Scale-Ups: Managing the Cultural Shift Pt2

Part Two: Building the Right Team

In the first of five articles in this collection of musings on managing the cultural shift on the scale-up journey I shared my thoughts from the past 25 years on the importance of empowering others. This second article captures my perspectives of building the right team.

Building the right type of high-performing team is a critical component of scaling up a start-up quickly. However, navigating the complexities of team building can be challenging, and entrepreneurs often make crucial mistakes along the way. In this article, we will explore five common pitfalls that I’ve observed start-ups encounter when building their teams. By understanding these challenges and implementing effective solutions, founders can ensure the successful growth of their businesses.

For those of you that haven’t worked in the start-up or scale-up world, some of these observations may seem either blindingly obvious or not relevant. This will be a view without context. For those of you that have had the roller coaster thrills of this entrepreneurial environment, much of this will, no doubt, resonate with you.

The Two Mistakes: Holding On and Clean Sweeps

Striking the right balance is key: leveraging the experience and expertise of loyal employees while infusing new talent and skills into the team gradually

When it comes to building a team for the scale up phase of a new business, two mistakes at the extremes can hinder growth. The first mistake is holding on to too many of the original team members for too long out of pure loyalty. While this loyalty is valuable, the skills and, more importantly, the adaptability required in a rapidly growing start-up may evolve beyond their capabilities. The second mistake swings to the other extreme by conducting a clean sweep, replacing the entire team with new talent. While this may bring in fresh perspectives, it can result in a loss of institutional knowledge and disrupt the cultural fabric of the organisation. Striking the right balance is key: leveraging the experience and expertise of loyal employees while infusing new talent and skills into the team gradually.

Emulsification: Getting the Blend Right

Introducing new talent into a team of long-standing, loyal employees can create divisions if not managed effectively. It is crucial to foster an inclusive environment that values diverse perspectives and encourages collaboration. New employees should be given a clear understanding about the expectations of them to build on past successes without throwing the baby out with the bathwater. Long-serving employees must understand that embracing positive change is vital for the future success of the organisation. Communication, collaboration, and shared goals play key roles in integrating new talent effectively. Encouraging open dialogue, fostering a sense of belonging, and promoting cross-functional collaboration can help bridge the gap between long serving employees and new hires, creating a cohesive and high-performing team.

Introducing new talent into a team of long-standing, loyal employees can create divisions if not managed effectively

Developing Existing People Ahead of the Curve

While hiring new talent is essential, it is equally important to invest in the development of existing employees. Start-ups should prioritise developing their people ahead of the curve, particularly in leadership skills. Long-serving employees should not be allowed to simply move into leadership roles as a reward for their service or without undergoing the necessary training and development. I will repeat this point because it is so important: It is imperative that long-serving employees transitioning to leadership roles are not permitted to abdicate their personal leadership development because of their tenure with the organisation.

Long-serving employees should not be allowed to simply move into leadership roles as a reward for their service or without undergoing the necessary training and development

This development doesn’t have to be just sending them on training courses, although training does have a role. The real value will come from coaching, mentoring, and creating stretch through exposing them to new challenges (with the appropriate support of course). This approach not only helps retain valuable institutional knowledge but also fosters a culture of continuous learning and growth. It can also set people on their way to careers that they never dreamed possible – what a great legacy for any organisation!

?It can also set people on their way to careers that they never dreamed possible – what a great legacy for any organisation!

Hiring Behind the Curve

Scaling up can tempt start-ups to hire new talent too early. While growth requires expanding the team, it is crucial to strike a balance between bringing in specialised expertise and preserving the start-up's agility and innovative spirit.

The risks of hiring talent too early include a softening of the organisation as jobs risk becoming a little to comfortable; silos being creating because people are allowed to focus on just their job; and non-essential work being created to fill any downtime. This is, of course, in addition to the financial impact of increasing overhead. For clarity, I’m not advocating stretching the business to breaking point before hiring a new person. It’s about finding the appropriate time with a strategic and cultural consideration for when this is.

Adding Specialism Without Creating Silos

Bringing in new people, especially people that have come from larger organisations, comes with both a benefit of deeper knowledge and experience of a particular subject and a risk of silos being formed

Bringing in new people, especially people that have come from larger organisations, comes with both a benefit of deeper knowledge and experience of a particular subject and a risk of silos being formed. As the organisation starts to edge away from generalist to a more specialist environment it becomes easy to fall into the trap of each function focussing on its own agenda at the expense of the wider business agenda. One way to avoid this is by creating clarity for the organisation’s leadership team that their first priority is the team that they are part of (the leadership team) followed by the functional team that they lead.?Patrick Lencioni talks about this here.

Conclusion:

Building the team as the organisation moves through the scale up phase of its lifecycle needs to be planned strategically and carried out in a measured way. Of course businesses need to remain agile to respond to challenges and opportunities, but too many reactionary team-building decisions risk creating a ‘Frankenstein’ organisation with bits bolted on in isolation of the wider cultural perspective.

Coming next: Creating Accountability

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