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Leading at the Speed of Growth was recommended to me by Rich Hagberg. He’s advised over 5,000 executives, including execs at companies like Dropbox, Facebook, Twitter, and Quora. Now he’s working with us at One Month.
In my opening meetings with Rich, he strongly recommended this book to both me and my co-founder. It’s only about 120 pages long, and there are quite a few diagrams and block quotes along the way, so it’s not all that dense. It’s a fairly speedy read.
In this episode I’ll give a summary and highlights, and read some excerpts from Leading at the Speed of Growth.
Who wrote Leading at the Speed of Growth?
- Katherine Catlin & Jana Matthews. Partners at the Kauffman Center for Entrepreneurial Leadership
What is the Kauffman Center?
- A foundation to enable many more entrepreneurs to be great leaders of growth companies.
- It was started by Ewing Marion Kauffman (born in 1916).
- With an initial investment of $5, Kauffman started a pharmaceutical company in the basement of his house in 1950.
- Kauffman gets rich, yadda yadda, makes billions. And then later recognizes, “The health of our economy is dependent on the ability of entrepreneurs to grow companies and was convinced that the best way to help entrepreneurs is to identify and teach the knowledge, skills, and values that contribute to entrepreneurial success.”
The book is comprised of advice from Kauffman and over 500 other entrepreneurs who reveals “the secrets of successful leadership and sustained growth.”
What is the book about?
This book will outline the problems that you will likely have when building your startup into a full fledged company. So what’s nice about it, is it’s saying “Hey! These are normal problems that you will have. Therefore these are things that you can expect, and plan for before they happen.” By knowing common pitfalls, hopefully you’ll be less reactive, and more strategic when addressing your company’s growing pains.
It does this by outlining the 3 stages of a startup, red flags for each of those stages, and some tips for fixing common problems.
For example, if you find that the original culture of your startup is changing dramatically, that the small-family feeling has disappeared and people are missing it, that’s normal at the rapid growth stage, and there some ways you can proactively train yourself to overcome that.
Who is it for?
- The book speaks to CEOS directly. Quite often it says, “As a CEO…” and “I heard from other CEOs” etc.
- I ALSO think it’s also for anyone who is startup-minded and entrepreneurial. I think it’s for people who are leaders within their company (head of product, creative directors), as well as anyone working at a company who might not be explicitly in a leadership position, but who would like some insight into how the challenges facing their CEO or superiors.
What’s the main gist of the book?
The main idea that there are three stages of growth that startups go through:
- Initial Growth
- Rapid Growth
- Continuous Growth
In this episode we’re going to go through the first 3 chapters of the book together. (Roughly 68 pages).
Why these three? Because, it’s my assumption that there are more small companies and people in those two buckets of either initial growth (just getting started with a startup) or rapid growth (having some success with a startup, but not quite sure how to continue growing. As the book says, maybe you’ve a) hit a wall, b) plateaued or are doing c) the death spiral, when what you really want to be doing is growing.
So right up front, on page 10, the main idea of the book is shown with one diagram, called “Evolution of your Role As CEO.”
What will I cover in the podcast?
Initial Growth + Rapid Growth.
1. Initial Growth
In this stage the company is very sales driven.
Your focus is:
- Developing and launching a great new product or service into the market
- Being noticed for offering something different
- Gaining visibility by winning over some impressive customers, which helps convince more and more customers to try your product
- Trying to capture market share
- Growing revenues
Red flags:
- There’s not enough time in the day. The people who want and need your time can’t seem to get it.
- Even though you feel you’re still the best person to make decisions in the business, it’s becoming physically and emotionally impossible to do everything that needs to be done.
- You wake up worrying about operational tasks that someone else ought to be handling.
Initial growth is going from an idea to a strategy.
You must change from Doer and Decision Marker to Delegator and Direction Setter.
To that extent, when you feel the pains of Initial Growth it’s time to stop making all the decisions, it’s time to stop answering all the questions, it’s time to put trust in other people, and develop a strategy that goes beyond today, beyond this week.
“It was only when we said NO to some new business opportunities that we realized we had a real focus and a real strategy.” (24)
Habits to Break
1) Shooting from the hip
Working without a plan and chasing every new opportunity that comes along are signs that you are shooting from the hip.
2) Resisting structure
A plan and a structure can liberate, rather than constrain you.
3) Resisting the development of processes
Very few people like to spend time reinventing the wheel, and they hate to spin their wheels. Setting priorities through an accepted planning process achieves “buy-in” much better than the “idea of the moment” or “strategy du jour.”
2. Rapid Growth
It’s a new stage of growth, and with that comes new goals for your role and the company.
Your focus is:
- Become the market leader
- Ward off competitors
- Build a management team
- Hire and integrate lots of people
Red flags:
- You realize that product and market development must expand because customers are demanding more from you.
