Scaling Your Startup: The Secret Sauce That Primes You For Growth
When I talk to startup leaders about investing in culture strategy and leadership development, I often hear:
“Oh, we’re just a startup. We can’t focus on that right now, we’re focused on getting this company off the ground.”
“We’re such a small team, we don’t need to think about culture or leadership development.”
But here’s the secret that too many startups often miss: strategic thinking needs to include more than just how to design great products and how to get them into the hands of customers.
How small companies grow into big companies
Strategic growth includes thinking about WHO is getting those products to customers and HOW they are doing it.
If you’re planning on staying small, then go ahead and think small.
But if you want to grow, you’ll need to compete with the established companies – not just for market share, but for mindshare too.
Who’s going to do the work?
Millennials make up the biggest pool of prime talent and they’re looking for roles where they will thrive and grow professionally. They expect their employers to offer development opportunities so that they can move up the ranks in their careers.
When they start to feel like they are stagnating, they leave for companies that can give them the next step they are looking for.
As mentioned in this Harvard Business Review article, startup founders who ignore this often find keeping enthusiasm up as the company grows is difficult, especially as the direct link between founders and employees becomes less tangible or less possible (when opening remote offices, for example).
As a result, many startups that experience zero turnover during the first year or two suddenly find themselves dealing with as much as 40% turnover in year three.
When you’re small, it matters even more
Culture strategy including leadership development actually has a huge impact on operations of even a small company.
Startup founders often tell me they don’t have enough people to train.
As much as they believe in developing people, they say that it doesn’t make sense to bring in a development program until the workforce has the numbers to fill the training room.
That may seem reasonable at a surface level, but if the founders don’t treat professional development like any other strategic element of building a business, the culture won’t thrive.
That means the company won’t grow because they just won’t have the people they need to do higher volumes of work and serve higher volumes of clients.
It’s kind of like gardening.
Ever seen a garden that’s been left to take care of itself?
Even a small patch of veggies quickly becomes such a choked up mess of weeds, bugs, and broken plants that not only can it not produce, in the blink of an eye it’s easier to rip the whole thing out and start over than it is to clean it up.
When it comes to development programs, startups have to behave like mature companies because no organization has the luxury of cutting corners when it comes to attracting and retaining talent.
The war for talent is real
A quick google search brings up endless reports on how millennials manage their careers and what they expect from their employers if they’re going to stick around.
For example, millennials are ok with switching jobs every few years if it means that they get to keep learning, growing and advancing.
And companies in the West are about to face a retirement boom leaving many attractive leadership seats available for millennials to fill. With the wide variety of choices and opportunities available, they’ll have to be very happy where they are to stick around.
As Ulrick Christensen notes in a recent Forbes article “companies in the future will need to take responsibility and invest more proactively, not only by providing access to training courses, but also to invest in the time it takes for employees to learn…there will be a significant competitive edge to be gained in building expertise and developing talent.”
Startup founders will face these issues as much as well established companies – but they’ll suffer even more
Why do startups suffer more from talent shortage?
A small team is more impacted by losing people because fewer people make up larger percentages of a department.
If you lose one employee, you could be losing a third, half or even 100% of the talent representing one area of your company.
The secret sauce to scaling for startups
So how do you create a positive cycle and compete with the big players? You act like a big player.
When you attract and retain employees like the big leagues by offering development opportunities you make it appealing for people to join your company and stay.
This will save you oodles of time, truckloads of money and reduce your stress levels in countless ways such as allowing you to see projects through seamlessly.
Leadership development helps you avoid high turnover – but there’s more
When you’re on board with the need to offer meaningful professional development programs to attract and retain top talent you avoid the headaches that come from a revolving door of high turnover.
But there’s more ROI than that.
Strong leadership development programs within a startup become even more valuable when you look at the impact well-developed leaders have on employee engagement and company culture.
Getting and keeping customers is the end game for all businesses but it’s the blind spot for founders of startups who often want to focus on nothing but product development and customer attraction.
Founders need to be tuned into the impact that culture has on employee retention and engagement and the impact that retention and engagement has on customer satisfaction and loyalty.
It’s a circle – engaged, happy employees = higher employee retention = more satisfied customers = higher customer retention = successful, scaling startup = engaged, happier employees…and on and on.
Effective leadership development strategies to drive results for startups
When startups take the plunge and understand the need for leadership development strategies, there are a few things to keep in mind.
A successful leadership program for startups will be one that:
- Offers consulting with the founders or HR directors to set goals and explore how success will be assessed and measured against your expected ROI
- Can be offered and managed cost-effectively, without having to develop an expensive in-house program or use valuable employee time managing it
- Allows you to enroll just 1 individual or a small group into a public program so they can benefit from the large group learning experience
- Offers micro learning sessions so that your employees don’t have to be away from their work for long hours at a time
- Incorporates video, audio, short lectures, printed materials, live coaching and group coaching so that the diverse learning styles of your participants are accommodated
- Includes action learning so that your employees can start applying what they are learning the same day they learn it
A great example of a leadership development program that has all of these features is The Coaching Academy for Leaders, specifically developed to provide programs for startups who may want to send 1 to 5 individuals for training.
We know that 40% of a company’s performance is negatively affected by a poor leader, 77% of organizations report a leadership gap, and 67% of millennials are looking for a new job.
Clearly, startups need successful leadership development programs now more than ever. And these programs are especially critical during the early stages of a company’s development.
It’s time for startups to pay attention to culture strategy as not only a ‘nice to have’ but a ‘must have’, so their employees will be engaged, resilient and agile in times of change.