Initiating with a brilliant concept, a passionate team, and a tight-knit group of committed supporters, you all seemed united in purpose. As your venture evolved from concept to actuality, you expanded your team selectively, ensuring that new additions seamlessly integrated into the burgeoning startup environment.
With the growth of your enterprise, you welcomed additional talent, shifting the organization from a collective “we’ll handle whatever comes up” approach to the onset of structured roles. Perhaps the CEO no longer knows every employee. Instead of a few founders, a full-fledged C-suite and an emerging tier of management are now in place. An organizational chart is in development, though it’s somewhat disordered. Some staff members struggle to adapt, while the newcomers are unsure of their reporting lines.
Success is imminent, yet challenges abound. How can leadership maintain the excitement and positive elements of startup culture as the organization matures? What abilities are necessary, and how can you embed the organization’s values and principles into new hires? How can the freshly established HR team select candidates who are capable of not just performing the job but also thriving and disseminating the cultural ethos?
Creating a flourishing business that brings joy to its employees requires more than just business acumen. Key determinants of a company’s success often hinge on aspects of emotional intelligence: Leaders must engage in introspection while staying attuned to their surroundings as they guide their businesses through transition.
“In general, leaders must possess social awareness, understand others, and actively engage with their concerns. It’s easy to become fixated on the enterprise itself and lose sight of the original connection,” explains Melvin L. Smith, a professor in the organizational behavior department and executive education director at the Case Weatherhead School of Management.
The initial step to achieving this goal, according to executive coach and C-suite recruitment expert Caroline Stokes, is to recognize the transition. Leadership needs the emotional intelligence to reflect on how newer and veteran employees are merging to prevent the culture from declining.
“As organizations evolve from startup phases to more established entities, there’s often a nostalgic discussion about the loss of that startup spirit. People often lament over drinks,” states Stokes. “At times, they haven’t acknowledged the change that’s occurred and realize they must adapt.”
Once the change has been recognized, what are the next steps? Let’s assess this through the four categories of emotional intelligence as defined by Daniel Goleman, who literally authored the seminal work on EI: self-awareness, social awareness, relationship management, and self-management.
#1 Self-Awareness
Introspection will facilitate an understanding of your company’s culture. Exceptional leaders are cognizant of their own strengths and weaknesses. They can analyze their motives and feelings as they navigate the growth stage of their business.
However, even the most skilled entrepreneurs may struggle to adapt as they transition from a startup mentality to a strategic role, where day-to-day operations are no longer their responsibility. To sustain a workplace where employees are eager to contribute, founders who ascend to the C-suite might benefit from external support, such as an executive coach or peer group that provides reflective feedback and growth suggestions.
Benjamin Kittle, co-CEO and founder of the expanding debt-relief company Century Services, collaborates with an executive coach to enhance his leadership abilities. The newfound capability for self-reflection significantly impacted Kittle. “I’ve been able to contemplate my actions. It allows me to manage myself better as I recognize my behavioral tendencies.”
Another strategy for CEOs is to ponder the question, How do I wish to be remembered? Tasha Eurich, a behavioral psychologist and author of Insight, a work focused on self-awareness, suggests this can aid leaders in fostering a positive culture around that vision.
Achieving self-awareness equips leaders to be more purposeful in shaping culture. While not everyone may view you as the best boss ever, those leaders utilizing their emotional intelligence for self-monitoring are in a better position to help their organizations transition with their culture not merely intact but thriving.
#2 Social Awareness
Social awareness entails empathy, or the capacity to grasp the viewpoints of others. While some individuals may excel as startup founders, they may falter during growth. Why is that? One explanation is that as payroll expands, maintaining personal relationships with every employee becomes difficult, causing leaders to overlook what is happening at ground level.
Cultural integrity deteriorates when leaders fail to acknowledge that their behavior needs to adapt as the organization evolves. The luxury of maintaining an open-door policy for all employees vanishes as time constraints become more pressing.
However, social awareness mandates that leadership establishes avenues for two-way communication and remains attentive to various forms of sharing information. Eurich advocates for a group of “loving critics” to provide honest feedback. “If you surround yourself with individuals who support you yet aren’t afraid to offer uncomfortable truths, you’ll succeed in building the organization you envision.”