- You start to feel competitive heat as other companies begin to recognize and respond to your presence in the market.
- You find yourself longing for true experts because there are big gaps in the company’s areas of functional expertise.
- You want to mold your management team into a well-oiled machine, but you’re not sure of how to do it.
- The culture is changing dramatically. The small feeling has disappeared.
Rapid growth is all about Team Building.
That requires you to look at your weakness (personally and as a team) and hire people to fill those gaps. It requires you to be a coach, a planner, and to facilitate better communication within the team.
Advice on being a better Coach
“You have to get into the position to say to all your team members, ‘You’re running this thing, and I’m standing behind you. But this is what I’m seeing. And maybe some feedback will be helpful.” You need to learn how to critique what they do without criticizing them.” (42)
Advice on being a better Planner
“The single biggest thing in enabling our fast growth was getting people to understand what our advantage really was, and why it was a sustainable advantage. The next was building a set of strategic objectives that people could see we could win at, and win at consistently. And then having a clear positioning. Sales-driven strategies are important at earlier stages of a company’s life, but if you’re totally sales driven you end up reacting to every opportunity.” (43)
Advice on being a better Communicator
“[At our orientation program] I get up there and say ‘What’s a corporation? What’s the purpose of a corporation?’ And I find almost nobody knows the answer to those questions. These questions are really basic. You ask people, and the first thing that comes out usually is ‘make profits.”’ Or it’s ‘serve the customer,’ and you usually get this disjointed list that makes you realize that people come into work every day and dont’ know what the purpose of an organization really is.
I take them through this exercise because I think it’s important for them to understand the definition: “A corporation is simply an organization that serves a constituency.” And then I have them brainstorm what the constituency is of an organization, and then we come up with six: employees, stockholders, customers, vendors, partners, and community.
We also talk a lot about financials not being the most important measure. At our company the most important measure is getting the right things done well. That’s our measure of success; and it has to do with products and services for the end market, and it has to do with building the organization.”
On giving authority to experts:
“You have to get the heck out of the way if you’re going to let someone grow into a position of leadership.”
On teamwork:
“Success in building my team has been 80 percent in the recruiting.”
3. Continuous Growth
The goal here is to “Dominate the industry.” Continuous growth is the 3rd (and final) stage of the startup framework. I’m not going to cover it here, so please read this chapter in the book if you’d like.
4. Entrepreneur’s Guide to Top 10 Common Pitfalls
1. Not knowing what to expect
Some crises aren’t necessary (such as growth in hiring, financials, and building infrastructure); these are things that can be learned.
2. Thinking that difficult issues are part of normal growing pains and thus unavoidable.
Some problems are normal (and those are the ones Kaufman addresses in the book), but many aren’t normal. This book is your map for uncovering the common problems ahead of you, and it encourages you to be proactive so that you can avoid crises before you hit a wall.
3. Thinking that past behavior will ensure future success.
The habits of your initial growth aren’t going to be the same in rapid growth, or continuous growth. So, you have to change with your company.
4. Being unaware of how others perceive you.
Some leaders are blind to how others see them.
5. Not listening.
You need to balance your self-confidence with a willingness to listen to, and incorporate, other people’s perspectives.
6. Failing to focus the company.
You need to make a plan, and you need to make hard choices about strategy.
7. Not communicating enough.
You need to actively work on your communication skills by reading and talking with coaches, mentors, and friends who have experience leading a company. Leadership is not a quality you are born with, you have to work at it. And as we’ve seen, it’s constantly in growth.
8. Mismanaging new hires.
Delegate appropriately, and hire people based on their values first, skills second.
9. Avoiding tough decisions.
Don’t do it!
10. Failing to add new skills and knowledge to your entrepreneurial repertoire.
You need to grow with your company! Keep learning new skills, and new knowledge.
Discussion Questions for the Reader:
- What stage is your company at? Why?
- What are some red flags listed here that resonate for you at your company? Are there any “red flags” that you’ve felt at your company that you’d like to add to this list?
- Why is process important?
- What is your company’s unfair advantage – something that your company is better at than anyone else?
- In Peter Thiel’s book Zero to One, he defines an unfair advantage as something that must be at least 10 times better than its closest substitute in some important dimension to lead to a real advantage. That can be accomplished by providing a 10 times more superior design (as Apple has), 10 times more selection (as Amazon had done with online books), or making a service 10 times better (Paypal made buying and selling on eBay 10 times better). Is your company’s unfair advantage 10 times that of your competitors? If not, how can you imagine creating a 10x unfair advantage?
- What’s a corporation? Who does it serve?
Bibliography:
Title: Leading at the Speed of Growth: Journey from Entrepreneur to CEO
Author: Katherine Catlin
Hardcover: 160 pages
Publisher: Wiley; 1 edition (May 15, 2001)
