In the growth phase, the entrepreneur must move from ‘doing’ to ‘inspiring’.
The business is making money, and it is soundly anchored by a great idea with a long-term outlook. The entrepreneurial leader of this business wants to do more than just serve the small domestic market; he or she has a desire to not just be the best in New Zealand – but also conquer the international market.
As with the start-up, the passion and drive are there in the growth stage, but there comes a point where the necessary expertise is not.
At this stage in the lifecycle of the entrepreneur, he or she becomes aware that there’s a need for people who are better at various supplementary functions (the accounts, marketing, strategy and so forth) to take the business to the next level.
Learning to manage these people and grow the business using their strengths and passions to complement the leadership direction is key to developing past a ‘manager’ and into a ‘leader’ — someone who inspires.
The right people
Time and again, finding the right people was mentioned throughout our research as key to growth.
The need arises fairly early, when a business starts to get too big for a sole owner or manager to be able to continue doing every task. Many of our subjects expressed regret that they had waited so long to hand over the reins to people who were specialists in their fields — be they accountancy, human resources, marketing, IT, or anything else. They require specialist knowledge as the business acquires scale.
Entrepreneurs are often the type of people that like to maintain control and so the idea of letting someone else in to drive parts of the business can be a challenge. But no-one that we spoke with regretted finding people better than themselves at various things and giving these people a genuine independence and autonomy in the business, because it inevitably led to a better result. Those that had brought in additional expertise talked about hiring for where they wanted to be, not where they were.
This level of growth and expansion requires not just specialists to join the business but external people to cast their eye over the business and steer it in the right direction (or keep its strategic anchor in place). This phase may see a board of directors established, advisors employed, or mentors sought.
Sharing values and vision is very important between an enterprise and a board or group of advisors, and so this seems to be where the entrepreneur must use his or her gut feeling and instinct to first establish a relationship.
There is another element to the relationship, a sort of ‘X factor’. In business as in life, partnerships often rely on chemistry, and even a match on paper may be missing that X factor in person, or when the relationship encounters strain.
There must also, obviously, be two-way trust, respect and honesty for external advisors to work; a two-way process of listening is vital.
Mentorship is different again – an unpaid, long-standing relationship in general. Both mentorships and advisory relationships need to be constructed carefully to extract maximum benefit, and both partnerships should agree up front a model and structure that will work for both parties to ensure that each can see the benefit and the value from the relationship, while being able to measure progress.
Finally, collaboration is a natural extension of finding the right people for a business – and building a community of people within which ideas and support can freely flow. Innovation can be successfully sparked this way.
Download the full KPMG Enterprise Report to find out more.