#3 Relationship Management
Effective leaders inspire their teams. They motivate individuals to embrace the mission and take pride in their contributions. This is relatively straightforward when it involves a small circle of friends or family members. Yet, as the organization expands, leaders must navigate relationships with individuals they may not personally know.
Without deliberate efforts to foster interdepartmental relationships through purposeful communication, employees may feel undervalued or isolated, leading to a deterioration of morale and culture.
As founders gradually step back from daily operations, they must empower their teams to make decisions and promote open communication to evade “CEO disease”—a condition where employees feel they cannot express their honesty, resulting in the C-suite holding a distorted perception of the company and its culture.
To counteract this, leaders should convey that they appreciate diverse opinions and new perspectives.
“It’s fundamentally about respect. Everyone needs to feel secure and psychologically comfortable,” Stokes emphasizes. “Everyone should feel at ease initiating conversations like, ‘Can we discuss this?’”
To cultivate a culture of transparency, Kittle demonstrates accountability by owning up to his mistakes and sharing how he plans to address them. This necessitates ongoing communication.
Establishing systematic and regular communication channels is imperative. This can manifest in various ways, such as lunches with management, town hall meetings, or consistent employee surveys. (An Explorance study on the reasons employees leave revealed that 78% would appreciate a survey regarding their work environment.) Regardless of the approach, it’s crucial for employees to feel heard, necessitating acknowledgment and action in response to feedback.
#4 Self-Management
Microsoft CEO Steve Ballmer may have been known for his explosive temper, and Apple founder Steve Jobs was infamous for his rants, but their behavior should not be the model as a company expands. Quick outbursts foster a culture of intimidation. Entrepreneurs aiming for growth should focus on regulating their emotional responses and other behaviors that shape company culture.
If a startup environment supports open dialogue, leaders must reflect on the messages they convey before reacting. Moreover, they need to effectively manage their time while enhancing planning, prioritization, and goal-setting skills to operate efficiently and effectively. The organization’s culture depends on all members understanding what to expect, how to act, and the optimal way to function—employees look to leadership for guidance.
“Much of emotional intelligence revolves around consistently demonstrating specific behaviors,” Smith notes. “The primary issue is often a lack of consistency—not in learning how to act, but in executing it more reliably.” If employees are uncertain about what to expect or how leadership will respond in various situations, the company culture is likely to degrade.
Visionary leaders whose teams remain engaged set strategic objectives and know when to close the door to focus or manage their responses.
Sustaining Culture During Remote Work
Employees may not have access to foosball tables while working remotely, but that doesn’t preclude the possibility of fostering camaraderie.
Virtual trivia nights, online happy hours, dedicated Slack channels, or Century’s virtual movie nights featuring light-hearted films with a chat option for commentary all promote a sense of togetherness and allow individual personalities to shine through. This, in turn, paves the way for improved collaboration.
Can organizational culture fracture or become multifaceted and more challenging to oversee when the office is primarily vacant (or completely nonexistent)? Yes. Thus, it’s vital to remain attuned to culture. Emotional intelligence fosters an understanding of the varied requirements across individuals and departments.
Selecting Suitable Candidates
The transition from a startup to a larger firm necessitates that leaders learn to delegate and relinquish control. The era of a few people handling every task is over. Burdening oneself with too many responsibilities contributes to stress and leads employees to feel that their skills and ideas are undervalued. Leaders must focus on strategic initiatives and delegate tactical tasks to others.
“I used to be prone to proposing an idea and then placing it on my own to-do list,” he states.
“Now our need for structured organization has evolved. I must brainstorm ideas and then pass them to someone else to implement.”
To guarantee the selection of appropriate individuals, leaders are encouraged to trust their instincts and utilize their emotional intelligence, as Smith asserts, and Stokes concurs.
“Typically, CEOs with prior experiences can intuitively gauge what a candidate will bring to the table and can identify their blind spots,” explains Stokes. “It is essential for headhunters, HR personnel, and the CEO to comprehend the company’s culture.” This understanding enables them to seek talent that will enhance both the work environment and the organization’s objectives.
Organizations are dynamic, evolving communities. The traits that define an excellent entrepreneur do not always align with those of a successful mid-sized company CEO. Cultural transformations occur, yet leaders who possess emotional intelligence and are open to evolving with their businesses can navigate this transition without forfeiting the innovative spirit that fueled their startups.
