Techblog
How leadership skills should evolve when scaling your business
When you're growing a business, you also need to grow yourself as a leader – your leadership and decision making skills needs to evolve as you switch from scaling up to gaining traction and sustaining long-term growth.
Ever wonder why owners of small businesses and startups seem so different from multinational CEOs? It’s because as companies grow, they go through different phases that place different demands on leadership.
As a leader, your approach and focus needs to change as your business matures. Here's how you should adapt your leadership and decision making in order to grow your business from strength to strength.
In the beginning, experiment
When you’re heading up a small business, the most effective leadership approach is geared towards experimentation. You need to be flexible, ready to take risks and adapt.
Why is experimentation key? As author Eric Ries said, experimenting and testing is the most efficient way for a startup to learn. Learning is critical, as most founders start with a product idea and need to find out if it’s viable. The Lean methodology teaches that, rather than exploring whether your product can be built, leaders should seek to answer the question: "Can we build a sustainable business around this set of products and services?"
Entrepreneur Shishir Choudhary used frequent early experimentation to grow Sociacad in Singapore, saying it was invaluable for highlighting "what did and did not work”.
Refine your model
Your focus on experimentation also needs to be in line with a broader goal: refining a business model – which is essentially how you plan to make profits.
You can use Running Lean author Ash Maurya’s adapted Lean Canvas to document assumptions as you test and refine your model. He emphasises understanding the problem your product solves, saying most businesses fail by wasting “time, money and effort building the wrong product”.
If the model is wrong, you need to take the decision to pivot – like Apu Gupta, who pulled the plug on Storably and DrinkedIn before founding Curalate. Why did Gupta settle on Curlate? He identified a market gap for visual marketing and, as he explained: “In tech, it is very rare that you get to start a company in a space that doesn’t exist.”
Build foundations with technology
Finally, startup leaders need to focus on technology. Investing in robust technology works to establish strong foundations for your business.
But you should go beyond enabling investments. Many founders lead with a technology mindset because in today’s digital world you need to consider technology in all aspects of business – from marketing to human resources.
You also need to recognise when to implement technology to support growth. Grace Garey, co-founder of crowdfunder Watsi, recognised the need to switch to a scalable solution after spending hours on manual uploads.
When you gain traction, hire
When businesses gain traction, leadership priorities switch to supporting growth. Your focus should shift to hiring – you need to recognise when it's time to bring in others.
One sign is if you find you have too many customers to handle. Gupta learned the importance of recognising this sign after hiring too slowly. “We could have been twice as strong if we leaned in more and hired more,” he said.
Cultivate culture for expansion
With your expanding workforce, top among your new priorities should be cultivating culture.
What's culture and why is it important? Anthony Tjan describes it well, as your unique way of operating “based on common principles, norms and values".
And Harvard Business Review has written numerous articles detailing research on how positive culture has “dramatic benefits for employers, employees and the bottom line”. One writer recommends leaders cultivate culture by showing empathy and encouraging employees to talk about problems.
Raise productivity
Lastly, you need to focus on sustaining growth by fostering collaboration in your workforce to raise productivity.
This is where your technology mindset comes into play again. As far back as 2012, Harvard Business Review predicted tech-enabled collaboration tools would drive productivity gains for business. Fast-forward to 2015 and, sure enough, the New World of Work SMB Study revealed more than half of small businesses surveyed in Asia-Pacific were using collaboration tools.
As a leader, your job is to determine which tools suit your business and enable them where they deliver economic returns.
To grow your business into a multinational, you need to grow your leadership. Remember, recognising the phase you're in, identifying signals for change and switching your approach can support your journey to scale.
- In the beginning, experiment and take risks to identify what works and what doesn't.
- Refine your model as you grow and as your industry changes.
- Leverage technology to improve processes, no matter what product or service you offer.
- As you gain traction, hire the best people to support and fuel the growth.
- Cultivate culture to bring together your team based on strong core values.
- Enable collaborative productivity using the right technology and tools.