What happens when you’ve successfully completed a big round of fundraising, launched a popular new product or otherwise uncorked some revenue magic. “Welcome to hypergrowth”, says Tim Schigel, Founding Partner of Refinery Ventures and guest writer for this Entrepreneur.com article.
You’ve been working in an office with five or six people, and you’re about to be in charge of a team of 50, or 500. Previously, you’ve been able to interact with your customers daily. But, you’re about to scale your platform to serve millions. People under your leadership are starting to think more about their careers rather than aligning their personal goals with the company mission.
Hypergrowth is a new world. A world that, as author Bob Johansen notes, is comprised of volatility, uncertainty, complexity and ambiguity (VUCA). Even for those who have been there before, this stage of business development presents new, unforeseen challenges every time.
Hypergrowth creates chaos, and providing leadership to a company in this stage is not simply replacing chaos with order. This should be done for certain routines and tasks, however in many ways you should be provoking chaos, managing it and using it to propel you forward. This is where growth happens. To succeed you’ll need to become vulnerable and be honest with yourself about some very difficult questions.
These are the three questions I ask every CEO entering the hypergrowth stage:
1. What are you obsessed with?
Leadership is obsession.
Investors want leaders who are obsessed: obsessed with solving a problem, serving customers and enabling employees. Your obsession has probably been central to your success so far, and it’s been relatively easy to align your team around that clear mission.
In hypergrowth, this becomes extremely unstable. There will be tons of growth in a very short amount of time, bringing in new faces and new dynamics. Instead of being able to focus on building your product, you’re now being pulled in a million different directions: spreadsheets, board meetings, media interviews, payroll, new roles to fill and more.
The one thing that needs to remain stable is your obsession. As CEO, it’s your job to ensure that employees share, and are aligned with, your obsession.
If you can’t articulate your obsession, how will anyone else on your team know what to do? It should be communicated daily, at every meeting, in every email, at every all-hands. “This is what we are obsessed with, this is our North Star and every decision should be measured against it.”
This approach works. Just ask Amazon about its customer obsession.
2. What do you need to grow as a leader?
If you’ve entered a hypergrowth moment and are saying to yourself, “I know how to do this,” then you’re already in trouble. The biggest reason for failure at this stage is comfort.
If you aren’t growing as a leader, then your company won’t grow — and neither will your employees. You have to be honest with yourself about what you can and can’t do now that you’re the head coach of your team instead of the point guard.
Admitting your shortcomings makes you human, which enables honest and open dialogue across the company. You need advisors that are aligned with your mission, but are also able to be honest and critical when it makes sense. You should build an intimacy with board members, not just present a stream of spreadsheets once a month.
To be human is to admit that you can grow, no matter how comfortable you think you are. Chaos can push you forward when it’s managed well, but if you think you’ve got it all figured out it will quickly overtake you.
Take a cue from Socrates, who is attributed as saying: “The only thing I know, is that I know nothing.” Socrates would have made a great hypergrowth CEO.
3. What do you need to leave behind?
The path to growth is not a straight line.
When you’re serving 500 times more customers than you were a few months ago, you simply won’t be able to take everything with you. Perhaps you previously sat with your customer service reps every day; now that’s no longer possible. It is important to be creative and invest intentionally in ways to keep employees informed and engaged with the customer as you scale.
For instance, Ben Chestnut, the CEO and founder of MailChimp — which now makes $400 million a year in revenue — still meets with customers on a regular basis. But, he also recognizes that other employees need to have the same kind of access that he has, and so the company has invested heavily in getting to know its customers, sharing this data with everyone on the team.
Rather than just saying you’re letting something go, perform a ritual to memorialize that your organization is leaving one stage for a new stage of growth. Ask every employee to contribute to a physical structure, or piece of art, with the things they need to give up in order to grow. Make it a tangible moment that you and the company will remember. Then, think about how you will keep the company aligned to the same mission, but at scale.
You can still engage customers and keep the company focused on your obsession, but it will require letting go of methods that are untenable. Find new processes and new platforms that will keep the mission explicit.
Jeff Bezos leaves an empty chair at every meeting to represent the customer. It probably felt awkward at first for anyone in the room, but it kept the mission clear. And even though Amazon is now an industrial giant, it has maintained its core obsession and been able to prod its leadership and employees into continued, sustained growth.
Becoming Stretch Armstrong
Hypergrowth CEOs are pulled in every possible direction; this is the reality of their world. It reminds me of the Stretch Armstrong toy from the ’70s. The key isn’t to hold on tightly and try to maintain control. It is to bend and stretch and grow, to remain strong without getting pulled apart.
Hypergrowth requires leadership that is prepared to thrive in adversity. That’s how leaders are built: constantly facing decisions, pushing people to do uncomfortable things, but managing the tension between values, principles and scaling.
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