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How to act like a VC-backed startup (#11: Encourage leadership at all levels)

Dave Labowitz Leadership, Scale

“Encourage leadership at all levels” is the eleventh part of a twelve-part series. It’s a deep look behind the scenes of the “business playbook” that makes VC-backed companies successful and how to apply these lessons to your business.

  • If you’re looking for the introduction to the series and first article, please click here.
  • If you’re looking for other articles in the series, links are at the bottom of this article. Enjoy!

11. Encourage leadership at all levels 

VC-backed companies are known for encouraging leadership at every level of their organization. This makes sense, as they plan to scale rapidly from small to large companies and will need plenty of leaders along the way. But why does this principle also apply to a small business that may not be planning on scaling as rapidly? There are quite a few reasons.

As your business scales, you won’t know everything going on

The bigger and more complex your business gets, at some point, you, as owner, will no longer be able to keep track of everything going on. You will need to rely on your team members to take ownership and accountability. If you’re not reachable, there will be times when sudden decisions need to be made or emergencies need to be addressed. 

These are the moments when you’ll want your team members comfortable with stepping up and leading. If no one feels good about doing that, who will jump in and take charge when you’re not around? Who will delegate to the team what needs to be accomplished, and by when? If you’ve encouraged your team to take a leadership mentality, anyone, regardless of role, can step into the gap. They may not have authority, but if they have influence it will work just as well (or even better)! 

Leadership and empowerment go together

It’s your responsibility to make it safe for your team members to step up and lead when they see the need. Even better, you can actively encourage them to lead. When they do, you’ll see them gain a larger sense of empowerment in your organization. Creating a team that feels empowered is great for your culture and your bottom line. Here are a few reasons why.

  • People are more committed and engaged when they feel empowered
  • Feeling empowered creates a safe space for creativity
  • Empowered employees have higher workplace satisfaction
  • Empowered team members will be more likely to be direct and transparent with you

Encourage leadership to avoid bottlenecks

If you’re leading a relatively flat organization like a small office where everyone pretty much reports to you, it’s easy for bottlenecks to develop. You can’t be everywhere at one time, and while emergencies may be promptly elevated to your attention, less critical issues can fall between the cracks.

If you have encouraged leadership in all your team members, it’s far more likely someone will identify the failing and do something about it. They’ll also be more likely to propose, and even implement, a creative solution. When your team members start thinking as leaders, they’ll solve a lot of issues you may never even need to hear about.

Your team will grow in their careers if you encourage leadership

If you plan on scaling your organization, you’re going to need to be able to promote people. The more you encourage leadership, the more your team will be ready to move up in their careers. This is good for both them and you. From their perspective, it can turn a dull job into an exciting career. 

In turn, their improved satisfaction will result in reduced employee turnover and better work product. It’s also far better to promote from within than hire from without. It’s less risky to promote someone you know, understand, and trust than to hire a stranger from outside your organization. And it always feels good to reward someone who’s worked hard for you with a step up the company ladder.

Encouraging leadership will improve culture

Along the vein of the prior point, if your team feels empowered enough to lead, it will help set a positive culture in your organization. Leadership, in itself, is a growth-oriented and authentic activity. The more of your team members that adopt a growth and leadership mindset, the better your culture will be. This can be an exponential impact, as once some people start leading it will inspire others to do the same.

It’s rewarding to see your people grow

Finally, and speaking from experience, it’s tremendously rewarding to mentor a team member and see them blossom into a strong leader. When I look back at my executive career, some of the things I’m most proud of are the successful promotions in my teams! Even if you don’t stay at the same company forever, you’ll know that you had a significant and positive impact on people’s careers and lives. If each of them has a similar impact on their team members, think about the number of lives you can touch!

This series will continue soon with Part 12.

Other articles in the VC-backed startup series are: