How do you scale your leadership so you can scale your business?
When I became the CEO of StoneAge at the age of 30, I had no idea if I had what it took to scale a company. I had much to learn and often felt uncertain about how to best take the company to the next level. Along the way, I made many mistakes, such as developing a product without doing enough market research (the product flopped) and implementing a new ERP system in less than five months (the implementation was a mess, and we had to go back and fix our mistakes a few years later, which was very disruptive). But no matter the mistakes that my fast-moving, market-disrupting style created, we’ve managed to grow every year throughout my 15 years at the helm.
But this is not always the case. Many times, leaders can’t scale their companies. They hit the ceiling of their innate leadership competencies and eventually hand the reigns over to the next generation of leaders, whether fresh blood or someone more seasoned.
Growth creates change, and change tends to scare people. Growth can also cause a company to fumble, especially when they are moving fast and don’t have all the pieces in place. Exploring new businesses while maintaining current ones is difficult to do, and most people want to protect the status quo rather than take risks. For these reasons and more, strong leadership is essential.
As I’ve been preparing for our next phase of accelerated growth, I’ve reflected on how leaders can scale as their businesses scale. Besides capital, scaling a business requires leadership with vision, curiosity and grit. But how do you do this? Here’s what I’ve learned during my leadership journey.
Surround yourself with people who have done what you want to do.
I found success as a young, inexperienced CEO because I surrounded myself with people who had achieved what I wanted to achieve. Most notably, I built a board of successful CEOs and organizational development experts to advise me as I grew as a leader. Surrounding yourself with seasoned executives won’t always be a comfortable experience, but that’s what you should look for. You need people on your team, board or mentor list who you trust to tell you things like “That’s a dumb way to go about that” or “You can do better.” I also recommend peer-to-peer learning spaces such as Young Presidents’ Organization (YPO) and Entrepreneurs’ Organization (EO). You can learn so much from other leaders in the trenches who are going through similar experiences and learning to scale.
To scale a business, you must have a vision and a plan to get you where you want to be. Let’s say you want to transition from a manufacturing company to a solution as a service company. To do this, you must add technology capabilities to your service and product offerings. This clarity informs your product development initiatives, and you might choose to reduce the development of core products and invest in developing IoT or AI products. You will also want to create opportunities for recurring revenue, so you develop or acquire a subscription offering, invest in subscription management software and bring on new sales and customer success capabilities. Without a clear vision and plan, you might haphazardly make decisions, miss investment opportunities, perform unfocused work efforts and ultimately stunt your growth. Being clear on where you want to grow focuses your strategic initiatives and allows you to take advantage of opportunities when they arise.
The most disruptive leaders are ambidextrous, meaning they know how to exploit their current business while at the same time exploring new growth opportunities. On the surface, that may sound easy, but it’s not. The status quo is hard to overcome, especially when a company is successful. But the best leaders know that to sustain in the long run, they must maximize efficiency in their core businesses while looking for and treating new businesses as learning organizations — unhindered by the unrealistic expectation to only mimic what makes the core business successful. Being ambidextrous takes commitment to do both well: Explore and exploit. Make the proper investments, incentivize executive leadership by tying success to the organization as a whole and never stop innovating your next strategic move.
Develop your leaders.
No one can scale a company alone, and you must develop a strong leadership team to take your organization to the next level. Invest in your people by offering educational and training opportunities. Test your leaders by giving them new challenges and expanding their roles. Help them understand their leadership strengths and weaknesses and create development plans to grow. Set clear expectations and goals, helping them paint what success looks like. My favorite and easiest way to push my executive leadership team is to ask, “What do you think? What decision would you make?” Asking these questions does two things. First, it forces them to articulate their thought process, and it helps them gain more confidence in their decision-making. As often as you can, let them implement their ideas.
Never settle for mediocre.
Mediocrity will never get you where you want to be. Don’t settle for mediocrity, not from yourself and not from others. It’s your job as a leader to drive the organization to be the best it can be. Sure, it may be easier to let poor performance slide, but remember, what’s tolerated becomes what’s expected. No matter how uncomfortable conflict makes you, you must address all areas of mediocre performance. Give feedback, expect high performance and remove underperformers and toxic people from your team. You can’t scale mediocrity.
Scaling is not easy.
Scaling a company isn’t easy, nor is it a simple process. It requires vision, strategic capacity and grit. But it’s worth it in the long run. When you scale, you not only solve more of your customers’ problems, but you also have the opportunity to create meaningful and engaging jobs for more people.
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This article was originally published on Forbes.com