16 rules of engagement to rocket fuel your start-up’s growth

The path from start-up to mid-size may not run smooth, but Coffee Nation entrepreneur Martyn Dawes thinks he’s found the right mix

Starting a business usually tests the founder in ways they were not expecting. I was certainly no exception when I started Coffee Nation in late 1996.

It was not until 1999 that I had discovered the right combination of product, pricing, location and business model that set us on our way and enabled us to raise the funding we needed and land our first major roll-out contracts.

It was an exciting time but it was also a time of great change for me. Very few founders go on to make it as great CEOs, particularly if it is a high growth business. The skill-sets can be so different. It’s often this challenge that keeps so many businesses small which is a great pity. I need not have worried as I was to lead the company for the next eight years until it was sold.

Here are 16 things I learnt that I believe are essential if you are going to see your young start-up flourish into a high growth mid-market tiger:

1. Don’t be alone

The experienced, objective and dispassionate adviser / chairman / non-executive director (mentor) can make for a powerful combination with the passionate yet inexperienced entrepreneur who is not always as objective as is required. It’s someone to talk to and vent your frustrations at – safely.

2. Hire a high calibre senior leadership team

You need one of these if you are serious about growth. Too many founders think they can do it virtually by themselves or employ junior managers and expect director level results. Recruit for greatness.

3. Challenge

It is no longer all down to you and if your leadership team is motivated by long term growth in the value of the company then it’s likely they now own part of it too. You have to respect their views and listen to their advice. Expect to be challenged. If you aren’t something is wrong – you have a weak team or you are overbearing. Both are equally dangerous.

4. Learn to lead not manage

This means you have to build a great leadership team and then let them get on with it. Your role as CEO & founder is to provide the direction and uphold the vision and focus – through the ups and downs. Pick the right people and they’ll build a great company for you. Too often, a promising young business is stifled because the founder cannot make the leap from being the nexus of all decisions to leading a team. More of what got you here is not what will get you to where you want to get to. You have to let go and delegate, not over manage.

5. Trust

I trusted my fellow directors 100% that they always had the best interests of Coffee Nation at heart. We had a simple vision and were always aligned. Of course, we didn’t always agree but that is healthy.

6. Style

I was quite a force of nature when I launched Coffee Nation – I was on a mission and had to shout loud to gain entry to some of Britain’s biggest companies. I was quite a funky guy in my early thirties and loved being me. But I had to learn that this might put some people off – my style and approach had to flex with my audience as time went by. The CEO of a growth company has to display a level of sophistication often beyond the awareness of the start-up founder.

7. Pay attention to the small stuff

By this I mean remuneration policies, organisation structure, proper performance reviews and all manner of leading your people the way you would want to be led. Invest time and energy in this and make it your mission for your business to be great to be part of. I know lots of people who have left fast-growth companies because of shortcomings in these critical areas.

8. Vision and focus

As CEO you must never lose sight of the end game and the change you are bringing to the world. Make sure no one else in your company forgets it either. A great vision gets the hairs standing up on the back of people’s necks – it’s not a made up corporate mission statement. It can only come from the heart.

9. Opportunities and distractions

I was recently with a CEO who was forever acquiring other businesses – his rationale was that as opportunities they were too good to miss. However, he readily acknowledged that knowing what to do with them once he had acquired them wasn’t always so easy. How did they fit together as a whole and did he have the management breadth and capability across his business to build out from there? It’s maybe a fine line but beware distractions lurking as opportunities. Know what business you are in. High growth is usually about finding the line of least resistance and then exploiting this relentlessly.

10. Push down

Allow people to have a go and use their initiative without fear of what happens if they get it wrong. Encourage people to be big at all levels in your business. Make leadership exist throughout not just at the top. Your aim must be capability in depth.

11. Use great coaches and mentors throughout

Aim to promote from within wherever possible.

12. Be strong

Take decisions and lead your team. Don’t delay decision making or procrastinate. It’s not all easy or fun but you will feel better about yourself when you face up to the difficult situations. Others will notice and respect you as a leader. This extends to you. If and when the time comes that you believe someone else could better lead your company on the next leg of its journey take that decision too.

13. Passion

You can never let up on this. I remember a time when my personal energy had dipped – I had been flat out for several years and it seemed like progress had slowed. I felt like I had reached a plateau. I looked at all that we had achieved and where we had come from and re-grouped. I took a short break. I came back more passionate and determined than ever.

14. Finance and funding

Don’t hold your company back through fear of external funding or the finance function. We had recruited a top flight finance director so we always knew where we stood financially. Banks, private equity and asset finance firms all commented on the quality and rigour of our accounting function which gave them confidence when setting out proposals of funding for the business.

15. Values

It can be easy to compromise these when you are under excessive pressure. I have convinced myself, for example, that someone is great for the job despite some nagging doubt. Whenever I ignore the doubts – I get to live them out for real. I remember some years ago in my consulting business making a poor recruitment choice – the candidate was convenient as I was under time pressure but culturally was a big clash. He lasted three months and I had a repair job to do with our clients. Lesson learnt.

16. Be relentless

The sharper the focus the easier this is. If you have been fortunate enough to identify and create a new market category do not let go of it. Do everything you can to underpin your leadership of the space you are in. No matter how good the Coffee Nation model if our machines weren’t running 24/7 we’d fail. We couldn’t get the service level we needed from third party maintenance providers so we moved the company and built our own maintenance function. This wasn’t in our original plan but served to strengthen the core.

Finally, always be genuine with people and keep it professional – inside and outside the business.

Leading a growing company is a demanding role but growing as a leader and as a chief executive can be just as rewarding as the growth of the company itself. I wish you well.

Martyn Dawes is the author of Wake Up and Sell the Coffee: The story of Coffee Nation and how to start, build and sell a high-growth (January 2014, Harriman House)

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