The founders and the team rushed into the battle, and the leaders were behind the scenes.
Editor’s note: This article is from WeChat public account “Redwoods” (ID: Sequoiacap), author Craig Powell, compiled Hong Shan.
The process from 0 to 1 and the process from 1 to infinity are the evolution of the company’s leapfrogging.
As the company continues to evolve, the role of the founder himself needs to be adjusted and changed accordingly. Therefore, you should be in the first line of rushing with the team to advance and retreat, or should take a step back to let the professional people do professional things to achieve “arching and governance”, which should be based on the company’s development stage.
This article divides the growth of leaders into four phases according to the state of the company’s development. Each phase corresponds to the evolution of the enterprise and the transformation of the leader’s own role, regardless of the initial survival thinking. After the expansion of thinking, or after the entrepreneurial thinking and finally lead your leadership team, the leaders must first step into their own role transformation, and promote the company’s evolution, and grow simultaneously, thus promoting the company’s business growth.
Advanced Leadership Guide in the growth of startups
As the pace of work increases every day, you are likely to continue to improve throughout your career. Sometimes your leadership role changes, but you don’t realize that the business has changed.
In every stage of growth, the company’s business must transition to new knowledge, new systems, and new management.
So, you need a leadership guide at every stage of your business growth.
When a change occurs, your role in the company changes. Enterprise revenue and total number of employees are useful indicators to reveal the current situation of enterprises, and more enterprises will increase their revenues.The number of employees is increasing, and more employees increase the complexity of the business.
As the employee base continues to expand, the reduction in contact with employees will create a need to change leadership styles. Leaders’ growth and role transformation can be divided into four distinct phases, each of which inspires and promotes the growth of personal leadership.
First Stage:The company’s revenue is about $10 to $10 million, and employees typically have fewer than 50 employees. Everyone in the company is familiar with the day-to-day affairs of the company. The internal interactions of the company are often cross-functional, and one person will have multiple roles.
Second Phase:The company’s revenue is between $10 million and $25 million, and the number of employees is likely to be close to the 100-person mark. At this stage, cross-functional responsibilities and “multiple jobs” are beginning to be replaced by individuals with specific expertise.
Phase 3:The first phase is a far cry, ARR
(Recurring income for the year) is now increasing from $25 million to more than $100 million, and the number of employees has at least doubled.
The fourth stage
:The company’s revenue will exceed $500 million, and the number of employees may grow rapidly due to the company’s natural growth and mergers and acquisitions. The fourth phase begins when your business model is being platformed, not just a product-focused company.
An entrepreneur who wants to be a business leader needs to know and predict when and how to develop his role in the company. So, what kind of thinking do entrepreneurs need at different stages of business growth?
Survival thinking: Put the company’s survival first
This stage has a better name called “find the answer.” At this stage, long-term planning is not always the best solution, and the founders tend to focus only on survival.
The company and all employees need a sense of survival, and everyone must work hard to make the company progress. At this stage, the founder’s mind is not centered on leadership. This stage is a purely entrepreneurial stage – it doesn’t matter if you do beautiful or sustainable development, it’s important to do it well enough and get recognized.
This stage is usually defined by the will of one person or a few people, and they will put the company first in any case.
The founder of the company bears all the burdens, in order to reach the threshold of $10 million in sustainable profitability and product verification.Will bear all the necessary pressure. When the company’s ARR is close to $10 million, the founders can better understand whether their business model has a market and whether it is sustainable.
Expanding thinking: Building a repeatable, scalable system
Why do customers or customers buy services from us again and again?
If a company is too convinced that the business they provided in the past is the best, and not seriously thinking about what the customer’s real needs are, they will not consider new ideas, new tools or new strategies. Inertia can easily lead to failures in the company’s transition to the second phase.
It’s more important to figure out why things are done than to do it. You must concentrate on the true value of the company, discovering and investing in core, reproducible advantages from the business.
