My Proficorn Way (Part 69)

Leadership Transition

For a proficorn to thrive, the leadership team is very critical. That people matter is known. What is not commonly understood is that a different set of people may be required as the business grows. Every few years, the team needs to be upgraded because the challenges faced by the business change. The people who got the venture to the current level may not always be the ones to take it forward.

Initially, it is the entrepreneur who drives things. As the business grows, it becomes necessary to strengthen the leadership team with new hires. Delegation to grow starts to become important. With time, a core trusted team develops around the leader. The leader’s most important role at this stage is to ensure that each of the core team also grows with the company. For this, the second and third levels of leaders need to be developed.

Some people are natural at re-inventing themselves and managing newer and growing responsibilities. A few others find it difficult and therefore may require mentoring and coaching. In certain situations, they may also require a new leader above them who can help scale the business faster. This is where the challenge comes for the entrepreneur – the once trusted lieutenant needs to be told that in the interests of the business, a new leader is needed and what was once a direct reporting relationship will need to change. This can either make or break the organisation. If not handled right, part of the team that built the organisation may start to disintegrate with exits.

I went through this once when I hired a CEO for Netcore. All those reporting to me now had to report to the CEO. Suddenly, there was a ‘middle-man’ in their world. New power equations came into play. Luckily, everyone stayed on and there was a smooth transition. That helped set the foundation for Netcore’s growth.

One of Netcore’s board of advisors once told me two thumb rules: the leadership team needs to be strengthened every time the size of the business doubles (which for growing companies is once every three years or so), and that only about half the leaders show the learnability to make it to the next level. Managing this transition is perhaps the most important responsibility for the entrepreneur/CEO – because eventually business success comes not just from the right products and strategy but also from having the right people in the right place at all times.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.