One of the unique aspects of leading as a founder is how quickly we have to develop our own leadership skills, to match the pace of a growing and ever-changing startup team. Yet knowing when to make changes and how to approach the development can be tricky. So here, we suggest an audit and introspection process for taking on the change and provide hints for navigating the discomfort of change too.
There are times in the startup-to-scaleup journey that demand a tangible leadership shift from us as founders. That shift can be deeply unsettling and demanding – yet most founders appreciate that making the change can make the difference between growth and stagnation, or (sadly) between staying at the helm of the company you started or being squeezed out by the board.
We’ve explored before a framework for viewing the different phases of leading as a founder, and how this demands different skills and philosophies from us as leaders:
- Founder phase (or rather, scrappy founder phase), where we’re taking the lead on everything.
- Managing Director phase – where we’re the conductors, who know exactly what everyone is working on, and guide them to a common goal
- CEO phase – where we’re custodians of our business’s North Star and strategy, and leading through others.
The constant need to change during these different phases really came through in our founder research: It was named as one of the top 5 factors that make founderhood unique compared with more conventional leadership roles, which are much more predictable and stable by comparison. And, nearly a quarter of founders find it difficult to adapt their leadership to meet the needs of their business as it grows.
When we spoke to Avin Rabheru on the FounderFuel Show, he reflected on this need to constantly adapt as being one of the hardest things for founders:
“What we actually need to do [as founders] is look in the mirror, and no one really wants to do that. If people aren’t doing what you want them to do, and you’re the leader – then you’ve got to look in the mirror, and that’s not particularly comfortable.”
This introspection is hard (especially when running at the usual startup pace) but it’s also vital to evolve through the different stages of founderhood, and often results in a remould of our leadership approach, as well as the acquisition of new skills to manage our teams.
So, based on our conversations with hundreds of founders going through similar transitions, we’ve explored how you can identify when a change is needed, how to approach it, and how to navigate the discomfort of the process.
The audit: Spotting when your leadership needs to change
In startups, the need for leadership change rarely announces itself in a timely or predictable way. No bell tolls after a predetermined number of years, or once we reach a specific number of employees.
Learning from the experiences of other founders helps us recognize that the trigger for leadership change can be either proactive or reactive.
The proactive trigger might be a new strategy, having an injection of funding, or an influx (or deduction) of new team members. In these situations, there is a tangible and visible milestone that signals that the future business needs something different from you than you were demonstrating in the prior phase.
The reactive trigger is more common: You notice something not working – be it growth stalling, teams fragmenting, or your workload mounting – and you recognise the need to change.
4 Common reactive triggers to look out for are:
1. You’ve become the bottleneck: If you’ve started to feel like everyone is waiting on you for a decision, or your inbox/Slack is filled with chasers to approve, this could be a sign you’ve become the bottleneck.
Gone are those glorious days when you and a small team could be involved in every decision. This sign demands us to review and streamline decision-making responsibilities and asks for a shift in behaviour towards delegation and empowering others.
2. You’re firefighting, not strategising: If you’re ending up dealing with the day-to-day and the admin, rather than focusing on future planning, vision, or innovation, this could be a sign you’re firefighting, not strategising.
Firefighting mode keeps you permanently on the hamster wheel, unable to see the bigger picture of where step-change growth might lie. This sign demands we proactively step off and start redesigning our time for the big rocks.
3. You’re burning out: If you’re lacking focus, finding setbacks harder to deal with than before, or finding yourself more emotionally drained, this could be a sign your resources are depleted.
Our founder resilience research with nearly 400 founders around the world shows how common it is for the constant demands that come with running a startup to take their toll on our mental and physical health. But we don’t have to accept the status quo. Reflecting on how we’re really doing, and understanding how this is undermining our leadership is the first step to getting off the hamster wheel.
4. You have an experienced but underutilised team: If you have a team champing at the bit to get stuck in, or new members start and then leave quickly, this could be a sign you have underutilised expertise in your team and your behaviours are blocking their potential. This sign invites a review of your North Star Mission clarity, or some feedback to understand if they don’t feel fully empowered or trusted.
This audit – based on the common experiences of other founders – is designed to help spot opportunities for improvement. Try to avoid any notion of blame in your audit – instead frame it as data. Data that is sending a message from the system of your startup and team, that you can act on. Then you can proactively plan adaptations to better serve your business. So, let’s look at a useful thinking process for this.
The introspection: Getting clear on what you want to change
The ultimate question for tackling a new phase is “what does the business need from my leadership going forward?”
It’s less about “what sort of leader do I want to be?” and more about understanding the skills and leadership approach needed for the next opportunity or challenge.
Gail Goodman, founder and CEO of Constant Contact, summed it up brilliantly when asked about how she leads her scaling business:
“You have to face yourself. You have to be unbelievably ruthless about what’s working and what’s not working. As CEO, you will have to change hundreds of times to face the different challenges in the different stages your business will go through.”
To do this, use your audit to identify what the dominant challenge is and what this demands of your leadership. Examples might be:
- Speed – requiring more decisive prioritisation and focus
- Scale – requiring more delegation or updated systems
- Complexity – requiring more clarity or alignment
- Resilience – requiring more separation and emotional awareness
Once you’re clear on what you want to focus on, you can start to hold up that dreaded mirror and ask yourself the questions that will help you plan the change ahead:
- Where do I add the most value?
