Scalability is at the core of any hyper growth startup, and startup founders hear this a lot from just about everyone in the startup ecosystem. Martin Zwilling wrote an excellent article on this topic for Forbes. In it he says, “Investors will tell you that they love to put money into startups that are scalable, and ready to scale. But what does that really mean? Simply stated, it means that your business has the potential to multiply revenue with minimal incremental cost. Ready to scale is when you have a proven product and a proven business model, about to expand to new geographies and markets.”
Times are different now, with a global crisis threatening the existence of many businesses, how can entrepreneurs focus on scalability? The answer for us has been to change hats from peacetime leaders to wartime leaders. This concept was beautifully put by Ben Horowitz, from the venture capital giant Andreessen Horowitz. In his article about this he says: “In wartime, a company is fending off an imminent existential threat.” This is the sad reality for many businesses, due to the ongoing pandemic.
The question for founders then becomes how to shift into wartime leadership mode, and still build scalability into the essence of their work. I have researched, sought out, and experimented with this for just over 5 years. Aside from all of the technical aspects, I’ve personally found that one of the most important factors contributing to scalability, is in how scalable a business’ leadership philosophy is. And by extension, how well aligned the leadership team is on their leadership philosophy, and how well integrated it is into the company culture.
Every last one of us is a leader. Some of us are entrusted with leading others, but everyone has the responsibility of at least leading themselves. Hemant Taneja and Ken Chenault put this beautifully in the Harvard Business Review, in what they called “A Scalable System of Leadership”. In the article they write, “While a principled founding team can create a great company, an enduring company requires a system of leadership that is implemented very early in its history. The framework enables the delegation and distribution of decision making throughout the organization. It is rooted in people practices that help a company constantly recruit, develop, and retain leadership talent at all levels – and make decisions that are aligned with the company’s visions and values.”
The answer now becomes clear. As founders we need to plant the seeds for leadership in everyone we work with. Our jobs entail creating leaders, who will then go out and create more leaders. And of course this starts with ourselves, and every founding team will have a different way of embedding leadership philosophies into their culture.
Now that the answer is clear, what can be done about it? Of course, each individual on the “leadership” team should take their leadership skills to the next level through reading, courses, mentorship, etc…, but the team as a whole needs to get aligned on the philosophy behind “A Scalable System of Leadership”. Alignment among the leadership team (the founders) is of utmost importance, they have to be steering the leadership philosophy (and the rest of the company) in the same direction, so that their efforts are compounded to create a foundation for exponential company growth.
There is no cookie cutter approach to this, but it boils down to sufficiently filling yourself up, so that you may spill some leadership wisdom onto the other members of your team. Just remember, if you want to build a scalable business, work towards implementing “A Scalable System of Leadership” in the way that works best for your team. Happy scaling!