Why letting go of control can make your company shine

To support growth, leaders must shift their mindset from control to influence

First published on
Jul 06, 2020

There’s no shortage of analysis on the journey that businesses take as they scale from start-up to success. But how about the personal journey that CEOs go on? How do the Jeff Bezoses or Mark Zuckerbergs become the people we recognise, for better or worse, in the media today?

It’s easy enough in hindsight to identify fatally corrupt or incompetent CEOs, such as Enron’s Ken Lay. But a more interesting consideration is what leads to the fall of the likes of WeWork’s Adam Neumann, American Apparel’s Dov Charney or Uber’s Travis Kalanick, all brilliant businessmen with visionary ideas. And more importantly, what steps can leaders take to avoid going the same way? 

The subject of ‘culture’ is one that comes up again and again in those situations. The accusations levelled at Charney — whose very business model was based on improving equality and paying a fair wage in the American economy — were around ‘bro culture’, as was the case with Kalanick, while Neumann was said to have heavily blurred the lines between personal and business interests. All ‘star’ CEOs with high profiles that went beyond the business world, each put his company at risk through toxic company cultures. 

Of course, the preponderance of bro culture is less surprising when you realise how hard it still is for women even to get on the first rung of the start-up ladder. Even though, according to new research from business bank Tide, there is little difference between the sexes in the time it takes to launch a first business after graduation, after start-up it’s a different story. Sarah Wood of the Women In Tech network says, “The journey to success as a female founder or CEO is a different and more challenging experience. With factors such as unconscious bias men are four times more likely to succeed when pitching for funding — but there are some really encouraging role models out there proving that women are seeing it as a hurdle to jump over rather than a completely closed door.” 

One business founder who is currently finding his way through the management labyrinth is Martin Mahler, co-founder of data visualisation company Vizlib, which since its launch in 2016 has expanded from four people to 70, and is on a fast path to growth. 

With a plan to have hired around 100 people by the end of the year, Vizlib is on the ‘Blitzscaling’ route — which, crucially, is not just about growing numbers, but also strategically scaling the business. That’s a stage that requires very finely judged leadership and, says Mahler, a personal journey from wielding total control to accepting delegation. 

“It’s intense,” he says. “If every six months you find you’re still the CEO, consider that as a promotion.” 

That’s an unusually clear-sighted statement from a young CEO, but perhaps this new generation of business leaders is more willing to acknowledge their flaws than the old school. Hiroki Takeuchi, the young CEO of GoCardless, is similarly frank in his assessment of the leadership journey.

“If, like me, you were very young and inexperienced when starting, you’re almost always going to be the least experienced person in their job at the company,” says Takeuchi. “I had never managed anyone when I started, let alone led a team of hundreds. So you need to be very willing to learn from those around you, and open to hiring people who will change the way you think.”

As Mahler puts it, the personal ‘rollercoaster’ of growth comes down to adaptability: the speed with which your responsibilities change as a leader of a high-growth company. 

“At the very beginning I had to be the best project manager, the best developer, I had to be able to organise the business,” he says. “Then all of a sudden I needed to be the person who convinces someone to leave their job to join this little, small garage start-up. Now this is going well until you realise, ‘I have to start delegating, I cannot be the one managing everything’.”

That, of course, is where many leaders struggle. Accepting that other people can’t do the job in that same way — that, inevitably, things are going to go wrong — is a principle that is easy to talk about, but extremely hard to embrace in practice. This can act as a brake on growth for many start-ups, and those that wish to get past it may have to work hard not only on their businesses but on their own characters. 

As a company grows, the role of the leader inevitably becomes more distant from the teams they employ, and one of the greatest challenges is how to empower them without on the one hand shrugging off all responsibility or, on the other, micromanaging them and neglecting the bigger strategy piece that should be occupying a CEO’s time. 

It is, in fact, a shift from exerting control to exerting influence. Which is why culture has to start with the leader — and why when it goes wrong, as at Uber for example, it’s often down to that leader’s influence. 

“The things you need to do to get your first 10 customers differ greatly from what it takes to get your 1,000th, your 10,000th or your millionth customer,” says Takeuchi. 

“The same goes for leading a team of 10 versus a company with hundreds of employees. The traits of successful leadership change vastly as the business scales, so you need to be ready to adapt and learn.” 

For Mahler, this has been one of the hardest changes to accept: how to encourage independence in his teams without simply abdicating responsibility for the company’s output. Because if your behaviour says to people that you are available to them for everything they need, you are creating reliance and dependency. 

“Not every manager is equally coachable,” says Mahler. “So now I’m spending most of my time mentoring my existing management team, rather than looking at what kind of work they’re producing.” 

This can be a painful process — to go from being the ‘inspirational motivator’ to someone giving critical feedback, and to be direct without being discouraging. Get it wrong and you can end up with either low morale or poor results. Again, character is a big factor: if you can convey personal approval while relating your criticisms directly to business matters, you will probably achieve a good balance, and this is Mahler’s approach. 

“That enthusiasm, that vision and telling everybody, ‘Guys, you’re going to be successful if the company is successful and the other way around.’ You have to be present to be able to do that, you have to be in the office, you have to speak to people in the pub, for example.”

In other words, it comes down to culture — but a culture that starts with the leadership. 

“Culture is the biggest lever we have to influence the way in which we behave, both as individuals and as a company,” says Takeuchi. “And, it’s much easier to do great work when you’re in an environment where you feel trusted and are happy. Our culture has evolved a lot as the team has grown, and it’s enabled us to welcome people with very different backgrounds to be part of what we’ve built.”

As Mahler puts it, “Culture is what happens when there is no leader present, and you have to be a role model for that culture.”

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