How does sudden growth impact leadership?
All leaders want to stay true to their active role in their business while handling all other problems. But is this feasible in the long term, and how does leadership change due to fast growth?
An imaginary client has her own carpenter business. The unique and good quality product attracted many customers, soon 4 carpenters were working together to satisfy the demand. As the company kept growing, the founder had to pick up more and more overhead tasks and started making fewer tables. The other carpenters started noticing this change. They might start wondering: “Why isn’t she making as many tables as they are?”
In their eyes, the founder was having less output. The founder discovered a new trade-off between sharing information with partners and the speed of handling new information. This is one of the effects of growth on leadership.
We also experience some other effects of business growth on leadership:
- Decrease of personal time
- Decrease of involving all employees in daily operations and information processing
- Decreased involvement in daily tasks
And here are some effects we observe on employees:
- Growing distance with top management
- Decrease of insights and information
At the carpenter company, new questions started to roll in in the everyday operations, especially to the founder/leader. “What if the demand decreases? Who is buying the product and why? How to attract them again?”
These are questions that were not being seen by the other carpenters, only by their leader. However, the leader simply cannot ignore these issues without jeopardizing the future of the company.
Typical new problems faced by top management
- Pressure from competitors or potential investors
- Handling bigger frequency of sales
- Handling recruitments
- No set procedures for large-scale communication
- Lack of set values
- Lack of long-term strategy
During the lifetime of every successful start-up, a certain point is reached where leadership needs to pick up more and more tasks. As a leader, staying transparent with employees ensures they know about what is happening over their heads. But how can this be achieved effectively?
Having a clear long-term strategy, supported by a set of core values can help to resolve this issue. This helps to communicate with all employees and provides guidance during growth. Outside consultants have the best view of all factors affecting the growth and how the strategy needs to be formulated.