- Where do I spend most of my time, and what do I need to let go of?
- What am I doing because it’s comfortable or rewarding?
- What am I avoiding or not doing because it’s difficult or new?
- What do I need to change to rise to this new phase, opportunity or challenge?
This process of Audit plus Introspection provides a starting point for reviewing and then planning changes that will help you adapt with the changing needs of your startup as a leader. Sadly, though, the process of change still feels uncomfortable. So let’s dig into that a bit more, to increase the chances of success…
Why does change feel so uncomfortable?
Entrepreneurs are supposed to thrive in change, right? Well, not necessarily. Nearly a quarter of founders struggle to adapt their leadership style to meet the evolving needs of their growing business (Balderton 2024), and our 2024 resilience research highlighted that “the skills and adaptability needed to build from nothing, into something, and beyond are unique compared to other leadership roles.”
It is possible to be motivated by the unpredictability of doing new things (something most of us can relate to as founders), while simultaneously being unsettled by it. This paradox is less of a blocker once we understand the neurobiological response.
It comes down to a battle between different parts of the brain: The amygdala – one of the oldest parts of the brain – is designed to spot danger. The threat of change and uncertainty qualifies as danger in the eyes of the amygdala – no matter how well the more modern and rational part of our brain, the prefrontal cortex, makes a case for the need to change. Furthermore, the psychological toll of constantly adapting is exhausting for the brain, even if you can get so far on dopamine kicks from framing change as new and exciting.
So what is going on for you when we get triggered by change? Perhaps you identity with one of these scenarios:
- The “not knowing” – One of our founders perfectly articulated this: “Entrepreneurship is a lesson in continuous personal incompetence.” In short, we are all “winging it” and learning to be comfortable is of course part of the founderhood job. On resilient days, most of us love this unknown, but there are times when winging it can leave us feeling incompetent and unconfident, and that wakes up our amygdala.
- Unlearning familiar habits – As humans we’re hard-wired to find comfort and safety in familiarity – yes, even those of us who love novelty and challenge. And when it comes to changing our leadership style, we’re not only learning new things, we’re simultaneously “unlearning” habits. Not only that, habits are designed by the brain to conserve energy – so when we’re trying to change habits, it takes greater mental and physical resources too.
- Letting go of an identity – When we’ve worked hard to establish a style of leadership that works for our startup, it can feel threatening to change it. It can trigger all sorts of threat-responses around identity… “Who am I?”… “Am I valuable now?”… “Should I be in this role?” Both the introspection and the change process can trigger feelings akin to grief – we’re losing something that feels intrinsically linked to who we are.
Managing the discomfort of change
How do you find yourself reacting when you’re forced to change? Do you find yourself in a place of acceptance quite quickly, or do you languish in a sea of self-doubt or frustration for a while first? Understanding your reactions can help you move forward quicker. Perhaps one of these rings true, when you last had to go through a major change…
- Denial – “This is just a phase, I don’t need to change anything.”
- Frustration – “Why does this have to happen now?”
- Bargaining – “Maybe I can keep doing both roles?”
- Self-doubt – “I don’t think I’m cut out for this.”
- Sadness – “I miss how this used to feel.”
- Experimentation – “Maybe I’ll try a few different ways of leading.”
- Acceptance – “This is the job now.”
No reaction is wrong – it’s just the natural process of change. Accepting this will help you reach a place of experimentation and acceptance more quickly, and get you back to operating at your best. This is where resilience habits and cultivating a resilient mindset really come into their own.
A final thought on navigating change with your team
Once we’ve reached that place of acceptance, our teams also need to consent to being led differently by us too.
One thing we forget as founders is how quickly we naturally cope with change compared to others (in general). It’s common for us to hear a founder in our FounderCircles getting frustrated with team members because they’ve not adapted quickly enough to a new direction.
We’ve talked before about the importance of bringing people with you through clear communication, and a shift in leadership definitely requires careful thought given to the tone, content, and phasing of its announcement.
Another consideration here is how we help our teams transition into their new responsibilities as we step away from tasks or decision-making. Planning a phased approach and involving everyone in its design will always result in others being aligned and empowered by the change.
A phased approach with your team will also support you in making the change, as you’re not expecting yourself to go “cold turkey”. Be patient with yourself, behaviour change is demanding, so setting expectations realistically (two steps forward, one step back!) will help.
Is there change afoot for you?
So what is the next step on your own leadership journey? Are you observing signs in your business that suggest a change is needed, or perhaps you’ve made some strategic choices that demand a different approach to leading going forwards? Whatever the catalyst is for change, ask yourself the following 5 questions to guide yourself through the process:
- What is the dominant challenge that we’re facing?
- What does that challenge require from me as its leader?
- What does that mean I need to change about my current leadership skills and approach?
- How comfortable do I feel about this change?
- How can I perform at my best to quickly reach a state of acceptance?
- And what is the right transition that will benefit the whole team?
Need help navigating leadership change in your startup?
If you can sense there’s a change on the horizon for your startup, or you’re in the messy middle of shifting your leadership identity and letting go of old ways of working, then drawing from the experiences of others can be invaluable. When you join one of our FounderCircles you’ll immediately feel the benefit of peer-to-peer coaching, shared experiences, and a support network. Applications are open now for our latest FounderCircles cohort.
Sources
How investors can unlock founders’ potential, Balderton 2024
