The nature of a rapidly-expanding business means it can be hard to find the time to pause and review leadership capability. But without the right people in place growth can quickly fizzle out. Boards must review their top teams for energy, self-knowledge and the ability to take operations to the next level.
In
Research conducted at
Criticaleye’s 2018 Private Equity Retreat, 84 percent of business leaders said their management teams were too inward-looking and focused on the day-to-day. Reflecting on this,
James Boot, Senior Relationship Manager at Criticaleye, believes a key driver of success during high-growth is the ability to balance the short and long-term needs of a business.
“When things are moving at pace there clearly needs to be a focus on execution, but it’s a mistake to become overly tactical,” James says. “Leadership teams still need the foresight to carve out time to reflect on the future direction of their business.”
Janet Musgrave, a Director in BIE Executive’s HR team, finds that one of the early pressure points in high-growth businesses can be a short-term approach to organisational design. She says: “When you’re growing quickly, you need to step back and think about what the organisation will look like in twelve months.
“Unless you take that time to reflect and put plans in place, an organisation can quickly become dysfunctional and performance will suffer.”
Mark Hinds, CEO of Polymatica, says leaders also need to have a ‘beginner’s mindset’ and be willing to learn. “If you’re going to operate in a high-growth business, you’ve got to be prepared to re-invent yourself quite a few times along the way, and know that you don’t have all the answers,” he says.
For Mark it’s about your personal capacity to drive things forward: “You have to have an incredible amount of energy, while at the same time not pushing so hard you burn the company out.”
Nick Burns, Chair of creative technology agency Engage Works, and former CEO and then Chair of Capita Employee Solutions, says leaders need to be self-aware. He explains: “In one of my earlier businesses, where a PE house took on a controlling stake, I started to realise that one of the main blockers of growth was me.”
Nick recognised he was too controlling. “I was constantly worrying about the PE house, the clients, the staff and the market dynamics. So, I had to step back. I had to accept that I should hire people with different skills to me. Better skills.
“That would enable me to focus on my strengths and look up and out, and accept that they would run the business day to day, in their own way, but with clear direction and purpose from me... [T]hey wouldn’t do things the way I would, but clearly my way wasn’t always right.”
Nick says this move altered the dynamics of the business fundamentally and supported a successful exit three years later.
Talent Management in High-Growth Businesses
Devyani Vaishampayan, NED of BQF, believes HR executives should ensure leadership capability is well defined and managed. “An important aspect of the HRD’s role is facilitating discussions between the Chair and CEO on key skills needed for the business to succeed over the next three-to-five years,” she says.
This might be ensuring that a business planning to expand globally has leaders with experience of operating overseas, or that all members of the leadership team – well beyond the CIO – understand the implications of digital disruption.
The review and assessment of leadership capability need to be continuous, as well as evident throughout the various talent processes. Devyani explains that, as a Group HRD, she made sure boards reviewed their senior leadership capability every quarter: “The first quarter it would be 'performance' to ensure current operational requirements were being met through the right skills. In the second quarter it was 'succession planning ', where the Board had a good look at leadership capability needed over the next three-to-five years and the risk of any gaps.
“The third quarter focused on 'development' efforts – particularly the organisation's approach to building talent internally. Finally, the fourth quarter looked at the link between rewards and bonuses, with a particular emphasis on behaviours and values.”
When you’re looking to strengthen talent by recruiting externally, it’s important not to compromise your standards. This can be a particular problem with hard-to-recruit roles, where the talent pool is limited. Mark explains: “When you hire people in a fast-growth business who are simply ‘okay’, it creates problems. The first is that they can think they are much better than ‘okay’ and want to progress quickly. The second is that, if you are managing them, you may find yourself having to do a lot of the work yourself.”
Even with talented people in place throughout the organisation, the pressure on leaders, and the CEO in particular, remains. According to Mark, this can be particularly acute when growth slows: “It requires huge resilience, as high-growth businesses will have bumps. It’s inevitable. You’ve got to realise that it’s not the end of the world, but it can feel like it at times, especially when you’re used to growing at a phenomenal rate.”
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