Written by Cheryl Flink, Ph.D.
The company has proven that its idea has momentum. Minimum viable products passed muster and the team has secured critical client contracts. Financial forecasts have become increasingly predictable. Increased brand awareness has resulted in customer demand and the company has officially entered the Growth Phase. The CEO and executive team must now develop a plan to both accelerate revenue growth and stabilize the business. It needs an operating model.
The operating model should balance new innovation with operational execution, developing sustainable and repeatable processes that maximize profit while continuing to fund product innovation. The executive team will undoubtedly need new capital to fund the business to spur organic growth and possibly acquire other companies. The organization is maturing and must move away from the heady days of invention and experimentation, a small team making fast decisions, and little need or time to develop scalable processes. The startup days are over and the CEO will need to lead differently.
Four leadership challenges of the growth phase
The four leadership challenges of the Growth Phase have a central theme: it’s about letting go and delivering excellence through teams.
Learn to delegate
This sounds deceptively simple but is easier said than done. The CEO must move from a belief that “only they” have the answer to asking, “what do my teams need to make decisions themselves?” They must build trust in others and create psychological safety for the team so they know they can surface issues, make decisions, and learn from mistakes. The CEO must move from believing “I am indispensable” to “My team’s got this.”
Create the operating model to scale
The CEO must formalize roles, establish policies, and standardize procedures—all with an eye toward creating operational efficiencies. For some CEOs, this can be boring and tedious work—but is required to scale the business. In startup mode, there may have been a keen focus to drive revenue and create proof points—and profit did not matter. Now, the organization requires the infrastructure for repeatable processes, platforms that can handle increased volume and load, and a forward-thinking talent workforce model. The CEO must move from thinking “revenue trumps everything” to “profit matters.”
Put the right talent in the right role
Everyone cannot do everything like they did in the startup days. The CEO needs to put the right talent in the right roles, matching A players with the most
critical roles to scale and accelerate the business. This may mean hiring new talent and bringing in people who come from outside a trusted network. The CEO may also need to replace people who were capable in the startup phase but do not have the talent needed to scale the business—and that may raise concerns about the responsibility to others and the impact of painful decisions. However, the CEO must move from loyalty to the startup team to choosing the best talent for the future.
Inspire other to follow
Attracting and retaining talent requires a corporate vision and mission that builds a sense of purpose. People must be inspired to be truly engaged. They need to understand “what good looks like” and how their work contributes and will be rewarded. The executive team needs to build executive connectedness (Flink & Coley, 2024). Constant communication of what success means will be an everyday part of the job. That can test the CEO’s patience. CEOs may also experience some loss as they move away from the hands-on work to leading people. Their role has shifted: They must transition from executing the work to inspiring others to deliver with excellence.
