Picture forming a leadership team that is not only scalable with your company but also actively drives growth. Every challenge your company faces becomes an opportunity for success, all thanks to changing leadership perspectives. But how does one go about molding leaders capable of driving this change?
Most CEOs share a common predicament that can be quite challenging for entrepreneurs: what worked when their company was a $10M company doesn’t when it becomes a $50M company? As companies scale, they outgrow their existing frameworks and require a shift in leadership approaches. An obstructive leadership team can hinder success, but with the right plan in place, your leadership team can be your key to steady, scalable growth.
In this guide, we’ll discuss the key steps to create a leadership team that scales with your business. We at The CEO Project will guide you through growth stages, help you evaluate your current leadership team, define roles to scale, recruit stage-fit leaders, and build talent from within.
Plus, we’ll discuss how to align your leadership team with your company’s vision, establish a culture of accountability, and know when it’s time to upgrade or let go. This article is packed with practical advice and wisdom to help you create a leadership team that can take your company to the next level.
Why Leadership Evolution Matters in Growth
Leadership is not static; it is dynamic, and it must change as your company evolves. Establishing a leadership team that can scale with your business is not just important —it’s mission-critical to long-term sustainability.
But here’s the problem: many companies don’t get it right by changing their leadership team structure as they grow. What works at a $10M company is often the exact opposite of what works at a $50M company.
Why does leadership evolution matter?
- Adapting to Changing Needs: As your business grows, new problems arise. Leadership has to scale, and executives must navigate the varying complexities at each stage of a company’s growth.
- Scaling Successfully: Through the years, companies that don’t adapt their management teams tend to stagnate. A lack of experienced leaders at specific stages can slow growth.
- Promoting Collaboration: Leadership that encourages cross-functional cooperation is key to effective decision-making, efficient execution, and innovation.
When you create a leadership team that grows as your company grows, you are preparing your company not just to tackle new problems but to take advantage of new opportunities.
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Understand the Leadership Needs at Every Stage of Growth
At each entry point in a company’s growth, the needs of its leaders change. These stages — early stage, growth stage, and scale stage — require different leadership skills and setup at each one.
- Early-Stage Leadership
- Growth-Stage Leadership
- Scale-Stage Leadership
1. Early-Stage Leadership
Businesses tend to require hands-on attention in the early stages. The focus is predominantly on survival, establishing a product-market fit, and building a foundation for future expansion.
Focus:
Early-stage companies move fast, and leadership has to be flexible, adaptive, and hands-on in everything in the business. According to McKinsey, 90% of startups fail, and the top reason is a lack of product-market fit. Leaders of early-stage companies need to change directions quickly, collect feedback, and revise strategies in response to market reaction. Surviving those early challenges will ensure favorable results for the company in the future.
Leadership Style:
Leadership in this early phase has to be entrepreneurial. Leaders have to make decisions with incomplete information and a process. As outlined in the book The Lean Startup by Eric Ries, successful early-stage leaders concentrate on agility, rapid testing, and learning as they search for a sustainable business model.
They need to execute and manage risk well, also try new things, and be comfortable with uncertainty. This innovative spirit is essential when tackling the unknowns of starting a new business.
Case Study:
Take the case of Airbnb. In Airbnb’s early days, its founders were forced to pivot fast. They had to switch their business model several times — from renting air mattresses during political conventions to offering fully formed apartments — and strong, united leadership was key to keeping momentum during those transitions. As the company expanded, its leadership moved from hands-on to more growth-focused.
Key Takeaway:
The leadership team in the early stages must be very hands-on, flexible, and able to adjust quickly. They must be entrepreneurial and thrive on making decisions despite an absence of clarity. Their task is to lay the groundwork for the company in the next era.
2. Growth-Stage Leadership
The needs of leadership change when a business crosses a certain threshold of success and begins to scale. As companies grow, they require more distinct leadership to handle growing complexity and promote efficiency. This phase involves scaling both in terms of revenue and team, and you need new leaders to manage various departments.
Focus:
At this point, the leadership team starts to transition from surviving to managing growth. When companies grow past the startup stage, they require great leaders who can develop and optimize processes for related tasks across the organization. These leaders will usually focus on operations, marketing, finance, and product development.
According to a Harvard Business Review survey, 46 percent of CEOs at high-growth companies say hiring people with the right skills to build out the organization is one of their most pressing challenges. So, some businesses hire department heads with deep expertise to scale certain aspects of the business. Leaders at this level must be able to effectively apply strategy to day-to-day decision-making while remaining flexible enough to move with the market.
Leadership Style:
Leaders at the growth stage need to be highly operationally experienced. They should have experience managing teams, implementing processes, and driving initiatives that actually help to scale the business.
Growth-stage leaders must also be strong in performance management and coaching, according to research from the Center for Creative Leadership. This type of leadership emphasizes organizations making complexity, scaling, and coherence among different teams.
Case Study:
For example, Slack, a communication app. Slack grew from a startup to a high-growth company by investing in specialist leadership. They hired executives with experience in growing product development and marketing, and quickly grew to over 10 million users. They led their teams with a vision to maximize their impact, coordinating all departments to align with the mission and scaling up quickly to meet demands.
