5 reasons why start-ups sabotage themselves
Guest article in Strive Magazine | Once young companies have left the start-up phase, the real work begins. In this new phase, good leadership and team building become imperative. Leonie Schulze Bölling, CEO of the CoA Academy, knows that many managers find both particularly challenging. Here, she describes the five most common mistakes that start-ups make when they enter this new phase.
The proof of concept has already been demonstrated: the hoodies have been ordered, customers and the press are celebrating the product, and the cash register is ringing—all because the investors have enthusiastically signed their funding commitments. Now, nothing stands in the way of the founders’ great vision. The direction is clear: full speed ahead. Growth. Team expansion. The efforts from the start-up phase are finally paying off.
But, not so fast. As it turns out, many companies run into major difficulties at precisely this point. And that’s because something fundamental changes: Up to this point, the factors of product quality, business model, financing and the founders’ persuasiveness were key to success. Now it’s all about scaling, team building and above all: leadership!
Little experience and lack of leadership skills often lead to high employee rotation, which costs a lot of time, money and energy. An oppressive and frustrated culture sets in because things simply don’t work the way they used to. Employee dissatisfaction and excessive demands on managers lead to poorer results and even health problems. It’s a disaster for those affected, and for the company it means it’s falling short of its potential. Essentially, it is running the risk of complete failure due to poor leadership. It is not uncommon for the founders to collapse under this pressure as a result.
In my conversations with companies, the same five points that make it particularly difficult for founders and managers in the growth phase come up again and again. These include:
1. Overstrained young managers
Often, young people with little professional experience suddenly lead teams of five to ten people. It is not uncommon for these to double in size within 12 to 18 months, meaning that previous structures and processes are no longer sufficient. Many managers feel insecure and can no longer cope with all the interpersonal problems while at the same time setting high goals. They find it challenging to deal with conflicts, to decide who fits into the team and who does not. They have difficulty giving feedback. They often lack the courage to make hard decisions like letting someone go who doesn’t fit with the team.
2. Two out of ten managers do not like to delegate
Among managers, the following limiting belief is common: “Only if I do it myself it will be done right.” As a result, they take on too much, are overburdened and are often on the verge of burnout. They want to do everything 100 percent perfectly and control the results. They lack trust in the team’ s work. I know this very well myself. For a long time, I was convinced that the employees simply didn’t deliver good enough results. At least not as well as I thought I could or as I would have liked. One of the most important things I’ve learned so far is that as a boss I can influence the team’s results, especially if I don’t do it myself. This is exactly where flexible leadership becomes a special competence.
3. Perfectionism meets insufficient fault tolerance
Six out of ten managers confirm that they miss the entrepreneurial thinking in their employees. I still catch myself thinking, “By the time I’ve explained to my employees how I want things done, I’ll have it done faster myself.” It’s a vicious cycle that drains motivation on both sides.
The concept of situational leadership (micromanaging, training, coaching, delegating) helps me a lot in such moments. First, I am more likely to allow mistakes to happen, even if I anticipated them. The learning curve that emerges between my counterpart and myself is much higher than if I had prevented the mistake. Of course, this only works if I allow leeway for mistakes with moderate consequences. Second: I change my leadership style depending on the task and situation, for example from delegating (I hand over the task completely) to coaching (I ask questions and expand my colleague’s solution space).
4. Inefficient Meetings
Eight out of ten team leads say that most meetings are inefficient, unnecessary or take too long and often end without a definite outcome. Among the things that are lacking in these meetings are clearly defining who is in charge and a goal-oriented agenda with strict timeboxing for each meeting. Which topics are discussed in which round? Daily, weekly, monthly, quarterly or annually? We call this our meeting rhythm.
Particularly in turbulent times, a fixed, steady rhythm provides more security and plannability. Especially when it comes to balancing strategic and operational topics, maintaining the rhythm helps to clearly distinguish between them. “Today we are dealing with topic X; we need a solution right now. We’ll discuss topic Y in the all-hands next month.”
5. People hire people who are like themselves
We all tend to like people who are similar to us. In the recruiting process, this can be harmful. As a result, many young start-ups have too many people on their team who are similar. The company therefore lacks the diversity and different perspectives that ensure a problem is looked at from all sides to achieve the best possible solution. Depending on the personality traits of the leadership team, critical skills and preferences can be missing from the company.
To put it simply, in addition to the visionary and energetic types, there is also a need for the implementer and coordinator types. When it comes to diversity, it is important to remember that personalities can be different, while the common values are the same! Making decisions on the basis of corporate values, especially in recruiting, is an important success factor in team building. I had my personal “aha” moment when I understood that values are the characteristics that make us strong as an existing team and differentiate us from others; they are not the qualities I think will be important in the future. It is an inventory, not a roadmap!
Especially in an intense growth phase, leadership skills are crucial to fulfilling the founders’ broader goals and visions. Many of these visions make a decisive contribution to a better future and working world. This is why they merit further and ongoing effort.
The limiting belief that we can only become successful with hard work, pressure and extra hours is dangerous. It quickly leads to self-sabotage. In my role as CEO, I have therefore redefined success for myself: I now feel more successful the less my job feels like work. I have the same goal for my team. If I can do that, we’re all relaxed, productive and achieve fantastic results together with much more ease. This is also what we help the members of our academy to achieve.