Most growth companies are starved for experienced leadership. As they expand, continued growth builds up pressure on their existing leadership. This gets quite stressful! The rare executive manages to build an effective organization solely by investing in their existing team, but most supplement their organization with some external hires to maintain a balance of folks who’ve seen it before and folks who’re actively learning their role.
If you’re an executive challenged by your company’s growth, it’s a particularly sweet moment to hire an experienced external leader. Once you’ve hired someone experienced, often more experienced than you, it’s easy to shift your attention towards your next biggest fire. This can work out if you’ve hired a self-aware leader whose experience extends across growth and startup companies, but more often I’ve seen the hire-and-forget formula go poorly.
Especially for folks who are very effective in larger companies, there are implicit leadership lessons they’ve learned in a large company environment that can get in their way. Within all those implicit lessons, there is one I’ve encountered frequently enough–and seen it do enough damage–that I explicitly warn folks about it: within a large company, it’s more effective to capture existing capacity than to create new capacity, but the opposite is true in startup and growth companies.
Several versions of that lesson learned from succeeding in a large company:
- If you need more headcount, then convince leadership to require every team to send a volunteer to work on your project
- If you’re missing a key leader, oblige a leader on a peer team to move to yours
- Hiring is slow and restrictive, bypass that by recruiting internally instead
While my lived experience suggests that competing for existing capacity is pretty ineffective–to say nothing of the atmosphere it creates among colleagues–it clearly appears to work sufficiently well to get the folk using it promoted.
Startups and growth companies are different. There is very little present capacity relative to the required capacity a year out. If you’re focused on capturing capacity that exists internally today, then your company is going to fail in a year. Sure, your project might be doing fine when the company fails, but whereas large companies anticipate a meaningful fraction of projects will fail, growth and startup companies depend on almost all projects succeeding.
After encountering the misalignment this mindset creates a number of times, my fundamental piece of advice for folks working in startup and growth companies is: create capacity rather than capture it.
If you dig into cases where large company leaders have integrated poorly into a growth or startup company, you’ll usually find a violation of this rule at the core. Infrequently the motivation is a machiavellian prioritization of their own projects over their peers, but much more frequently it’s simply because the large company leader has forgotten how to create new capacity. In that case, it’s either a failure of your interview process that focused too heavily on operating existing systems, or a failure on your guiding the new leader to success. Large company leaders absolutely can transition to smaller companies successfully, but they need your help to do it.
(This failure model is quite similar to new leaders who panic their way into a Grand Migration instead of learning the existing technical architecture.)