High growth companies are disproportionately innovative to those that are not, and whilst I believe creativity is the ultimate source of competitive advantage, I must caveat my views. The importance of embedding a culture to allow free thinking that stimulates new ideas is well documented. However, without control you end up with pet projects, loads of possibilities and hundreds of potential initiatives that absorb time, energy and resource. Large companies have processes to deal with their ideas pipeline, but in smaller high growth businesses the danger is that there is too much innovation and entrepreneurship and not enough control and discipline.
Commercial problems potentially loom when there is too much lateral thinking and lack of order. Jim Collins in Good to Great uses a very powerful phrase – “Disciplined Entrepreneurship”. This embraces the notion of balance – innovative thinking and behaviours being guided within a framework of performance measures and KPI’s.
Too much Discipline – then a disconnection with customers, markets and new possibilities takes place
Too much Entrepreneurial Flair – nothing gets done because everyone is bouncing off the walls with great ideas
Successful high growth companies tend to have a disciplined approach to new idea generation and implementation – a form of commercial filter. I often wonder how much smaller high growth companies can teach large corporates about innovative thinking and entrepreneurship. The reverse is also important – how can big companies help ambitious founders gain a better handle on their organisation? Feels like a powerful learning forum!
It seems very much the rage at the moment for companies to hire Non Executive Directors (NED). I am a big fan of these “outsiders looking inside“. They provide wisdom, guidance, help to raise the bar and introduce more robust systems and processes, help leaders make decisions and support change. In many instances an NED can help to open up new doors to finance and potential customers – help in the transition of growing up. If you are pursuing VC funding or PE finance then having a NED is often part of the deal.
One observation would be that many young companies appoint NEDs too early on in their cycle. They view them as the saving grace and the magic wand with all the answers. The reality is young fast growing companies should initially seek out a mentor or experienced person and trial the relationship before Companies House papers are signed. There are many individuals out there searching for NED trophies, it almost becomes their barometer for success – food for the ego!
My message to young growing companies who are seeking their new best friend, the NED, is be sure they can add value, be clear on where they can take you and most of all don’t GIVE AWAY equity, people either buy or earn a stake in your company.
A highly effective team is built when a group of individuals are all playing to their own strengths. All too often the wrong person is doing the right job. In building a team we must strive to place people in the correct position allowing them to do what they do best. When there is a mismatch in a person’s skills and role under performance should not come as any surprise. Great care must be taken to ensure we don’t shoe horn people into situations and roles that don’t align with their capability. This will invariably lead to discontent and disconnection with the teams overall purpose. We should seek alignment between a person’s passion and their ability with the aims and objectives of the group. An important task for all leaders is to keep close to both the individual and team mindset. This is done by gaining insight into an individuals:
- Personal and professional ambitions
- What do they excel at?
- What they don’t do too well?
- What motivates them?
- What turns them off?
- Training and developing needs
We must be clear on what we want members of our team to do, this needs to then be articulated with clarity.
The reality is that whilst people maybe good at specific tasks they may fall short on others. Or maybe as the ambitions and aspiration of an organisation grows, those of an individual may change or their own priorities may shift. This can often result in a person either outgrowing a position or in ambitious environments people can’t keep up – the issue to address is whether to redeploy an individual or support them in gaining new skills and competencies. Successful people remain connected to the emotional, personal and professional needs of their team. By doing this become hard wired into individual and team dynamics – it also helps you to judge and decide on what if any changes are needed. Make sure you have the right people doing the right things, this will only happen when you stay close to individuals in your team.