Leading isn’t easy. It’s even harder when your company is growing fast. Leaders of high-growth organizations face unique challenges, such as rapidly scaling systems and processes, and the constantly changing nature of their role.
To learn more about these challenges and how to deal with them, we recently spoke with Allen Lau, CEO and co-founder of Wattpad. Wattpad is a service that allows people discover and share stories about the things they love, with stories ranging from romance to sci-fi and everything in between. Wattpad is growing quickly – 130,000 new users sign up each day, and their team is rapidly expanding. Below we share lessons from Allan on how to lead a fast-growing company.
Your business must have both a purpose and a vision. Allan spoke to us about how Wattpad’s original purpose was to give people easier access to stories, then it eventually evolved into helping storytellers find an audience. As CEO, his role is to bolster this purpose with a concrete vision so that his employees know where the destination is.
“The purpose and the vision, they intertwine; they kind of support each other. A vision without purpose is a business without a soul. Having purpose without vision, you are kind of wandering aimlessly.” This is even more important as the company grows. The purpose ensures your growing workforce is motivated to come back to work every day, and a vision helps that growing workforce move in the same direction.
The job of a CEO at a fast-growing company evolves constantly. A big realization for Allan was that he was “getting a new job every 12 months.” Initially he was an “idea person,” and had to grow into a “product person” – someone who can turn an idea into something that people can actually use. Next, he evolved into a “company builder”, which involves “hiring, retaining people, structuring the company, and creating the processes.”
Finally, he had to turn the company into a business, with fundraising, engaging with investors, and finding capital. In the words of Allan, this constant evolution is “why unfortunately a lot of founders who were very good at certain stages, may not be the most effective leader at later stages.”
Keep the ‘3 and 10’ rule in mind. The concept, borrowed from Rakuten’s CEO, is that “every time the company crosses the 3 and 10 threshold everything is broken. When we grew from a single founder to 3 people, everything was broken so we had to fix it. When we grew from 3 to 10 people, everything was broken, so we had to fix it. It was working for a while until 30 people, and then it was broken again and we had to fix it” (and so on).
How you communicate, make decisions, and delegate may be working now, but when you reach the next threshold, be prepared to revamp the process so it works for your current reality.
Having a community of peers is critical. Allan meets with a group of CEOs of fast-growing companies every two months. They “lock the doors and turn off the phones for 3 hours – it’s like Vegas; what we say in the room stays in the room.”
He notes that these CEOs have often faced the same problems he is facing. He can learn from what they’ve done and apply it to his context. This concept has gained so much traction that the original group he helped form has now expanded into about 20 similar groups of leaders that meet up regularly across Toronto and Waterloo.
Good investors can advise you on the big picture. Investors can see the high-level themes across their portfolio of companies. The technical, operational problems are best solved by you and your people because you are in the thick of it. But, investors stay out the weeds and because of that, can help you “avoid some of the landmines ahead…something very powerful is if an investor says that they have 40 companies in their portfolio, 10 at my stage, 8 facing the same problem, and this is how they solved that problem. Then I don’t have to reinvent the wheel.”
Leading a fast-growing company comes with it’s challenges. Taking a strategic perspective, embracing constant reinvention, and relying on the expertise of others are some of the ways you can make this task manageable and lead your company to success.
This article was co-authored by Leann Schneider.