Early Stage
We characterise ‘early stage’ businesses as anything from seed fund through to series A.
Leaders who succeed at this stage may have an entirely different set of skills to those at the latter growth phase. Many businesses at this stage will be led by founder-CEO’s and founder c-suite teams. These individuals are highly entrepreneurial, usually experimental and not afraid to challenge the status quo, and indeed, may be familiar with taking on a broad set of responsibilities, wearing many different hats on a day-to-day basis. Leaders who succeed in this domain may thrive with a healthy level of day-to-day chaos, enjoying the fact that their roles are not yet clearly defined and specialised, enjoying the freedom which allows them to get involved in the range of challenges faced by the business, solving an array of problems as they go. These are the right blend of skills which can see leaders succeed at going through the early phase of scrappy growth from seed to series A.
However, with each new round of investments, start-ups enter a new stage in their lifecycle, adding further complexity to the dynamics, calling for a different set of skills. Statistics reveal that 50% of startups don’t make it past their first 5 years. 66% of the time, this is due to a lack of investment in the founder's leadership capabilities and/or a lack of support provided to help them develop critical decision-making skills. (Noam Wassermann, The Founder's Dilemma).
Callum Wallace, a member of the Scale Up Collective in Canada provides his insight:
Seed and series A companies are typically led by the Founder/s but have reached the point where they need to augment the capability and skills of their leadership team to build the scaffolding for scale.
John McFarland, Partner, Healthcare Practice, Odgers Berndtson US
Perhaps more than at any other stage, the relationship between Founder/CEO and incoming leader is fundamental to the success of the hire. At this stage, there is simply not enough time for the leadership team to be rowing in the same directions but at a different pace.
At this stage of commercialization, companies often need to look to leaders from companies who can bring the knowledge of ‘what good looks like’ from businesses who have been through a similar journey, but who are further on in their evolution and have achieved their goals. Leaders who bring the experience of working in a more configured setting, combined with the traits commonly found in successful entrepreneurs (staying in the zone, problem seeking/solving, focus, positive mindset etc.) We’ve measured for this through qualitative and quantitative interviewing and by utilizing our proprietary assessment and development tool ‘Leadership Evolved’.
Alongside this, we encourage boards and investors to think beyond just experience alone. Early-stage businesses should want to look for leadership traits that will allow a leader to thrive in moving a company to and through its next stage of growth.
John McFarland, a Partner and part of the Scale Collective in the US added:
When we’re advising our clients on leadership readiness, we talk about three key factors:
- Leadership agility - how well does someone pivot and perform in the face of complexity and ambiguity?
- Organizational leadership - how well do they provide vision and help the organization execute that vision with clarity and success?
- Leading others - how well do they build and develop teams? How skilled are they in interfacing with stakeholders, such as Boards?
Building these disciplines and asking these questions at the earliest possible stage can help set up the business for future success.