From the first phase to the second phase, the entrepreneurial business plan is about to be replaced by a repeatable business model because it is scalable and can help the business expand rapidly.
So, the focus of this phase will shift from the survival of the company to the core of how to polish the business. You need to grow from an entrepreneur to a system leader and creator.
Leaders need to start thinking and taking action in the long run, and expansion thinking begins to replace survival thinking.
In the second phase, the entire enterprise must become more systematic in order to adjust and polish the process to achieve business expansion. At this stage, the leader does not only rely on personal abilities, can no longer worry about the daily operation of the company, but replace it with systematic enterprise learning.
The company already has a range of products, and you have discovered one or two people who have a major role in driving business and corporate value. Initially, companies will look for general-purpose employees, but at this point they need to begin to establish repeatable systemic behaviors and methods, and turn to looking for professional talent.
For many founders, giving up something can be a difficult transition. For example, you must refrain from the impulse to attend a sales meeting in person and let the new sales representative explore it. You must turn to providing systematic training, mentoring, and key personnel induction training methods for your team.
At the same time, you need to be aware of some potential risks: the company may absorb a large number of new employees, and day-to-day decisions are gradually uncontrolled by the leadership team.
Finding balance is a dangerous journey that is critical to the smooth passage of the second phase.
Entrepreneur thinking:Support team needs
In the second stage, youHas eliminated his emotional sentiment and turned to systematic learning. From now on, you will gradually “retire to the second line”, authorize professionals to be responsible for business growth, and let corporate procedures take over daily operations.
For the leader, the third stage is
The transition from “frontline leadership” to “behind-the-scenes leadership”
.
In the third phase, the team and procedures
(Process, system, cultural trends) is responsible for guiding the company forward. The role of the leader is to support the needs of the team. The third phase naturally transitions to a simple coaching team vs. pulling the team. Leadership vs entrepreneurship is now fully operational.
In the third stage, you know what the company can do and what the market really wants. The question now is what speed the company can perform.
As a business leader, you need to develop new capabilities. You are no longer an entrepreneur who cares about market information. You need to pull away from your emotions and create a system that will allow others to succeed in their positions. Almost all of the work your company is doing now requires systems and processes.
In the first two phases, you have been the leader in the team. When you cross the founder’s stage and become a true leader, you will become the leader behind the scenes.
If you compare a company’s operations to sledding, the leader’s job is not to pull the sled with everyone in the first line, but to focus on setting the direction for the company and let the whole team unite to pull the sled.
At this point, you and the leadership team are not familiar with the professional roles of the entire process and operations, but turn to hiring and cultivating a highly specialized team of experts. You must now focus on making sure they are happy, healthy and pulling the sled in the same direction.
Cultivate, trust, and lead your leadership team
The final stage of leadership is harder to break through. A key factor leading to success at this stage is processes and systems, which are key to leadership in the first three phases of business development.
Your company has grown into a strong organization. You have to carefully select the people around you. This is the key to the company’s continued success.
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You have to trust them to understand how important a difficult conversation is.
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Speak out loud when something goes wrong.
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Teach your team to look at the business and other parts of the business with a critical eye.
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Ensure that the person you are working for will have the skills and confidence to manage the company.
If you move at a very high speed, even a small amount of jitter can cause the wheels to fall off.
In order to prevent the company from splitting, you need to have trustworthy people around you.
Let them be willing to tell the truth and be willing to ask difficult but necessary questions, especially when the company is not developing ideally, they should be able to stand up and point out the problem.
When leaders are responsible for running a large-scale business, they need to rely on a good leadership team that can avoid potential and harmful errors when they need to solve certain problems.
Conclusion
As your business grows, your daily involvement in the company is inevitable
Will change. As a leader, you need to understand the reasons for this change. You should actively lead the process of changing your role. You can’t just reject this change just because of your personal feelings. The company’s growth is a process of continuous evolution. If the leader can’t walk. In the front, the company’s development will naturally fall behind.