Growth & Leadership Transition: Changing Priorities as Your Company Expands
How do you know if you have the right leaders in place as your company expands? And are you prepared for your next phase of growth? Learn how below!
Initially, most biotech startups are run by the founders and a few members of their network. The executive team will expand as the founders’ ambitions do, and the Board will grow with each new round of funding.
Eventually, though, every company hits a tipping point. The transition from the frantic rush of a small startup’s culture to the slower pace of a mid-sized or sizeable corporate organization can be difficult and almost always requires some changes to the leadership teams. The central problem a startup needs to solve is selling investors on a technology that isn’t yet market-ready and that requires leaders with an excess of both charisma and credibility. Mid-sized companies face a very different set of challenges. They need to define a corporate culture and set of workplace dynamics that lay the groundwork for growth, efficiency, and long-term success.
Drawing on two decades of experience placing Board members and executives at biotech firms on both sides of the Atlantic, I’ve developed a consolidated set of priorities for selecting new leaders as companies transition out of their startup phase and prepare for growth.
Your Ideal CEO
The ideal CEO for a growing company has three essential characteristics.
- The first is the ability to hire or promote an exceptional team of VPs and department heads. That requires both significant industry experience and excellent judgment, as well as an ability to get people working together who might not be a perfect fit on their own.
- Second, the CEO needs to put the systems in place to allow the growing pool of employees to remain aligned on their priorities, the company’s vision, and the “why” behind the work. Startups can get away with all-hands meetings or similar rough-and-ready communication tools, but those quickly lose their efficiency as teams multiply and the company becomes too large for the CEO to have meaningful contact with every employee. The solution is to build reliable, stable expectations for frequent communication between departments, cross-training on critical skills, and cross-functionality within teams. The details are much less important than the clarity of the rules: staying engaged with company culture, goals, and achievements needs to feel like a fundamental part of the job.
- Finally, the CEO has to take the lead in defining a corporate culture that can produce exceptional work. Mid-size companies need to celebrate failure, as they typically rely on agility and quick pivots to give them an edge over their more established competitors. Larger companies need to emphasize precision and consistency in processes – not just QA or review, but also how ideas are documented and how time is allotted between projects and roles. Once a company’s direction is set, the CEO must “live their values” (to borrow a cliched phrase): the need to exemplify the attitude, discernment, professionalism, and teamwork they hope to instill in everyone else.
A final nice-to-have for growth-oriented CEOs is a technical background. While not essential and less important than the traits above, it allows them to make more autonomous decisions and evaluations in some areas.
Your Ideal Board
The first thing to note is that most companies eventually need to re-build their boards. Sometimes it’s a result of shifts in funding or control. Other times it’s a critical response to dysfunction. Even if you escape that particular need, the Board is likely to grow over time.
New Board members need to be ready to support the CEO as the company expands. In part, that means differentiating roles more clearly than you may have done early on: with an increasingly systematized set of processes underlying day-to-day operations, the Board needs to get used to letting the CEO run the company without their involvement. Their job, instead, is to offer perspectives and alternatives the CEO’s personal experience doesn’t cover.
Because perspective is critical, Board members for successful mid-size companies need to put in a significant amount of work. For instance, they need to read the Board slide deck before meetings, think through implications and alternatives, and offer honest assessments. In addition, their views will be more valuable if they have specific expertise with the financial, regulatory, clinical, or personnel issues that the company is likely to encounter. At the same time, they should be more or less up to speed when they join – at least when it comes to the company’s values, mission, and culture. It’s too easy for a CEO to lose productivity by dedicating time to aligning goals with new Board members.
Finally, the Chairperson needs to be someone the CEO has – or can develop – a trusting relationship with. Their role is to be a partner in agenda-setting and conducting the business of the Board meetings. So they need to have the skills to manage a room full of people who are all used to being listened to.
Founders and other leaders tend to discover these guidelines through trial and error, often at a significant cost in time or resources. Companies looking to avoid those pitfalls and find leadership ideally suited to the next phase in their growth should consider bringing in expert help. We’re always here.
Paul Cashman originally wrote this article. Have questions? Get in touch!
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