Moving From Startup To Scaleup

Congratulations! You’ve survived all the sleepless nights and the exhausting demands of getting your startup off the ground. Now your brand is attracting attention, money is coming in, and you’re scaling up in size.

 As your company emerges from its “salad days,” you’re about to face some new challenges. Scaling up requires you to rethink the internal processes you’re using. What worked for five, ten, or even twenty employees simply won’t work for a workforce of fifty (and counting).

 How do you minimize the growing pains your company is about to experience? As always, preparation is key.

 The Unique Characteristics Of A Startup

 Startups are different from more mature, established companies in a myriad of ways -- and that can quickly become evident when you begin scaling up. Unlike larger, established companies, startups have:

 ●     Fewer formalities: When your entire staff can fit around a table and your customer base is still very limited, there’s very little need for formalities and traditional business structures. In fact, a lot of policies and rules would likely impede your progress.

●     Broad expectations: In a startup, everyone wears many hats out of necessity, so job descriptions are loosely defined (if at all). True managerial hierarchies are usually non-existent. Everyone looks directly at you, the owner, for guidance on every issue.

●     Low-maintenance culture: You may have started your business with your partner, your best friend, your brother, or your college roommate. Maintaining the company culture is easy because you knew everyone was a good fit before they started -- or they wouldn’t be there.

●     Effortless communication: When a company-wide announcement can be handled over dinner, communication is simple. If something’s unclear, it’s easy enough to answer the questions as they occur.

 When does all this change? Every company is different, but for many it starts around the time you hire someone who isn’t a friend or a relative. You may find yourself struggling to articulate company policies because you’ve never defined them -- personnel issues have always been handled as they arose. Whatever provokes it, you suddenly realize that it’s time to stop thinking of your company as a startup if you want to create a sustainable business.

 The Problems That Come With Scaling Up (And What To Do About Them)

 On the surface, scaling up seems like a thing to celebrate. You’ve worked hard to reach the point where your company can afford to hire new people and needs a formal organizational structure. Your brand is thriving and growing.

 Unfortunately, not everyone at your company may feel like celebrating the organizational changes that need to happen. You may not even feel that way. There’s a reason that 30% of the nation’s CEOs site “scaling up” as the biggest headache they’ve had to overcome.

 Here are the biggest personnel issues you’ll face as you start the process and how to overcome them:

 The Problem: Resistance To Change

Rules, procedures, and chains of command are necessary to avoid conflicts, but your original employees may find it difficult to adjust to an organized system. Nostalgia for the early days where everyone pulled together and focused around a common goal is natural.

 Your original employees may not understand, for example, why they can’t still automatically leap in and start changing a product design or ad campaign without going through the right channels or approaching the team that’s now in charge of that part of the company.

 The Solution:

First, understand that everyone in your company is affected by the changes you make. Resistance is natural, especially since many employees may begin feeling insecure about their place in your organization. There are, however, several key steps you can take to manage the resistance you encounter:

●     Clearly communicate the rationale behind each change you make.

●     Give your employees an opportunity to contribute to the organizational changes.

●     Stay open to feedback on how changes are perceived by employees.

●     Remain willing to adjust the changes according to the feedback you receive.

These steps allow your employees -- old and new alike -- some control over their own jobs, which is one of the main ways that people find satisfaction in their work. In addition, you’ll encounter less resistance if your employees understand the need for the changes. That helps overcome resistance based on the idea that what has “always worked” could keep on working in the future.

 The Problem: Trouble Maintaining The Company Culture

Preserving your company’s culture is another thing that becomes difficult as your company grows. You want diversity, but you also need hiring policies and programs that help you find employees who fit your brand and enhance the company culture, not detract from it.

 The Solution:

Keeping your company’s culture intact starts with the hiring process and continues well into a new employee’s first year on the job. Here are the most important things you can do:

 ●     Put your company’s culture into words. Sit down and describe the culture that you have and want to maintain as if you were describing it to someone who has never been there before. That will help you craft job postings that will actually attract your ideal candidates.

●     Don’t rush the hiring process just to ease the workload. Try to weed out the applicants who are just looking for any job that will pay their bills. Look for employees who seem to fit and want to be there -- otherwise, you’ll have a turnover rate that won’t help your goals.

●     Use mentors for new employees. Not only can mentors help with the training process for new employees, they can help acclimate your new hires to the company culture and show them how to fit in.

 Remember: your company’s number one resource is the people who work there. Scaling up is largely about developing that resource.

 The Problem: Difficulty Delegating Authority

Entrepreneurs sometimes find it difficult to step back from a central role and start delegating -- which is something that is easy to understand. After all, when you started your business, you were in the center of everything -- from product development and mobile web design to marketing campaigns and customer service. Letting go can be hard.

 The Solution:

If you want your business to have long-term success, you have to eventually take a more managerial role and place trust in your company’s future leaders. There are several ways to start down that road:

●     Identify key employees that you believe have good leadership potential and move them into position as managers or team leaders.

●     Practice effective communication. When a company is small, you can directly communicate with everyone. As you grow, you have to strike a balance between the open-door policy you’ve always had and the need to communicate with your key people first -- before messages go out company-wide.

●     Put a rewards system in place. You want your employees to feel like their hard work is recognized because that encourages them to care more deeply about your company’s success. Performance reviews are essential components of a thriving business. If you tie them to a modest reward, you give your employees an extra incentive to do their best.

 As your role inside the company transforms, remember this: your employees are watching. The confidence you project onto the people you choose as leaders within your organization will help other employees feel secure about your company’s long-term prospects -- and their own.

 The Takeaway

Scaling up is only partly about the implementation of a formal organizational structure and hiring process. A large part of scaling up is changing your focus away from “getting the product out there” to “building the company.” You can only accomplish that goal by investing your time and energy in your employees.

 To effectively manage the challenges you face scaling up, you have to balance the needs of the company against the needs of your employees every step of the way.