Scaling your startup can be one of the most challenging aspects of running a successful venture. According to Ranjay Gulati and Alicia DeSantola in an article for Harvard Business Review, it is common for founders to become bogged down by the rapid rate at which startups can grow, leading to missteps that are often not identified until it is too late. Another common mistake founders make when attempting to scale their venture is that they worry about losing control, momentum, and team intimacy, and miss out of alternative avenues for growth. This can prevent them from entering new markets and hinder the development of new products or services.
Moreover, founders who do take the leap, as venture capitalist Ben Horowitz suggests, often lack a clear transitionary framework that matches the rate of their startup’s growth. Gulati and DeSantola suggest that those prepared to manage that growth stand a much better chance of making it long term. The same article identifies four ‘critical activities’ for successfully scaling a venture. We have broken them down for you below:
Defining Specialised Roles
During the early stages, founders tend to take an “all hands-on deck” approach which works in the short term, but as the startup reaches its’ point of expansion can be damaging. New challenges and complexities are presented alongside substantial development, from a growing team to expansive areas of production. This growth should operate alongside new team hires, requiring a more formalised approach, inclusive of distinctive and cogent roles, rather than the generalised approach founders tend to take at the outset. Though it will require a level of open communication and sensitivity given the hard work your initial team has put into the startup, new job descriptions and specialist outside hires will become essential. Hayley Barna and Katia Beauchamp from Birchbox believe that processes such as getting your founding team involved in the hiring process, encouraging mentorships between the generalised and specialised staff, and continuing to promote cross-functional idea sharing and innovation can assure your initial team that they still have a voice. If you create a mutually beneficial learning experience, it will provide the synergy your startup team needs to progress.
Adding Management Structure
Because ‘startups’ are often associated with innovation and novel practices, founders can make the mistake of dismissing traditional hierarchical structures. However, as your startup grows it is important to remember that so do does your team and your departments. Gulati and DeSantola recommend hiring a chain of command to meet the needs of your growing venture. In a recent article, Matthew Prince from CloudFlare discusses the significance of hierarchy when it comes to managing a team. Despite his initial opposition to corporate structure and bureaucracy, he states, “people want feedback; they want direction.” Research shows that clearly delineated roles alongside mentorship and feedback tends to foster productivity and personal development. As Gulati and DeSantola state, “the more decisions people are empowered to make on the ground, the more they learn and the more accountable they become.”
Planning and Forecasting with Discipline
The early stages of your startup can be an exciting period of innovation and flexibility. Founders typically learn through trial and error, but as the venture grows it is important to establish a framework or set of goals to guide your startup. Without a strategic plan of action, founders can become aimless and demotivated to expand as a result. Time should always be allocated to plan and identify best practices, which should then be shared startup-wide to maximise efficiency. Setting clear goals and guidelines, systematically gathering, and sharing information can shed light on performance and enable improved forecasting. This will most likely promote efficient, smart decisions.
Sustaining the Culture
A startup’s culture is a big part of what makes a business unique. It is what motivates camaraderie and a sense of belonging. However, as the team expands, and a reporting chain is established a startup can struggle to maintain a strong sense of organisational culture. Founders can prevent this by continuing to clearly articulate their cultural values in their mission and vision statements. Startups can maintain their unique culture by hiring the right cultural fits and rewarding desired attitudes and actions through recognition and compensation. Team meetings and social engagements can also assist in maintaining a bonded team and unified community.
As Gulati and DeSantola mention, structure and organisation does not spell the “death of spontaneity, adaptability and speed.” Rather tried and tested frameworks can be useful tools in minimising the chaos sometimes involved in scaling a new venture. You can access the full Harvard Business Review article through the link.
Need help? Contact us
At Allied Legal, we work with founders during every stage of their venture, so we understand the factors that drive growth and lead to success. If you need support, or startup-specific legal advice, we are the team to contact. You can connect with one of our commercial lawyers by giving us a call on 03 8691 3111 or sending us an email at hello@alliedlegal.com.au.
You might also like our article Key Challenges of Launching a Startup.
