When an entrepreneur starts a business, they are often surprised by the administrivia that goes with running a company. While the business is small, the burden is manageable, but as the business grows, the vortex of every day distractions grows. In the early stages, most entrepreneurs find themselves at the center of the storm, and many relish the role of ultimate controller and decision maker. During the scale-up phase, most of the hiring is to fill holes and just get the work of the business done, so the entrepreneur leader fills in the gaps and continues to be the catch-all for every decision.
A lot has been written about the need for a major shift in the leader’s behavior for a company to transition from the scale-up phase to the actual grow-up / maturity phase. The former is about bulk, while the latter is about creating a sustainable, scalable enduring business. For the entrepreneur, this is a soul searching time. Nobody is skilled and knowledgeable about every aspect of a business, and while the entrepreneur may have been able to cover the basics when things were relatively simple, as the business grows, the team of leaders and doers needs to mature or the wheels will quickly fall off.
The first hurdle for an entrepreneur is to recognize the need to hire skilled (and usually expensive) executives to lead and grow functional areas of the business. The business will need professionals to lead sales, marketing, engineering, finance, etc., and to be the pillars that support growth. There is often a bias to under-hire in some of these roles - to hire a manager instead of a director or VP, or to promote a junior person and expect them to learn on the job. Hiring from within is admirable, but under-hiring in key positions does not grow the muscles of the business, and just means the entrepreneur will have to continue to carry the day. Initially senior hires will be cash burdens on the business, but ultimately they will become self-funding drivers of success. In one of my early CEO roles, we had big ambitions and limited cash. A wise venture capital investor advised me not to try to go it alone just to save money. He guided me to part with some of our precious cash to hire a couple of key executives. Once they were onboard, the world changed, and we were able to move forward in ways I could not have imagined possible.
The second challenge for the entrepreneur is to step out of the center of the vortex and the role of being the chief decider. When all decisions go through the CEO, the job becomes all consuming, but more importantly, the CEO becomes a choke point constraining the business. If you hired quality leaders, you have to be able to trust them to lead. If you do not trust them to lead, you probably hired the wrong people. Trust does not develop overnight, so this is not a question of hiring an executive one day and turning over the keys to the kingdom unsupervised the next. However, the CEO’s trajectory has to be to let loose the reins if they want to see the business mature.
This process of opening up space delivers benefits in both directions. For the executives, it affords them room to grow and exert their influence as true leaders. Equally, for the CEO it opens space to lead the business forward, instead of being trapped as the tactical decision maker. Opening space to lead means the CEO can have the time to think and be more strategic, knowing that the business will continue to execute and operate effectively with a skilled executive team. Rather than being caught up in the tyranny of the urgent, the CEO will have the opportunity to widen their aperture to see the full business and the market, so they can plot the course forward.
For some entrepreneurs it is hard to let go. I heard one CEO say that he knew he could do every job in the business better than his executive team, and it was just awkward to sit back and watch them struggle, so he remained firmly in control of everything. If he was right about his team, then he had the wrong team, but more likely, he just could not let go. Creating space is not about retiring in place or checking out of the business. It is a conscious effort to make room for others to step up and help to drive the business forward. It is a recognition that you may not actually be able to do every job in the company better than anyone else, so it makes sense to hire ‘A’ players and let them shine. It is also a recognition that your own bandwidth is limited, so it is important to prioritize the contributions you uniquely can make to the business, and make space for others to pick up the slack.
The ultimate act of making space is when an entrepreneur acknowledges that someone else might be a more capable leader to take the business forward as the CEO. I have often written about this moment as a question of ‘do you want to be rich or king?' The entrepreneur who is enamored with being the CEO and remaining king is likely constraining the value of the business. Often, stepping aside and trusting an experienced professional to grow the business will result in greater success and greater riches.
Creating space to lead is an important lesson that requires daily practice. Letting others run the meetings, holding back your opinion until others have made their contribution, delegating without reserve, providing freedom for others to experiment and even fail, are all examples of creating space. When you do so, leaders will rise to the occasion, and your horizons will open up. This is one of the most fulfilling moments of an entrepreneur’s journey.