Key Takeaway:
As your business scales, leadership must become more specialized, and executives manage divisions. These executives should be well-versed in scaling operations and processes. Their sole objective is to keep growth in check and optimize the company’s internal systems for efficiency.
3. Scale-Stage Leadership
As a company reaches the scale stage, it requires a more strategic leadership team. By that point, the company has already established itself in the market and is concerned about more strategic, long-term decisions. Now, management is all about process optimization, innovation, and operational excellence at scale.
Focus:
Scale-stage leadership is less about daily management than about guiding the company in the strategic direction for the future. At this stage, leaders must be able to navigate complexity, lead a large team, and engage more stakeholders, like investors, customers, and partners.
Businesses that can scale in a quick and organized manner grow 2.5 times faster than those that can’t, according to a study by Bain & Company. Leaders at this point need long-term thinking in place to maintain processes, culture, and innovation consistent with the company’s eye on the future.
Leadership Style:
The scalability stage leader should have a strategic vision that can effectively cut through complexity. They need to learn how to handle a team of employees who report to them, to delegate, and make executive decisions that affect the long-term health of the company.
Harvard Business Review also states that scale-stage leaders should have the ability to effectively lead change, as scaling often requires the company to implement new systems and processes to become more efficient.
Case Study:
Amazon perfectly encapsulates scale-stage leadership. As the company grew, Jeff Bezos and his team of executives progressed from leading small teams to running a complex global organization.
Bezos is famous for his ability to think long-term and make big things happen: He created Amazon Web Services (AWS), which was key in helping Amazon grow. Leadership at Amazon is still innovating both by continuing to find ways to operate more efficiently and by driving new initiatives to stay competitive in a constantly changing market.
Key Takeaway:
Leading at this stage takes skill, real vision, and the ability to orchestrate complexity. It should be promoting long-term, organizing the design of systems around how operations work best, and prioritizing innovation in a way that does not encumber the firm’s ability to keep up with a rapidly evolving marketplace.
Understanding the leadership requirements of each stage will help ensure your company has the optimal leadership in place at any given time, poised to support growth and adapt to the challenges that come with it.
Assess the Gaps in Your Current Leadership Team
Evaluating your current leadership state is one of the first steps in assembling a leadership team that will scale with your organization. Are there differences in skills, experience, and leadership style?
CEOs frequently discover that while they were effective at earlier stages, some leaders may no longer be a good fit as the company expands.
How Can You Assess Your Leadership Team?
- Leadership Scorecard: This allows you to assess each team member’s performance against the key competencies and leadership qualities the business needs at each stage of life.
- SWOT Analysis: Conduct an honest assessment of the strengths, weaknesses, opportunities, and threats of your leadership team to guide decision-making for the next steps.
- 360° Reviews: These reviews offer feedback from colleagues, subordinates, and other stakeholders, and enable you to get a full perspective on how they are doing and what to improve.
Performing a rigorous review of your existing leadership group allows you to see if there are gaps in skills, experience, or career trajectory alignment with the company in its current or future state. This will set you up for building an even more scalable leadership team.
Define Roles with Scalability in Mind
With each stage of growth comes new responsibilities for your leadership team. A common challenge for many companies is having poorly defined and overlapping responsibilities, leading to bottlenecked decision-making.
How Can You Define Scalable Roles?
- Org Charts: Develop and maintain an organizational chart that outlines what everyone is responsible for and how their role impacts the success of the business.
- RACI Models: The RACI (Responsible, Accountable, Consulted, Informed) framework is a powerful tool for understanding who is responsible for what, which helps minimize ambiguity and fosters a culture of accountability between teams.
By determining roles with scalability in mind, you can ensure that each leader knows exactly what is expected of them and that there is no confusion about who is responsible for achieving specific results.
Hire Leaders Who Are Stage-Fit (Not Just Resume-Rich)
Hire leaders who are the right fit for your company’s current stage. It’s easy to fall into the trap of hiring candidates with impressive resumes. Still, these candidates might not have the flexibility or vision necessary for later stages in your company’s evolution.
What Makes a Stage-Fit Leader?
- Adaptability: A stage-fit leader must be adaptable to the challenges of business. What works in the early stages won’t work in the growth or scaling stages.
- Learning Mindset: Leaders who are always in learning mode, seeking feedback and opportunities to grow, become better equipped to face the challenges of business growth.
- Strategic Foresight: Leaders capable of looking forward several moves, understanding market dynamics, and steering long-term strategy stand to be more beneficial to the company as it scales.
By hiring stage-fit leaders, you empower them to evolve with the organization and sustain growth.
Develop Internal Talent into Leadership Roles
Although external hiring is crucial, the best way to build a leadership team is by growing your own. By discovering high-potential employees early, you can develop them into leaders and help your future company leaders understand your culture and vision.
How Can You Develop Internal Talent?
