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The value of seasoned leaders in startups and scale-ups

December 18, 2018 By: Brad Furtney

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According to the World Economic Forum’s Future of Jobs Report 2018, nearly 50 per cent of companies expect that automation will lead to a reduction of the full-time workforce by 2022.

While the findings indicate that 75 million current jobs will be displaced by automation, there is good news: an estimated 133 million new jobs will be created. This translates to over 200 million change events in the workforce globally — a massive amount.

In Canada, a portion of these new jobs will be created through the startup and scale-up communities. Startups are those companies built by founders who have a specific solution for their industry that will likely change and disrupt the world. These startups are small in nature with smaller revenue and typically have fewer than 10 employees. At this stage, they are not adding a significant number of new jobs into the economy.

Scale-ups, however, are where the real job impact happens. When a company is in the scale-up phase, the business expands rapidly. With increased customer demand (and therefore increased revenue generation) the company needs staff. Scale-up companies often need to increase their headcount by 50 to 100 people or more in as few as 12 months.

At some point, all founders come to the realization that they cannot do all of this hiring on their own, especially when they are expanding so quickly. This is where strong leaders are necessary to guide and manage the change — not only the influx of new employees, but the larger-scale change that’s imagined by 2022.

In order to meet the demand of increasing the employee base, leaders need to consider two key realities that will continue to be imperative:

  • the technology or solution upon which the company is built will not necessarily make the newly scaled company successful; and
  • communicating with and leading the larger company team will become even more important.

    Your team needs to expand and you need more leaders
    When you’re a founder/leader and you realize that you need senior-level talent, you have two options: [1] develop it from within or [2] recruit from the outside. Both have merit, but the talent pool is exponentially greater when recruiting from outside your company.

    Attracting and recruiting leadership talent can be daunting. Where, when, and how to attract it is the challenge.

    Core values are key
    Although it’s important to stick to your company’s core values for all hires, it’s even more critical to hire leaders who align. Not only must leaders promote these values, they must embody them and serve as role models for all staff.

    For example, Connected, a Toronto-based company that integrates product development, focuses on realizing business impact through software-powered products. Christina Gjiri, the HR team leader, believes success comes from the company’s use of 4 core values: teachers/learners, smart, reliable, kind. This guides their day-to-day decision-making and hiring practices.

    Concerned about entrepreneurial experience?
    I have found that many startups and scale-ups are hesitant to hire senior leaders that don’t have an entrepreneurial background. Here’s how I see it: ensure the leader fits your company’s values and culture and seek the most experienced person you can find. Don’t be intimidated by their years of experience. This is what your company needs right now. Youth and enthusiasm are vital, but for long-term success, you need growth-minded experience on your team. Senior-level leaders will bring years of knowledge and the “I’ve been through a few hurricanes” attitude that younger hires just don’t have.

    Always be hiring
    Lastly, consider this philosophy: always be hiring. It is hard to convince experienced leaders to join a 50-person startup, so you must constantly recruit. I would say as much as 25 per cent of your time should be networking with senior-level leaders. There are two inherent benefits:

  • every time you meet an experienced leader, you will learn something and you’ll have the opportunity to promote your company; and
  • sometimes you’ll need to hire leaders quickly, so keeping your recruiting funnel primed will support you when you most need to find good leaders
  • As you imagine the company that you want to build, and when you find yourself in the throes of needing senior-level talent quickly, consider the value of experience. Companies need great leadership at all levels, so planning your strategy and priming your recruiting goals are key. Follow your core values, focus on experience, and always set your sights on potential leaders.

    Companies need better leadership at all levels. Employees demand it. Customers deserve it.

    Brad Furtney’s expertise is in building and scaling customer-focused organizations. His most recent role as Chief Revenue Officer was building out and leading the North American sales team at Juice Mobile, specializing in results-driven mobile advertising solutions.