Mitchell Shack‘s article and advice on scaling up was published on Forbes

As a company grows, leaders often face a point in time when turnover begins to increase, tension grows, and things feel unstable. I refer to this as the “wobble phase,” where a startup is growing into its own and transforming into a more mature operation. The “early days” are over, and it’s time to transition to the next phase.

For example, I work with a company in New York that has a larger-than-life founder with a fantastic reputation in his industry, a compelling vision, and the right personality to make things happen. In the early days, he and his co-founders worked long hours together with a small group of staff as they willed their ideas into life. Their proximity and the need to do whatever was required allowed them to align their efforts and walk in lockstep. 

As they succeeded and hired new employees, however, the complaints began. The workers either didn’t know what was expected of them and felt abandoned by busy managers, or they felt micro-managed. Strategic direction was not clear to most employees. The company began to wobble. To make things worse, the founder’s response was simply to try harder and berate his confused employees. He confided that he really didn’t understand what they wanted from him.

If you’re facing similar concerns, don’t worry. Here are some ideas that I shared with this founder, which many other clients have found helpful:

 1. Know that it’s normal. First, I remind my clients that these dynamics are a common offshoot of growth. At the beginning of any new organization, everybody chips in to accomplish whatever tasks need to be done. You’re often sitting at the same table and solving problems together. Typically, one person serves as the visionary and provides the enthusiasm to bring the idea to life, whether that’s convincing investors to fund the project or encouraging others to join the cause. 

As the business grows, however, increased complexity leads to a differentiation of roles, including financial control, business processes, and human dynamics. As you can imagine, tension begins to build as everyone discovers they’re no longer tackling the same tasks that they used to do or in the same way they used to do them. Change can be tough.

 2. Know that it’s predictable. Not only is the “wobble” normal, but it is predictable as well. Frustration and confusion start to bubble when the company grows to a few dozen employees, and either the founder is so inspiring and busy that everyone wants time on the calendar but can’t have it, or the founder can’t let go of the early days and still wants to be involved in every little decision. This perfectionism (or sense of responsibility) stifles initiative and creates bottlenecks as employees wait for the leader to approve decisions. 

Founders often see the company as their “baby,” which is understandable given the time and resources required to start it, but employees may interpret the behavior as untrusting or disrespectful. Employees can feel devalued and often disengage, either physically by leaving the company or mentally through decreased productivity.

 3. Recognize that no one is the “bad person.” Since this phase is normal and predictable in a company’s lifecycle, I encourage both employers and employees to view each other compassionately as fellow humans experiencing change together. As one of my mentors pointed out to me early in my career, “It is best to assume that everyone is doing their best at any given point in time.”  It is easy to look for a scapegoat to blame. Nevertheless, it is more productive to reflect on the growth that led to the “wobble” and determine the best moves to achieve a productive trajectory. 

Oftentimes, I see that someone in the organization — sometimes a manager but typically not the original founder — will step forward and say that “something” is wrong, even if they’re not sure exactly what it is or what to do about it. At this point, people will either question why everyone became so unhappy and attempt to fix it, or they’ll play the blame game and begin criticizing each other. This is a pivotal moment to take a step back and create a new path.

 4. Determine your strengths and structures. With the acknowledgement that the startup has hit the turning point from “launch” phase to “growth” phase, leaders should now learn to play to their strengths and trust their colleagues to tackle everything else that needs to be done. This is where policies and structures come into play, which encourage flexibility and engagement yet also provide boundaries to help focus employees’ efforts and create a productive work climate. 

At this point, although visionary founders often worry about becoming bureaucratic and “bogged down” by process, I remind them that it’s important to clarify expectations and differentiate roles. This empowers employees to make decisions and complete their tasks with autonomy and confidence. 

Similarly, leaders can focus on their own strengths of innovation, creation and relationship-building, which work together to fuel the ongoing growth of the enterprise.

 5. Don’t forget to listen. Organizations experience a more difficult “wobble” phase when leaders are afraid to hear from their people. Although the messages may not be pleasant, it’s important for leaders to open their ears, try to understand what’s happening, and hear those tough messages without becoming defensive.

Once concerns are expressed, leaders may want to engage neutral outside strategists to evaluate concerns objectively. Leaders often rely on these experts to guide implementation of processes and systems as well as actions that will boost both creativity and productivity, accelerating the organization from the growth phase to a more mature operational phase.

In the end, every company that survives its childhood will face some type of “wobble” as it scales and adds new employees with new roles. To avoid turnover, dissatisfaction, and a decreased morale, effective leaders take a step back, acknowledge the transition that’s happening, and take steps to address underlying needs. 

If your organization is beginning to wobble, celebrate the fact that your company is growing and move forward with a new plan that propels it into a successful future.