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L&D's Role in Scaling Up an Entrepreneurial Venture

Tuesday, June 10, 2014
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In most cases there’s one thing keeping an entrepreneurial venture from making the turn from start-up to a sustainably growing and thriving enterprise: the entrepreneurial founder and leader. The most important contribution learning and development can add to making the turn successfully is getting the entrepreneur out of the way.

I’m not saying out of the company, just out of the way of the other people trying to do their jobs. The entrepreneur hired people to do things he or she can’t do alone—to help him or her and the organization scale. The entrepreneur can still lead if he or she can lead differently.

Case in point

Institute B’s Darrell Kopke told me how Peekaboo Beans’ Traci Costa started her company. While Kopke has been on its board, the company has grown from $200K to $5MM in sales. But now Costa is stuck. Kopke says, “She’s becoming the bottleneck.” She has a set of lieutenants that are “supposed to take things off her plate.” But Costa has had a hard time letting go.

Kopke is helping Costa make the turn by helping her understand and build three things:

  1. context is everything
  2. culture of execution
  3. dashboard of salient KPIs.

Context is everything

Costa must give her team a “clearly painted picture of the future,” says Kopke, who thinks the CEO of a sustainably growing and thriving enterprise must act as the Chief Why Officer—driving vision, mission, and values. In other words, the Chief Why Office is the “soul” of the organization.

This neatly lines up with two important leadership questions:

  1. Where to play?
  2. What matters and why?

Culture of execution

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Costa and her team must get clear on who does what by when. These need to be founded on the values, vision, and mission.

This gives Costa a way to understand what’s happening while keeping her hands out of the day-to-day. Instead of meeting with everyone everyday, Costa is now meeting with her team on Monday to get clear on what’s going to happen and then again on Friday to understand what did happen.

Dashboard of salient KPIs

Kopke makes the point that these KPIs must be more than just financial. They also need to include lead indicators. We heard this from East Coast Wings’ Sam Ballas, as well. He explained how most financial measures are retrospective. You need other measures to get ahead of the curve.

This fits with the basics of scaling up a business:

  • Destination planning: Begin with a vision of the value that can be created and what the enterprise must look like to create that value. Next, assess the current state with brutal honesty. Finally, build a plan to bridge the gap.
  • Assemble the resources: Team, advisors, capital, and acquisitions to multiply value creation.
  • Manage the implementation: Cultural change, execution, and your own transformation as a leader.

Changing from entrepreneur to executive

The change from entrepreneurial founder to enterprise executive is not easy.  As executives, founders need to get serious about the art of delegating and “work on the business, not in the business.” They must own the vision and values, build the team, and get out of the way.

These leaders can make the change only if they want to make the change. Costa neither had to nor really wanted to make the change and give up control until she saw the organization stagnate, she ran out of time, and she wanted more freedom.

Wanting to make the change is the first step, but just the first step. Kopke explains that “ingraining new habits of behavior happens in baby steps.” First Costa moved from ongoing involvement to daily meetings, then to two meetings a week. Eventually she’ll move to weekly meetings or less.

Kopke points out the need to keep in mind that “there’s nothing logical about business.” He reminds Costa that all choices are emotional choices that get justified afterwards.

Leading teams of different sizes

Help people lead differently as the team grows. What works with a start up team hurts a larger team. Get leaders out of the way when they are in the way and focus them on where they can add real value at the different stages.

About the Author

George Bradt has a unique perspective on transformational leadership based on his experience as a business leader, consultant, and journalist. He progressed through sales, marketing, and general management roles around the world at companies including Unilever, Procter & Gamble, Coca-Cola, and J.D. Power’s Power Information Network spin-off as chief executive. Now he is a principal of CEO Connection and managing director of the executive onboarding group PrimeGenesis.

George is a graduate of Harvard and Wharton (MBA), co-author of four books on onboarding, including The New Leader’s 100-Day Action Plan, and co-author of a weekly column on Forbes.com, The New Leader’s Playbook.

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