By Menno van Dijk, Laurie Kemp, Hayat Chedid, Noëlle Haitsma, and Floris Kroon
Governance can make or break a scale-up. We all have our own war stories and examples of founders/CEO’s being kicked out of their company, board meetings going sour, and politics steering us away from what should be our focus: realizing our joint vision.
Because having a value-adding board is far from obvious, we prototyped a masterclass program for scale-up board members: ScaleUpBoard. We ran the pilot during the first half of 2018, with two groups of 70 experienced board members, business coaches and VC investors.
Over the course of 5 days, we explored the various elements of scale-up board membership, shared best practices between participants, invited experts and learned from cases and real life situations. Here, we share some of our key findings.
A scale-up is not a start-up
The common assumption that after achieving product-market fit the rest is history is nonsense. As ventures scale, the challenges and many demands (both external and internal) a CEO/MT encounters only increase in size and complexity. As board member you need to support the founders in their transition to become executives, and the team in their transition to a full organization with well-oiled business functions (sales, service, production, development), processes and culture.
Coaching seems easy, but proves difficult in practice
Many board members have a tendency to offer direction and advice. Even with the best intentions, this undermines the responsibility, confidence and leadership effectiveness of the founder and his/her leading team. Coaching – i.e., asking the type of questions that help the leadership team gather their own thoughts and make their decisions is far more effective, but difficult to master for the typical board member. As common management wisdom has it: tell someone what to do once, and s/he might do it. Try it twice, and you will kill any future creativity and independence of thought.
It’s a balancing act
As our participating board members became more proficient in coaching, they also realized the multitudes of roles board membership requires, and the difficulty in balancing the roles of coach (at the one extreme) and investor (at the other extreme). In practice, everyone involved in a scale-up wears multiple hats, and there is no clear division of roles.
Withhold judgment and trust the process
Board members of scale-ups are often (former) entrepreneurs who tend to be quick on their feet and react immediately and intuitively. Avoiding this instinct, reflecting and following a more thoughtful and disciplined discovery and decision-making process invariably leads to better solutions and gives the MT much needed structure and control. So try to avoid giving into your primary reactions and adhere to process instead.
Keep your eyes on the prize
Scale-ups need to keep innovating, to stay ahead of competition which is quick to copy their initial lead. As a board member, you build the confidence and conviction in the MT to not only focus on sales and production targets for your first-generation product (even if the VC’s put a lot of emphasis on this) but to also keep developing new products and business opportunities, to rapidly expand internationally and to be opportunistic. It can be great fun to explore these opportunities together with the MT as long as you avoid imposing your vision on them. No entrepreneur pursues someone else’s dream.
Excellence is about creating leverage
Scale-up CEOs try to solve every issue at hand themselves. They might drag you into this, e.g. by asking you to sell to a big account, help de-bottleneck production or resolve an organizational issue. A good board member helps the CEO lead instead of firefight, so to articulate the bar for operational excellence, to hire top talent with the right mindset and values, and install continuous improvement processes, instead of helping out on execution (even more firefighting).
Let go of your own biases and frames of mind
Your success is based on your specific situation and does not automatically translate into the situation your scale-up is now facing. History does not repeat itself, especially not when scaling an innovative scale-up. You can only avoid your biases through continuous probing and open-minded listening. Once you start to better understand the personalities of the MT, the dynamics of the industry, the business model, the qualities and vulnerabilities in the organization, your biases start to disappear. And chances are that even when you think you are listening without judgment, you probably aren’t.
You ARE the mirror
Interviewing customers as well as employees is your obligation. While this may not be welcomed by to the CEO and s/he will want to control the process and outcome, doing employee and customer discovery your own is critically important. It is the only way to provide candid feedback and a mirror on how the CEO/MT influence and impact others.
Maintaining constructive board dynamics is your fiduciary responsibility
Having discord between board members is the last thing a scale-up MT needs. Boards should build a strong foundation of trust among themselves, a strong sense of togetherness in supporting the scale-up and clear alignment on mission and vision of the business and qualities of the MT. So, actively build trust instead of assuming it is there already.
And finally: It is not about you.
Yes, you are an accomplished professional with many years of executive, investment or entrepreneurial experience. That is what got you a seat at the table. But now that you are there – it is not about you, and it never will be. Scale-up board membership is about supporting your CEO and his/her MT on their journey. One ScaleUpBoard participant shared that his biggest learning was that he is not yet ready to be a board member, because his self-orientation was still too strong. He realized that, at this point in his life and career, he preferred to still be in the driving seat. He has since taken an executive position at a fast-growing Dutch company.
Scale-up board membership is exhilarating but also much more difficult than you might think. It requires deep self-reflection and ongoing self-development to be able to help others. Mastery requires a learning mindset, humility, and a good sense of humor.
Are you an effective board member? Do you want to develop yourself as a board member, with a highly curated group of fellow board-members? Join the ScaleUpBoard program and learn from an experienced network of faculty. Please reach out to firstname.lastname@example.org if you want to learn more, or click to apply here.
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