Why Coaching Is Important During Each Stage of Company Growth
Coaching creates exponential growth, and organizational stages in startups come fast and furious. However, each of these stages requires a different form of leadership.
By Matt Auron
As organizations grow and mature, they go through predictable stages, each of which requires a different form of leadership in order to drive success at each stage. Coaching ensures that leaders are supported and growing exponentially in order to support this rapid evolution.
We can refer to the stages of venture capital funding as a roadmap to match leadership and organizational dynamics. Each stage of organizational growth requires distinct skills and mindsets, and they are surprisingly different.
The shift from being a contributor to a leader brings in the human factor, and managing others who are doing the work becomes primary over doing the work yourself as a founder. This is accompanied by increasing pressure from the market, board and associated complex decisions that involve many other humans for the first time. The best investment a leader can make is in having a place to actively develop in an effort to meet the different needs of each stage. Coaches can support the transformations that are required.
Early stages (pre-seed to A)
At the earlier stages, from pre-seed to early A-rounds, the work is hands-on, intensity-driven and revolves around key decision-making with co-founders and other early-stage employees. Leaders are individual contributors, and the work is both creative and technical. This stage requires moving very quickly, focus, ruthless prioritization and sharp hiring practices, as each new hire can be existential. That is, based on its small size, the company can either thrive or struggle based on one person. All of these efforts are focused on establishing the core product and service.
This stage is fairly existential: The company is literally being born, and most decisions have a big impact. Keeping things focused and moving quickly is paramount; people report that this stage is fueled by energy and the passion of the founder. A coach can help a founder focus, prioritize and learn about the beginnings of their business. At this stage, coaches frequently counsel the entire team; their effect is systemic and broad as they help the team work through designing early management processes, provide feedback to each other and learn as they make critical decisions. They can also help quarterback other key resources and advisors who assist in the success of the business.
Growth stages (B to C)
The beginnings of the growth stages, sometimes from the A-round but peaking at B or C rounds, are where the true organizational foundations are laid. A leadership team forms, strategic HR is hired, and processes are built to drive the organization and enable it to scale. It’s during this time that culture comes to the forefront. In this stage, the CEO and other executives begin to focus on the organization as much as the product, and a true executive team begins to form. This requires a different, more human, skill set. Leaders have to become process builders.
These are also the stages in which leaders need intensive counsel and coaching so they can successfully make the transition from early-stage product leader to organizational leader. This requires an operating system change. It also typically requires a deep dive into where they ascribe value and the mental model of their role, which is to enable others to build and thrive versus doing it themselves. Growth-stage leaders also have to be process builders. They are the ones who build infrastructure that has not existed before, and this lays the foundation for the organization at scale. The competencies that enable this include emotional intelligence, vision, communication and narrative-building skills, a subtle understanding of cultural and social dynamics and the ability to motivate and inspire.
Coaching is key in developing these areas. A coach can help a leader upgrade their operating system and process the fundamental shifts at this stage. By offering reflective inquiry and support, the coach helps the leader understand that their value comes from letting go of parts of the business, building culture and the more symbolic aspects of their leadership. If they make it, these stages of growth can transform a leader into the mature version of leadership we know from larger companies.
Later-stage companies build on the growth stage capabilities, and human-centric skills become even more important. For many, cross-functional relationships facilitate their effectiveness. However, this can feel political or jarring, as they are used to having full vertical control and have experienced seamless collaboration with a smaller leadership team. As such, this requires having more one-on-one meetings with peers and realigning mental models around horizontal leadership: your peers are how the work gets done.
Innovation and breaking down processes can also be important, as the creep of institutionalization requires a refresh of the original fire. Leaders have to focus even more on presence; their leadership brand is what speaks when they leave the room.
Lastly, at this stage of scale, a business has a greater responsibility to all of its stakeholders, including the community and the planet. It is critical for a leader to have a point of view and aligned actions around that responsibility.
A coach at later stages helps a leader untangle cross-functional relationships and practice difficult conversations. Coaches support the leader in understanding the subtle cause and effect of leadership at scale and provide a mirror for a leader to pull apart incredibly complex decisions. Leadership at this level is highly symbolic and drives ripples of culture. A coach can help the leader understand how they are showing up and how that impacts engagement and motivation across thousands of people.
At all stages, having an open space to process the complex changes that occur and make diligent adjustments is critical. Coaches help leaders address key blind spots that can impact a company’s long-term, sustainable success. Investing in coaching at all levels of leadership provides one of the best mechanisms to scale the humans and human-centric skills as the business scales.