating an environment of accountability and responsibility. That is rocket fuel for your cause.
Being OK with OK
That transition can mean, in the short term, that mistakes are made, and things are done as well as you might have hoped, but with the right feedback process and clear sets of accountabilities and responsibilities these issues are very quickly ironed out.
It really is OK, to be OK about ‘OK’! (at least for the short term). The secret sauce to getting this right is, of course, hiring well to ensure those empowered care about the result, and are rewarded for the right behaviours.
Hiring the right people
Trusting your workforce is an easy thing if they are clearly fighting for a shared goal with you. With clarity around your North Star, vision, and values it becomes easy to build a culture of high productivity and output. If people know why they need to work so hard then chances are they will, and that motivation is very seldomly around financial rewards; it is instead focused on solving an inherent human problem or beating incumbents at their own game.
To get this right my own process has always been to spend a lot of time on setting a clear and meaningful vision as early as possible; not just a statement that broadly speaks to your vanity but one that bears deep down on your soul as to ‘WHY’ you are really motivated to work harder, smarter, and faster than anyone else. The process to finding it is something I’ve written about previously here and here, in this multi-part post on moving from start up to scale up..
With clarity of vision, it then becomes very easy to hire people that share the same beliefs – and this is critical to success. Whilst you can learn process and ways of working it is very hard to change believe systems in people. It’s why my view is to hire on ‘fit’ and invest heavily in training and learning. Do that and your team becomes faster, better, and stronger each day, whilst employ people simply with a good CV and you may have to expend so much energy on selling your ‘why’ that the value exchange is lost entirely.
Without those things however, you fight an uphill battle, and the problems only magnify as you scale.
This hiring model should play out across each role, irrespective of seniority or importance as the collective effect is ‘culture’. Hire enough of people with the same belief system and they will not only ‘get on’, but they will develop a collective energy as powerful as anything you have at your disposal. This is your rocket fuel for scaling.
Once established as a hiring culture, however, you will still need increasingly experienced ‘generals’ to run the key teams that are developing within the business by this point.
Simplifying senior hiring
Even companies with great culture can struggle to scale. It’s an issue I see more and more as founders turn onto the importance of the first point but lack the confidence to spend ‘big’ on key hires to marshal the growth challenges that you will face ahead.
All too often founders, and leaders talk about the importance of hiring people smarter than themselves, but then struggle to truly follow through on that. Fully delegating a key area of a business to a sector ‘leader’ is harder than it sounds, as is the process of investing the kind of quantum required to attract and retain the very best. We will cover this point a little later.
Where do you start?
Before you start worrying about who you should hire to help you scale the question should first be ‘where should you hire’.
The answer is difficult to generalize around as every business is different of course, but irrespective of market and niche the same three key areas always shine brighter than the rest. I like to focus on these, at least initially, to simplify the picture and challenge the current status quo.
The three areas are:
- Sales (includes marketing)
- Delivery and operations
- Communication (internal and external)
Each of these require a world class general if you are to truly become the business you deserve to be. A ‘CEO’ for each is the best way to frame it.
Any great business runs effective and efficient teams in each of these three areas, irrespective of what it does. With a great leader across sales and marketing (the one area of business I would always suggest a ‘founder’ sticks closest too for the longest, the delivery operation and then also on customer comms and you’ll soon be in a great spot to scale more significantly.
Internal comms is critical too of course, and dependent upon size it may be that you push this to you HR head as a function, but the leadership and message should always be owned by the founder.
Operational comms, meeting frameworks and so on can and should be shared by department heads and human resources but the important glue that holds it all together is the founder’s vision. This is something that should be woven into the very fabric of what you do day to day as a team; from regular ‘all hands’ meets to the paperwork you work with. Even at 200+ employees I still sat with every recruit to ensure they understood the ‘story’ and vision for where we were heading and why and to understand why everyone worked so hard in the mission to achieve our ‘Big Hairy Audacious Goal’!
