Organizations, particularly startups, require changes in executive leadership talent in the business lifecycle to capitalize on growth potential. Sometimes CEOs are late to make the necessary executive team changes, which comes at a cost. Today, I’d like to share some examples and critical considerations for companies that fit in this category.
NerdWallet is an example of when the rapidly growing company missed profitability targets and subsequently changed its leadership team. In 2017, CEO and Founder Tim Chen decided to reshape its senior leadership by bringing in five new executives. One year later, NerdWallet boasted a 300+ strong staff and posted better numbers of well over $100 million in revenue!
The new talent in the executive leadership team helped NerdWallet immensely with its ambitious scaling efforts, including making two major acquisitions while maintaining its almost impeccable streak of profitability. But it’s far from the only startup that has resorted to overhauling its executive leadership teams to scale at a viable pace. This underscores the importance of linking business strategy to talent strategy, ensuring the organization has the right talent to meet its strategic objectives.
You could look at another impressive example in Spotify. The Swedish audio streaming service went on an executive hiring spree to remain agile at scale, allowing the $2-billion music tech company to maintain its capacity and drive to innovate.
These two examples alone clearly highlight how vital it is for any scaling startup to reassess its executive leadership as they grow and their business strategy refines continuously. The reason for doing so may vary from one startup to the next specifically, i.e., which roles and when, but agile growth should be at the forefront of all CEOs’ minds.
So, what type of competencies should CEOs consider as they seek out new talent for their growing startups?
- First, learning agility. There are many factors founders should keep in mind when they scale up their leadership teams, but none is as crucial as learning agility. After all, no two startups are the same, as each brings a new set of challenges and opportunities to the table. An executive in these scenarios must be mentally agile to dissect new, complex problems facing the startup and seek opportunities for growth at scale. Due to the nature of startups, they often have to deliver results in novel situations and with limited resources, and a learning-agile executive can continue to learn on the fly while inspiring and motivating teams to rise to the challenge of executing.
- Second, self-awareness. Every startup deserves a team of self-aware executives. Emphatic people who know themselves inside and out help them shape the team around them, complimenting their strengths and bolstering their areas for development. Understanding their impact on other people and their abilities can develop themselves, their teams, and the startup.
- Third, excellent listening skills. Great startup executives should also know how to listen actively. Rather than bombard employees with directions, they should embrace two-way feedback, particularly in fast-moving situations. They make time to hear others out and gather their thoughts. A tap on the shoulder to look left while everyone is looking right may be just what is required to seize new opportunities or course correct.
- And fourth, resilience. As most startups emerge from the scares of the recent COVID-19 pandemic, founders have learned that resilience can go a long way when coupled with emotional intelligence. It’s an essential skill in times of crisis and disruptions, which almost every startup goes through at some point during the scaling phase.
In conclusion, I’d like to share three tips to revamp leadership talent and enable growth for startups.
- Showcasing company culture: Even with a small, growing team, startups can recruit better by putting their company culture front and center. Bento, an expense management software startup, strives to showcase that its employees “love sharing, helping and lifting others.”
- Consider ‘culture-add’: The best startups recruit senior leaders who bring culture-add versus culture fit. Startups should aim to bring executives that add to the culture instead of fit into it. The opportunity to have a more prosperous and diverse culture can support innovation. Startups like Fig communicate culture add through celebrating employees whose actions embody company values.
- Working with a talent partner: Smart startups know that a retained executive search firm offers various advantages. As a talent partner, they can support the organization for a long time and are committed to aligning talent to the business strategy versus simply filling a ‘slot.’