- Mentorship Programs: Pair high-potential team members with senior executives who can mentor them, ensuring they gain the experience needed to become leaders.
- Leadership Training: Offer internal training and workshops to develop leaders within the organization.
- Coaching: Provide individual coaching to help emerging leaders develop leadership skills and improve decision-making.
Not only does that strengthen your leadership bench when you grow talent from within, but you also have a team that is already in tune with your company’s values and culture.
Align the Leadership Team with Vision and Values
A strong team of leaders is only as strong as how closely their thinking aligns with our company’s vision and values. Misalignment between leaders leads to infighting, confusion, and a lack of direction.
How Can You Align Your Leadership Team?
- Shared Vision: All leaders should have a shared view of the company’s long-term vision and objectives. This mutual purpose will encourage cooperation and incentivize leaders to work towards common goals.
- Cross-Functional Alignment: Promote cross-function collaboration among department leaders, encouraging compatibility and alignment toward a common vision, avoiding silos and inefficiency.
- Core Values: Identify and share the core values of your company, and ensure that all your leaders exemplify these values in how they make decisions and interact with people.
It is easier to reduce the overall friction on your leadership team if they have alignment, while direction improves performance.
Create a Feedback and Accountability Culture
Feedback and accountability are essential to a high-performing leadership team. Without them, a leader can become purposeless or unable to grow.
How Can You Foster a Feedback Culture?
- Regular Leadership Reviews: Establish a pattern of providing feedback and evaluating performance regularly. These reviews should address learning and development, leadership impact, and alignment with the company’s objectives.
- OKRs (Objectives and Key Results): Use OKRs to set specific and measurable goals for your leadership team. This keeps everyone focused on the outcomes and maintains a sense of accountability.
- Honest Retrospectives: Build an environment where it’s easy for the leaders to talk about challenges and successes. Honest retrospectives enable continuous improvement and help leaders and officials learn from their mistakes.
A culture of feedback and accountability ensures that systems and processes are constantly refined, and leaders remain focused on the company’s evolving needs.
Recognize When It’s Time to Upgrade or Reassign
Not every great leader is cut out to scale, and it’s essential to admit when it’s time to upgrade or reassign your leaders. This is not an easy thing for the leader, especially if they’ve been there from the start, but it’s required for growth.
How Can You Handle Leadership Transitions?
- Honest Conversations: Handle these transitions with compassion and honesty. Open conversations with leaders about their futures at the company and the changing demands of the business
- Ethical Reassignments: If you have a leader who isn’t well suited for their role at a certain scale, it might be better to figure out how to move them to a role where they can be successful.
- Upgrading Leadership: Sometimes you need to replace leadership with someone who has the experience they need for their stage of growth.
Knowing when it’s time to upgrade or reassign leaders is also crucial for keeping your leadership team strong enough to drive sustainable growth.
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Build a Leadership Team That Doesn’t Just Keep Up—It Leads the Way
Assembling a leadership team that scales with your company is not just about hiring the right people at the right time — it’s about pushing the limits of what is possible for your business through the contributions of the team.
Building a leadership team that can help you steer your company through every stage of growth is a matter of carefully choosing leaders who fit the stage, mapping out scalable roles, and creating a culture of growth, feedback, and alignment.
Are you prepared to begin constructing a leadership team that does not just adapt to change but directs it? Begin by evaluating where your leadership currently stands, establishing roles that are scalable, and looking to the future. By doing so now, you will secure a leadership team that will lead you to ever-greater success for years to come.
Ready to level up your leadership team? At The CEO Project, we help CEOs and entrepreneurs build teams that not only keep up with growth but lead it. Our expert advice and resources will help you evaluate your team’s strengths, fill any gaps, and find the right leaders for each stage of growth.
Don’t let your leadership team hold you back. Connect with The CEO Project now and start building a team that will push your business forward.
FAQs
How do you build an effective leadership team?
Creating an effective team of leaders involves choosing the right leaders for the organization, with a shared vision and individually complementary skills, as well as a shared commitment to work together. Defined roles, open communication, and the cultivation of a culture of trust and accountability are all integral. Ongoing professional development and training also contribute to the team’s effectiveness.
How do you get a leadership team to work together?
To achieve cohesion in a team, you must set shared goals and define roles and responsibilities. Collaboration can be developed through regular meetings, team-building exercises, and a culture of respect and trust. Dealing with conflict promptly and constructively will also promote ongoing collaboration.
What is the most successful team leadership style?
The best leadership style for a team will often vary and depend on the team, what it is trying to achieve, and its place in the organization. However, leaders who can inspire and motivate followers toward a collective goal (i.e., transformational leaders) correlate positively with performance and satisfaction. This approach promotes creativity, establishes a healthy culture, and ensures that individual goals are consistent with the company’s direction.
Why is leadership the key to growth?
Leadership is fundamental to growth because it establishes direction, provokes action , and drives organizational change. Good leaders are productive decision-makers and skilled talent developers, and provide an atmosphere of innovation and flexibility. Their ability to handle obstacles and exploit opportunities determines how well the organization can expand and prosper.