Different types make a team
The one risk of hiring for ‘fit’ is that you can end up with an office full of very similar people. Whilst this is great for togetherness and culture it can and does mean you have gaps in persona type that need to be filled strategically if you are to become the best of the best.
And that means understanding how to quantify different traits and what a team requires to be most effective.
There are multiple ways you can do this but I’ve always found that a simple colour personality test is a great addition to the interview process pre-employment and for understanding your current employees and team make up a workshop to run through the tried and tested Myers Briggs test is helpful, so you can assess gaps and decide what a specific team may be missing.
Knowing what you have and haven’t got within a team, particularly if it is underperforming, can often create a light bulb moment, aiding you in the search for a solution.
What other ingredients make for a high performing team?
Put together a team with the right set of attributes and a shared mission based on the leader’s vision and energy and you’re in great shape. That said though there are still checks and balances that are needed to ensure that energy and momentum can be sustained over the long term
Accountabilities and responsibility
Creating clarity on who is responsible (and therefore accountable) for what is key, and obvious, but committing to it is difficult. It can be hard to hand off ownership of important processes, relationships, or leadership, but without doing so you and your team has little chance of realizing full potential.
Run a solid personal development plan process that sets clear, measurable goals for everyone over a three-month period. Setting for 12 months under some archaic annual review process is just no longer fit for purpose as the world changes much faster. Instead make it a kaizen process and look to meet more regularly (monthly) to catch up on progress and then reset every quarter. This means your measures of success stay much more aligned and are not forgotten about either in the melee of daily life.
This greater focus on responsibilities will create that empowered culture you look for. One where always-on coaching is the order of the day, as opposed to directionless, or outdated personal development.
Add the right kind of incentives to this mix and you’ll then throw fuel on the fire. I’m not a huge fan of bonuses if I’m honest, as I’ve tried them all and have still never found the right one. Instead, I prefer to look at good salaries and longer-term incentive structures that are aligned to the overall business goal. If that is an eventual exit, then great. If the aim of building a multi-generational dynasty, then fine also. The key is ensuring everyone understands that and is rewarded for getting there and taking part in the journey along the way.
Often this means designing an eloquent employee ownership structure, where equity of some kind can be awarded to key and high performing staff over time, creating stickiness and rewarding long term investment in the ‘cause’.
There are a hundred ways to make this work of course, with different shares classes enabling founders to create different ‘rules’ for ownership and earning of a piece of the pie.
In the simplest terms this can be a model where a ‘pool’ of equity in the business is handed to key employees over time, with protections build in in case of someone leaving, or not staying very long.
And at the other end of the spectrum, you can have a structure, like we did, with multiple share classes each designed to for different levels of management and each with very different values. Some paid out only if the business sold over certain hurdles of value, for instance, whilst others allowed for dividends and so on.
For more on this key subject Vestd has an in-depth library and I’d recommend you spend some time on there to get up to speed. And, if you’re a start-up, this guide to commonly used jargon can help you too!
A great advisory board
And lastly but not least is that no great company was built without a brilliant advisory ‘board’. This may be a single experienced person from your sector, or a team with a diverse set of experiences to bring to the table. The mix isn’t too important but getting it in place earlier than you think you should is critical for accelerating growth and avoiding perilous pitfalls. I should know this only too well as I didn’t do it soon enough. Then, when I did, I wish I had done it MUCH earlier.
It may seem silly having ‘board meets’ when you’re a handful of people with little revenue but introducing a simple governance structure instills the right kind of strategic behaviours early, keeping you focused on your goals and accelerating the end game.
Setting up a team to deliver your dream is an incredibly difficult task. Fewer manage to fully achieve it. Some never start, others think they are doing it but never truly let go of certain parts, or back their team to hire in the generals they really need to break through the glass ceiling and achieve true scale.
And that’s understandable. Giving up your ‘baby’ or accepting that others should be doing ‘your work’ is a personal attack on who you are and your value. But this is precisely what those we all look up to have done.
Give it a go. It’s life changing…. I know!