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News & Views

Are you suffering from the treadmill trap?

by Phil Gripton
Insights
|
1st April 2019
Are you suffering from the treadmill trap?, post image

Every day I meet founders who are working hard to grow towards a value realisation event – their “exit” – often set against a three-year timeframe. They typically have outline plans developed from their initial business case / investor deck, dutifully adorned with smart objectives, agile sprints, and all manner of other tactical execution tools which they hope enhances their chance of realising their objective.

What I also notice is they are all super busy getting on with it all, long days, late nights, weekends, last minute pitches, and lots of travel. Not too many serene swans, but many furiously frantic paddling ducks.

Busy is good, isn’t it?

Being busy isn’t always a good thing; keeping busy on the wrong things is clearly time wasted. It frustrates me that leaders erroneously take comfort in being busy, convincing themselves that they simply need to work faster and harder.

Scale-up leaders often give insufficient thought and consideration to the possibility that the model likely needs some course correction to stay on the optimal growth trajectory.

What’s the impact of this limiting belief?

The lack of course correction during scale-up can lead to the build-up of sub optimal practices across their business that begin costing the business time and money immediately. But they will often go unaddressed until they become serious enough to cause a problem, that then needs remedial action.

The impact on the leaders themselves can be more serious. They run themselves and the senior teams harder and faster to keep up with the scale-up, which can result in lower productivity, poorer decisions, stress, fatigue and ultimately burn out. The resulting poor health can even damage their chances of longer term success.

An example: A story about Andy

Recently I’ve been helping a client (Andy) who is a co-founder of an explosive tech scale-up. He and his fellow founders are a couple of years into their amazing journey. They’re smashing all targets and scaling at pace, resulting in exciting valuations being thrown at them regularly from interested investors and acquirers…the dream scenario. Or is it?

In reality, he isn’t living the dream at all. It’s now become a nightmare for Andy.  As the business has grown he has worked harder and harder in his attempt to outpace the scaling of the company.

The issue

Andy hasn’t run a business like this before. The rate of scaling means he is now having to do work that’s not his core skillset or even something he’s interested in. This means he no longer enjoys the everyday, with everyday becoming more and more demotivating and exhausting. Unfortunately, his default coping mechanism is to double down on work ethic to fill the gap.

The dichotomy

The thought process that served him and his peers well in the start-up phase around bootstrapping and DIY is now preventing him from committing to investment in the best operational structures, third party guidance and personal mentoring for the betterment of himself and, ultimately, the business.

What a tragedy

Andy is on the dream growth path. He craved start-up life and now he’s here he isn’t enjoying it at all. The 24/7, always on work ethic is making him feel less healthy, stressed and anxious. To make matters worse, he now has a negative paradigm smashing around inside his head telling him that he’s failing and that he’s no longer a valuable asset to the team and the super-scaling business he’s so brilliantly helped create thus far.

So, what is likely to happen?

The likely scenario here: it all gets too much and things begin to break down, support is eventually sourced but by then the support required is more invasive and costly remedial triage to recover the situation, rather than progressive support to keep the growth plan on the upward trajectory.

Could all of this have been avoided?

If more leaders could be persuaded to step off the busy treadmill earlier in their journey to look seriously at what they are doing, and consider how early course correction would get them to their destination faster… if they can come to accept that scaling a business is not something that most people can do totally on their own, then maybe they will see the potential benefit in investing in external help that can steer them to frequent incremental improvements.

After all, getting it right first time is so much better and cheaper than fixing something that’s a problem.

Recommendations for founders / leaders of scaling businesses:

  • Don’t expect yourself to be able to do everything your business needs in your scaling journey.
  • Funds spent on developing the leadership team and making the business better are as valuable (if not more so) as the ones you spend on product and service development. After all, investors always say they invest primarily in the leadership team.
  • There are people who have done exactly what you are doing before and have experience of overcoming the challenges you are facing right now. Why not get them to help you?
  • Don’t rely solely on investors (who might be on your board) for all the advice and guidance you need. NEDs are often good sources of support, but may not be sufficiently experienced in the sector or discipline to be able to give the most effective guidance and counsel.

The treadmill of running and operating a business can be all consuming for many scaling founders.

This seems to give them an artificial comfort that all is well, but it’s difficult for them to raise their field of vision and think longer term and see the value in taking advice and guidance they need to optimise their growth early on.

We constantly see founders reaching out for help when something is out of control or when they are having trouble.

If you’re on the treadmill and would like to find out more about how to take back control in your fast-growth business please contact us.

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