Who Runs The Show?

Amy says, “Don’t be held back by startup table stakes.”

A few weeks ago, Leila Sarkarian, a “force-of-nature” entrepreneur and exceptionally talented jewellery designer, came to talk to me about a problem that was keeping her up at night. Why? Because Sarkarian runs a fast-growing, successful enterprise, and the stakes are suddenly changing as she jumps into year five of the company’s growth.

Before launching her own firm in 2011, Sarkarian spent five years in the executive ranks at a well-known and very traditional clothing company. The experience did not make her a fan of top-down hierarchical structures. She believed they choked creativity. So she and two other founders created a workplace culture that promoted “inclusion,” where everyone felt at home, were respected for their opinions, and participated in all management decisions.

Quickly, their company garnered attention in the press, receiving high marks for their designs and also for being a great place to work. In just four years, the company morphed from three to 14 employees. And everyone still had a seat at the management table.

Now, Sarkarian has the opportunity to significantly grow the company and bring in more investors. But that requires setting up an executive team that will focus on driving the expansion. That changes the expectation that everyone in the company will steer the ship together. Sarkarian will have to establish (dare she even say it?) a tiered leadership platform. Uh oh! Now she’s torn. And sleepless. To grow, she needs to accept VC money. But she doesn’t want to quash the culture of inclusion the founders worked so hard to create. So what’s her next move?

Here’s what I told Sarkarian:

Congratulations! You’re about to grow a business you built from the ground up! You also have a chance to be an inspiration to those around you that depend on your business judgment. Here’s a guiding principle on growth: Once a company expands beyond 10 people, it’s no longer pragmatic or strategic to invite everyone to weigh in on major decisions, even if the team is accustomed to that intense participation. How you lead through this transition will matter more now than ever.

Consider the original goal. You chose to launch a business that promotes a culture of inclusion. That’s smart and contemporary. It invites employees to join your entrepreneurial mission and attracts talent tired of old-school structures, tiered-priority, and privilege. People love to feel heard and included in the building process. They’ll invest more time. They’ll show up with passion.

But keep in mind that you hired people with specialized expertise. You did not hire a multitude of CEOs. They’ve helped the company get to its present size and complexity, but they are not founders. They don’t have the same grit and vision you have to launch and lead. You’re the CEO, the entrepreneur whose name is on the door. And in this case, on the jewellery!

I encourage you to take your rightful seat at the head of the table, without trepidation, and define the terms for inclusion as the company evolves. You’re the one who must decide who sits at the executive table. Is it founders only? Does it include a CFO?

You can still continue as a creative, inclusive, and willing-to-break-boundaries entrepreneur. It’s time to create a new decision-making framework. Outline what decisions will be made by the executive team. Establish what you want from your marketing gurus, your design group, your business or product development group. Create a “collective break” time when (and you determine how often) all voices will come together for a report-in and brainstorm session. Set up an advisory board with representation from each department. Your “AB” can feed you. And, in turn, you feed them. Rather than violating the inclusive culture your business was founded on, this new decision-making structure will strengthen it. Everyone will continue to feel valued.

But the change is huge. Manage this so it gets off the ground in a good way. Stay involved during the shift. Set up a system to publicly acknowledge the strength of each person’s ideas. Solicit opinions on how the process is developing. Reward breakthrough thinking. Test-run each new design line so no one feels left out. In a broad sense, having an executive team shouldn’t make other people feel disqualified, but instead encourage the qualified to dig into what they do best. And then during the collective break, cheer each other on!

As founder and CEO, you remain chief collaborator, channelling the talents of your staff to steer the company to new heights.

 

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