Bringing your first few hires on board and sketching out a mission statement are comparatively easy. But, as a business starts to scale, handling your people and purpose becomes much harder
Whilst growing a business is difficult at any size, there is still a world of difference between running a startup where you see the same five faces each morning and a company that spans multiple countries. Ensuring you have the right people and processes in place offers a firm foundation for a startup to seriously scale down the line.
The first resource any company interested in scaling needs in place is perhaps the most obvious: talent. “The really hot companies spend an enormous amount of time finding the right talent to grow the business,” says George Whitehead, venture partner manager at Octopus Ventures, the VC firm. Not only can this provide a scaling business with the raw power it needs to successfully build itself up but top-class talent can often help a company attract more of the same. “It creates a momentum of its own and increases the magnetic field of the business to draw in the best talent,” Whitehead explains.
But if a startup looking to scale wants top talent that will grow with the business, it needs to be prepared to reward it commensurably. “As the company grows, you need to make sure that employees’ interests are aligned with the company’s,” Whitehead says. Whether it’s offering equity for senior talent or having decent-sized share options across the company, it’s worth having attractive incentives to ensure staff remain committed as the company scales. “Incentivising them just on salary is fine but if you really want them to be up all night trying to grow the business, then you want them to have a piece of the pie,” he adds.
Making sure a scaling company’s pool of talent doesn’t become too homogenous is also important. “Organisations really need to be as diverse as they possibly can when they’re recruiting,” says Janet Coyle, managing director of Silicon Valley Comes to the UK, the international mentoring and events organisation. “You want to try and avoid groupthink, so you need to recruit from different backgrounds, experiences and outlooks.” This isn’t necessarily purely about diversity in terms of race, gender or sexuality but also about introducing a range of perspectives and ways of thinking into the company. “Scaleup founders shouldn’t always look to hire entrepreneurs like themselves,” she says. “They need to bring in a slightly different skill set.”
However, having grade-A staff that can bring new perspectives and ideas into a scaling business is only of value if founders can learn to trust in the talent they’ve put in place. “To begin with, the CEO basically makes decisions on every aspect of the business,” Whitehead says. “But it comes to a point where they have to delegate.” Learning to grant a degree of autonomy to the teams you’ve hired sounds simple but for a founder who’s used to being so hands-on with every element of the business they’ve built, it can be a difficult transition to make. “Much of it is down to genuinely empowering staff to make the decisions that they need to in order to make the business really successful,” adds Whitehead.
Talent isn’t the only vital ingredient that a company needs to scale: laying out the company’s culture is also key. As a founder becomes less able to oversee every element of a company themselves, it becomes essential they are able to formalise their vision of their startup. Having handled culture and employment branding at Facebook as it grew from 500 to 5,000 employees, there are few better placed to comment on how enshrining culture can help shape what a company will become than Molly Graham, now COO of Quip, the productivity suite company.
“Very frequently in startups, the personality of the company and the personality of the founder are inextricably linked,” says Graham. Being able to outline exactly what shapes the spirit of the company and what it wants to achieve can help insurmountably as a startup continues to scale. “You need to write down things that you want everyone to internalise; that you want every single person that comes into the organisation to live and breathe,” she continues.
Whilst formalising culture might seem a bit excessive for a team of 20 who see each other on a daily basis, having this built in at an early stage can prevent serious growing pains down the line. Graham has worked with plenty of CEOs who haven’t been prepared for the cultural transition between 30 and 60 employees. “They just have this deer-in-the-headlights look,” she says. “But those who have taken the time to think about who they are and who they want to be tend to hire better and can much more effectively scale their operations.”
Another potential challenge for startups looking to scale is ensuring that one hand knows what the other is doing. “When staff are all located in the same place, it’s relatively straightforward,” Coyle says. “It’s when businesses start scaling internationally that they need to make sure that they maintain a really strong method of communication.” Making use of tools like Skype, FaceTime and Google Hangouts and ensuring that the relevant parties make regular visits to offices overseas helps ensure various segments of the business feel wired in to the overall culture. “Especially when things are changing rapidly, the main thing is to keep your international staff feeling they’re very much part of the team,” Coyle adds.
A concern for any business that’s looking to scale is potentially losing the very agility that sets it apart. But if a company is able to hang on to an openness to innovation at every level – even as it introduces more processes – then this needn’t be a problem. “If you have people with that entrepreneurial spirit who are keen to solve problems, find solutions and think outside the box, it helps keep that entrepreneurial spirit alive,” Coyle says. “That’s how those companies will scale and grow to another level.”
Nevertheless, perhaps the most important thing for any business looking to scale is to plan for growth. Ensuring that certain traits are built into a startup’s DNA means they will naturally be replicated as it grows. Graham compares laying out the foundations of a company to the formative stages of human development, during which a lot of our personality is fixed. “The infancy phase, the toddler phase and the teenager phase are extremely important,” she says. “You can change a company later on in its life but it just requires a lot more effort, self-awareness and work.”
Ultimately, whilst scaling up can be hard work, putting just a few provisions in place can help today’s small businesses become tomorrow’s giants.